3/26/2012 3:36 PM ET|
Bad money habits you give your kids
Your kids pick up their attitudes about credit and spending from watching you. Make sure you're setting your kids on the right path by avoiding these 3 things.
You might think your credit and financial habits are nobody's business but your own. But like it or not, your kids -- especially teenagers and young adults -- watch your financial behaviors and learn a lot from you.
For better or worse, our offspring often mimic our financial traits and money-management patterns in ways both large and small.
So how can you be sure you're setting a positive financial example when it comes to credit?
Despite your best intentions, you may be sending subtle, negative messages about the proper use of credit cards and debt.
Here are three bad credit habits you don't want to pass along to your children.
1. Maxing out credit cards
Remember that time you and the kids were out shopping and your credit card got declined? Not only did the customers behind you see what happened, so did your kids.
You might have indignantly stammered something about having paid the bill already, but the truth is that your card was likely rejected because it was maxed out. When you overspend, you send your kids the wrong message: namely, that a credit card gives you carte blanche to get what you want -- even when you can't truly afford it.
So instead of making minimum payments on that MasterCard, or instead of running up your credit to the limit, ease up on the credit cards. Then explain to your children that you're giving the credit cards a break in order to pay down your balances, use cash more often and get a tighter grip on your finances.
"Having to physically part with money is harder than just charging it," says Jesse Ryan, managing director at Accounting Principals. "Paying cash helps you stay on a budget, because you will think twice before buying what could be an impulse purchase."
It may seem embarrassing to have such a candid conversation with a 16-year-old, and practically impossible to follow through in both word and deed. But in the long run you're actually doing yourself -- and your kid -- a favor by being more responsible and showing restraint.
Let's hope that's a skill -- let's call it the art of delayed gratification -- that your child will remember, develop and emulate when he or she is an adult.
2. Accepting store credit cards
Another shopping-related credit blunder that can send the wrong message is constantly saying yes to offers of retail-store credit cards.
That application for a new card will generate an inquiry on your credit report, which can temporarily lower your FICO score. Equally troublesome is that if your kids are in the mall with you while you go on these credit-hunting binges, they'll pick up the not-too-subtle message that department-store credit cards are the quick and easy way to get what you want when you lack cash.
Again, this mindset won't encourage them to save money or to learn to say no. Instead, it promotes excessive consumption.
"It's not necessary to have more credit cards than you need, because not only will it present temptation, but it may also lower your credit rating," says Gabe Albarian, the author of "Financial Swagger."
So here's a better strategy: Say "Thanks, but no thanks" to those department-store credit card offers. Then turn around and explain to your kids that applying for new credit can lower your credit scores, and that if you can't pay the bill right away you can quickly get into trouble because retail cards generally charge interest rates that are higher than you might find on Discover, MasterCard and Visa.
3. Ignoring your bills
When the mail comes to your house, do you simply toss aside credit card statements? Or perhaps you flat out refuse to open your bills or make comments like "Ugh. Nothing but bills."
Be careful what you say in front of your kids, because they may pick up your habit of ignoring or disregarding bills. That's a definite no-no.
Such sentiments suggest that repaying bills isn't a priority. Your actions also send the message that you don't believe it's important to keep your good credit intact by promptly opening bills and paying them on time.
So rather than lamenting about that next credit card statement, go ahead and make a minor production out of opening the bill while your kids are watching. Then, instead of groaning about the balance, say something like "I think I'll pay this balance off in full this month" or "I'm going to pay two times the required payment on this bill." Next, turn to your son or daughter and add: "I want to practice good credit habits. And when you get a credit card or a loan, I hope you will, too."
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Yup right on target, I am a tight wad and so are my children. They learned it from their parents, and I from mine who lived through the first depression. They not only survived but thrived.
If I want something and cannot pay cash for it, I go without, simple plan. By being that way I was able to assist in their college education, and help them buying their first home. I don't smoke, drink, or gamble with my money.
If you prioritize what you spend your money for, and live within your means, you can do most anything you want within reason. But when I look around I see an awful lot of folks with not priorities or will power. Blame yourselves folks you are to blame, absolutely no one else.
