Balancing a Checkbook

Author: Sean

Financial information is not a popular topic of conversation in general education classrooms, however, the importance and need is there.

I have been approached by a few customers that happen to be teachers who look at me as a young professional and would like my influence on the classroom to highlight the importance of personal financial management, and the doors it can open and close later in life. With these questions I began thinking about what limited financial opportunity and training I was provided at a young age, and a few simple tips that can help parents to ensure their children have a grasp on how to manage their finances.

Everyone knows that balancing a checkbook is a classic example of forming an understanding of credits and debits and how to come to terms with your spending habits, but this is only the beginning. Reviewing a bank statement is also beneficial as they can understand how credits and debits work in real-time. The most difficulty I see in people my age is getting their foot in the door for credit, and an easy way to do so is to put your child as a signer on your credit card, as my mother did for me. Before I was 18, I was establishing credit without even utilizing/owning a tangible credit card. This way, once they have graduated from college or even prior to doing so, they are a savvy credit-user with a tenured trade line, however, this only puts their foot in the door and pre-qualifies them for credit; they also need to understand self-obedience.

You can designate limits on cards to prevent overspending, which is advisable to save yourself from becoming the angel investor in your child’s new wardrobe. Start small and see how they manage the freedom; you may be surprised by your child’s ability to understand what they hold in their palm, but this is dictated by your introduction to them and how you emphasize the importance of credit and what it can do from a positive and negative aspect.

Discussing with them the advantages to good credit is a way to open their eyes to the world of credit and how much creditworthiness matters in this day in age. Things such as homeownership, car ownership, etc. are big items to them, especially a car. This will allow you to drive the point home and establish a basis for why this is a great opportunity for them, and how their actions can have a lasting/immediate impact on their credit.

Timing is different for all kids based on maturity levels (I’m surprised I’m not still awaiting a credit card), but the one thing in the mix that is a constant is the importance of credit. If all else fails, you can always freeze the child’s credit card in the freezer; this will force them to deliberate the importance of the purchase while the glass thaws.

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