Now that our children have returned to school from break, I ca not help but wonder if we are preparing them for the financial responsibilities they will be facing? I mean have you sat down with them and explained how credit cards work, school loans and budgeting? Are they at least enrolled in a personal finance class? We cannot continue to use silence when it comes to money while our children walk into our crazy financial world.
I had a very interesting conversation with my godson. He will be graduating from high school soon. He assured me that he was ready to take on the responsibility of purchasing a car. He felt this way because he has been working par-time at a fast food restaurant. When I asked him how much money he had saved his answer was simply, none.
We talked about the importance of saving money and some responsible things he could do with is earning. I went on to explain to him that having a job was a good step towards saving to buy a car outright. However, he was still lacking in responsibility for assuming that everyone else would gift him enough money to buy a car.
When it comes to loans that a person should contribute some of their own money. Giving someone the total amount they need removes them from having a true interest and feeling of ownership. Many homeowners walked away from their homes or that very reason. They had no money to lose, so they walked away from the home.
So our conversation ended with an agreement that he would cover insurance and gas with his income and save at least 10% for college expenses and I would send him cash towards the purchase of his vehicle as a graduation gift.
I guess buying a car is much more common then when I graduated from high school. However, I would rather teach graduates the importance of being responsible with their money then popular with their peers. What are we teaching them by buying the mandatory iphones, laptops, games systems, digital cameras, DVD players, and ipods? I think the message is pretty clear, “consume more, save less and use debt to consume everything you want. This has got to stop!
Pretty soon my godson will be off to college where he will be bombarded with credit card applications, cell phone companies and many other vendors enticing him to get into debt. Hopefully he will learn how to be responsible with money before he earns his college degree because my other gift was a few sessions of our Kids And Money Program known as K.A.M.P.
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