Well its true that if your parents had financial problems that you are likely to follow in their footsteps. But to chalk this phenomenon up to learned behavior is a huge oversimplification of the problem. It’s actually more of a psychological problem than an educational one. For example if you grew up in a poor household and your parents had a lot of anxiety about money then those same anxieties are likely to get passed on to you. And if this happens you will always sabotage yourself financially and will always end up behind on your bills even if you make a fairly good salary. You basically become your parents in a way. Of course even kids from wealthy financially responsible parents can get into trouble with credit cards. In their case it’s a completely different mechanism however. With them it’s more about a sense of entitlement and being used to instantly having whatever they want whenever they want it. When I was a teenager I worked at a convenience store in a small college town and I remember every year, a few weeks prior to the end of the school year, all these college girls would come in and write bad checks for such "essential" items as Haagen Das ice cream and clove cigarettes. They knew the checks would not clear of course but since they would be skipping town soon they figured they could get away with it - and if not, their parents could always bail them out, seeing as how they were all from upper middle class families with plenty of money. I’m sure they didn’t even think of it as a crime, it was simply a necessary action in order to get the things they felt they were entitled to. This is a very dangerous mentality to have. To think you deserve the finer things in life and yet to not be willing to work for them. Anyway the point is these problem are not "learned behavior" but rather are the results of deep-seated psychological issues ingrained into us by the environment in which we were raised. Of course it doesn’t help that society itself is becoming more and more about instant gratification – the buy now pay later (whether you can afford it or not) mentality. And sadly it doesn’t look like things are going to change anytime soon.
My parents grew up during the depression with dirt poor parents, yet Mother and Dad were very good at handling their money. My father who was a WWII vet; Phd college professor/administrator; minister; (along with my homemaker mother) was able to retire early with a max salary of about $50,000/year. Yet my 6 siblings and I inherited about 100K each plus a 100 acre farm when my parents passed (age 84). How did they do it? They scrimped and saved. Yet we grew up 2 miles from the beach in Florida in a fine neighborhood of doctors and lawyers, had a large yard, pool, boat, camper, horses. We took family vacations in our car and stayed with relatives. We ate well but almost always at home and we all attended college. Mom and Dad even made loans to us (with interest) from time to time. They didn't use credit cards, and their only debt was a mortgage that was paid off early. Growing up, we kids lived in money bliss & ignorance.
While my parents did well themselves, and we benefitted in many ways, some of us kids got into trouble with money in our adult years. Problem? I don't remember any conversations, consequesces or lessons about money management growing up. Learn from this and teach/share/explain/show bills/open savings accounts/use piggybanks/make loans (and repossessions) and set as many real life examples of financial experiences as possible for your children.......and let them make mistakes, and learn consequensces, while they are young and the cost is small.
Let's not forget that children can also learn from their parent's mistakes...My mother has always been fiscally irresponsible; in debt up to her eyeballs, bought everything that ever came to the door, and is now in bankruptcy. Seeing this helped shape me into the opposite. I can talk myself out of buying an extra quart of milk if we don't need it.
But I'm not saying she was a bad parent, and neither is this article. Though I'm not quite sure who decided to take the leap from "potentially damaging financial decisions you can avoid", to specifically associating this as a "critical financial parenting recitation". I suppose I wonder what was the point? To chastize, teach, or fault, and to what end?
Where is it written that the "good" parent uses credit for consumption and pays happily, while the "bad" parent uses credit and ignors the billing statement or complains about the payment responsibility? And what moron thought up the FICO score BS in the first place? If my children, and their children, and their children's children learn the value of cash and savings, and the total BS of their credit score, then was I a good parent ...or bad.
here were the days when each state had its local breweries and some pretty fine beers, But as they tried to compete with the big guys Like Bud they ruined there beer and then most went out of business.
I can remember a beer in Pennsylvania called Stegmyier,, not sure how it was spelled, but it was called GOLD AND COLD FROM THE POCONO'S, and had won a Brussels world fare gold medal award.
yes even at that no one but locals ever heard of or drank the now popular Yuengling,,,,
But Steg changed brew masters and then it all went down hill and now they are history,,,I am still trying to figure out how Yuengling stayed afloat as I lived 20 miles from the brewery and drove through the town and never drank the stuff, But did try a bottle the other day just to see what all the hype is about
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