Many of today’s youth are receiving a disservice from us as parents, teachers, leaders and role models.

I’m talking about the rampant spending and lack of financial self-discipline that presents our youth with an image that money grows on trees.  We have become obsessed with “STUFF”!

If you are a parent, when is the last time you sat down with your kids and had a frank, teaching discussion about money?  Not the “don’t buy that” discussion but really teaching them about money and the consequences of spending more than you make?

For the older kids, how about the significant differences in use and ramifications of a credit card vs. a debit card?  To them, there is no difference.  They see us at the ATM, they see us at the grocery store, they see us at the gas station, they see us at the mall. . . . .you get the idea.  But what do they really see?

credit card

 

They see us reach into our wallets and pull out a piece of plastic with the words “Visa” or “MasterCard”.  And they see us buy stuff with them.  We walk in, grab what we want, walk to the counter and out comes the plastic.  This they understand.

Here’s what they DON’T see.  They don’t see mom or dad sitting down with the bill at the end of the month and writing the check to make the payment.

My family uses our credit card to pay for almost everything.  But the key difference is my wife.  She has this amazingly detailed and intricate budgeting system to pay for everything.  Way too confusing for me but she is spectacular at it.  We have funds deducted straight from our paychecks and routed to a separate bank account.  Within this account she allocates X number of dollars to her various budgets.  Car maintenance, clothing, food, entertainment, etc.  And at the end of the month when the bill comes, she spends a lot of time and effort reconciling our spending with our budgets.  She doesn’t just whip out the checkbook and write the check.  She knows where our money goes and why.

I doubt everyone is that detailed.  I also doubt everyone pays off their credit card every month.  This is another lesson we need to be teaching our kids.  The effects of interest both on a savings account and on a credit card/loan.

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I am a merit badge counselor and teach the Personal Management merit badge for the Boy Scouts.  I give all the boys I teach a small bit of homework in addition to the badge requirements.  I ask them to all go home, launch Google and do a search for Amortization Schedule.  Most links will include a spreadsheet calculator.  I then ask them to “buy” a home for $100,000 with a 6% mortgage over 30 years.  Simple plug and play.  I then ask them to print the results and bring them to a counseling session for discussion.  Imagine the shock and amazement of just how much a homeowner actually SPENDS when they buy a $100,000 house.  (By the way, I know my interest rate is way above current rates but it does illustrate the point.)

My point is this.  Kids today (most of them) have no concept of budgeting and how much the use of money actually costs.  They sure aren’t taught in school.  Even at the college level, I don’t really know of a class that teaches this most basic of information.  How many kids today would even know how to write a check if they had to?

They need to know before we ship them off to college the potential repercussions of not being money smart.

It takes attention to detail.  The reason I’m writing on this topic?  Personal experience.  My son, away at college, used the wrong card to pay for some online purchases.  He used his debit card, rang up a bunch of purchases and overdrew the account to the tune of about $90 in fees.  Think that sat well at home?  Yeah, not so much.  In addition, he gets charged the ubiquitous $3 ATM fee every time he gets cash.  When they aren’t taught about money, they don’t realize how much they lose.

In short, we are failing our youth.  I have failed my son.  What about you?  What have your money experiences been like with your kids?  Please share.