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College students and anyone who has just turned 18 are targets for credit card companies looking for new customers, but if your 18-year-old is either still living at home or is financially dependent on you and away at college, then the decision on whether or not they should get a credit card fairly lies more with the parents. A recent post at About’s Financial Planning site had a good discussion about the pros and cons of giving a teenager a credit card, and the end result: usually, the best answer is yes, sign them up.

But of course, there must be rules to go with their new found credit freedom, if parents are the ones who have to foot the bill. For example, it should be used to pay for something that the parents have already agreed to pay for (gas for the car, for example) or only in case of emergency.

One of the biggest benefits of getting your 18-year-old a credit card is that they can begin to develop some credit history. Length of credit is an important factor in calculating credit scores so if they are able to use a credit card without creating debt from a young age, that stands them in good stead. But the key thing is that they should treat the card as a bill that must be paid off in full at the end of every month.

photo credit: Material Boy

As a parent you are probably well aware that your child needs spending money from time to time. The question is: how much of an allowance does your child receive? This is up to you as a parent, and should be based on your beliefs, your child’s wants and needs, and of course, how much money you have. After all, if you don’t have enough money to give your child a large (or small) allowance you should stray away from this for the time being.

As noted above, it is your job to decide how much of an allowance to give your child as well as when they will receive this money. Some parents base this allotment on their child’s behavior or how many chores they do around the house. This is a great idea because it helps to teach your child that they need to do work in order to get paid.

But what if I don’t have a lot of money to give as an allowance? As you know, this is something you have to work into your budget. You should never feel obligated to give money that you don’t have. Instead, explain your situation to your child so they have a better understanding of what is going on.

How much of an allowance does your child receive? This can be a tough situation to deal with!

If you have children it is important that you give them the knowledge they need to succeed. And while “book smarts” are very important, you must remember to teach your children about money as well. This is not a subject that is always touched on in school so it is your job to do so at home. With the right money management skills your children will have the knowledge they need to get a good start with their financial life when the time comes.

It is not always easy to teach children about money management, but it is more than possible. As soon as your children begin to receive an allowance is when you should begin to talk to them about money management. This includes everything from how to save money, how to spend, and how to set a budget. Of course, you do not have to get to in-depth; you don’t want to confuse them.

The earlier you teach your children about money management the better. As long as they have an understanding of what money is and how the system works you should be able to start talking with them about money management and other financial topics.

The impact of the economic crisis on our kids is an important issue; but as well as explaining the situation carefully to children, it’s also essential to realize that they will have probably figured out a lot of what’s going on before you get around to telling them. Don’t forget that when you were a child, you understood a lot more of what was happening around you than your parents thought - well, these days kids are just as smart. (more…)

photo credit: Megapixel Eyes

Sometimes we forget that kids might hear all this horrifying news about the economic crisis - and listen to what the adults around them are saying too - but not really get what’s going on. Rather than get them feeling worried or scared, Yahoo suggests, parents should remember to chat to their kids about the economic crisis and make sure they understand the gist of things without feeling too anxious. (more…)

photo credit: derek olson

America’s children have always followed the trends — when my parents were young, they wanted record players in their room and when I was a little girl, a phone and CD player in my room were all I needed. Today, kids want cell phones, and not the cheap kind either, because cell phones are the tween and teen status symbol of the 21st century.

Of course, cell phone service is expensive, and it’s parents who foot the bill for this techie obsession. And in some cases, costs are out of control. Take Ellen, for example: in just two months, her teen daughter racked up $1,100 in cell phone charges, including text messaging, music and Internet access.

For some parents, these options are surprising and financially threatening. Most cell phone companies encourage line owners to open all options, hoping that their customers will inadvertently spend much more than they intended. If your kid’s got a phone, that business tactic is clearly working in the company’s favor. And even when you think you’re covered — lots of minutes and unlimited text messaging — you’re not. There are too many extras (cell phone horoscopes, anyone?) that cost dollars, adding up to unexpected phone bills.

In the end, parents need to draw the line at how cool they can afford their kids to be. Remember, you shouldn’t have to take a second job just to pay for your children’s right to text, so stand up for yourself, make rules, and require your kids to stick to them.

One of the best things you can do for your kids is teach them good money habits, and a great list was recently posted over at the Simple Marriage Project. Here’s a summary of their best pieces of advice:

• Give children some control of money, for example by having them do some weekly chores in exchange for pocket money
• Teach them to save up to buy something that they want
• Help them to invest their money as they get older, and teach them about the various kinds of investments
• When children have a savings goal, demonstrate to them how cutting back on some expenditure will help them reach their goal faster
• Get them used to the physical action of paying bills (even if they aren’t paying with their own money)
• Explain how various kinds of debt work and as they get older, let them use a credit card with a small limit and encourage them to pay it off in full each month (and if they don’t, let them learn the consequences)
• Discuss materialism and impulse buying with your children
• Above all: practice what you preach. Children will learn the most from your example, so learn as much as you can about managing your own money well and set a good example.

photo credit: orangeacid

The NY Times has an interesting take on one way to help make your marriage last: marry someone who’s financially compatible to you. Or try and become financially compatible by following these tips:

• Talk openly about a savings philosophy and agree (or make a compromise) on it. Then get serious about your family approach to money - some recommend holding a weekly meeting to check on the finance situation
• Support your partner’s career so that both partners can be earning when the stage in life is appropriate
• Rotate responsibility for different aspects of your finances - don’t have one person responsible for everything, all the time
• Agree on how much money you can spend for enjoyment and luxuries and still be financially sustainable
• If things get rough, use a mediator (who might be a financial planner) to agree on a new money philosophy
• Make sure each partner still has some money that is slightly “independent” - that they can spend for themselves, how they want
• “Invest in your marriage” by going on dates and planning holidays - this investment in your relationship might cost a little money, but it’s worth it in the long run. Apart from the obvious distress of a relationship break-up, divorce is also an expensive business and it can quite often be avoided with a little more care earlier on.

photo credit: nattu

A recent post at Girls Just Wanna Have Funds looked at the interesting question of when is the right time to decide to start a family.

There are obviously advantages and disadvantages to both sides of the coin - having children young (in your early 20s, say) or later (in your 30s). From the financial side of things, these are the main pros and cons that could tip your decision making:

• If you have children young, they will probably be out of college before you retire, so you won’t need to worry about college costs coming at the same time as you stop working (or having to retire later because of college costs)
• On the other hand, if you hve children young, you’re likely to be financially less stable and then might find it harder to save for the future when you have child-related costs at the same time.
• If you have children later, you will have a chance to build up financial security first and probably own a good portion of your home.
• But again, on the other hand, if you have children later, you might be accustomed to living a more high-spending lifestyle, having done it for a long time, and have trouble adjusting to more financial pressures and possibly a much lower income.

A survey released in April shows that only 48.3 percent of high school seniors could answer basic questions about personal finance. They can’t balance a checkbook or put together a personal budget.

Does this sound like your kids? If so, here are some places on the web that can help.

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