Teenagers can be a handful. Give them a credit card and they might just run amok and swipe the cards every chance they get. This is why it is important to teach teenagers to be financially responsible from a younger age. My friend Laura learned that the hard way. Laura is a single mother with two teenage daughters. Laura worked hard to keep food on the table and as she was not always able to go shopping with her daughters due to the demands of her workplace, she decided to give each of her daughters a credit card so they could buy the things they needed even when she was not around to buy things for them. The consequences were disastrous. Her daughters used their credit cards like it’s nobody’s business until the debts become more than what Laura could handle. She enlisted the help of Freedom Debt Relief and that was when she realized that she needed to educate her daughters and boost their financial IQ.

Laura decided that it was time her two teenagers learnt that credit cards are not free money. As a mother it was her responsibility to monitor her daughters’ spending habits to ensure that they would not have to enroll for a debt settlement program ever again. So Laura set a rule that every time her daughters swipe a card they are to jot it down in their own notebooks and the information must include the amount they spent, the item they spent the amount on, and the purpose of the items purchased. Each spent amount is to be added up at the end of the month. Every month she would compare their notebooks against their credit card bills. Laura also made sure that her daughters see the bills so that they could understand that they are actually spending money even though no cash has been traded. After all, individual purchases may not seem like much but when added together, the figure actually caused her daughters eyes to widen like they could not believe they actually spent that much.

Financial responsibility was also to be nurtured. Laura started making her daughters earn every single purchase they made. For example, if her daughters each bought a new dress she would ask them to pay for the purchases with their own money when the bills came. Of course she did not include the interest at first because her aim was to let her daughters understand that money does not grow on trees and if they want to buy something they have to work for it. It started with simple things such as getting paid for mowing the lawn and saving the money to make up for the purchases they made with their credit cards. If they refused, Laura would simply take a portion of their weekly allowances to help pay for the items they themselves bought. Naturally that did not bode well with their daughters so they learned to work for money so that they could still keep their allowances.

Once her daughters started paying for the items they bought, Laura began playing the role of a credit score keeper. Just as credit card purchases would affect Laura’s own credit history, she applied the same concept and practice on to her daughters. Basically, each daughter had to maintain a good credit score in order to continue using their respective credit cards. Laura explained to her daughters that banks and credit card companies use the same principles so they should also learn to familiarize themselves with such practice. Generally if her daughters were late in making payments Laura would deduct their “credit scores” herself and this affected their ability to use their credit cards in the future. If the scores got to a low point, credit card privileges would be temporarily revoked until her daughters managed to bring their scores up again.

The measures taken by Laura may seem as harsh to some. However, teenagers do need to understand that credit cards are privileges that they have to be responsible for. Laura’s daughters are now grown up and are better informed on the effects and ramifications of credit card debts. So I believe it wouldn’t hurt to start teaching kids to be financially-savvy so that they would learn to appreciate hard-earned money even more.

Author Bio: freedom debt relief

Category: Finances
Keywords: freedom debt relief