Go over the events and happenings in your recent life that have impacted your score. Tell them what you wish you would have done differently when you were in your teens or early 20s.<\/p>\n
Related:<\/em><\/strong> Teens & Finance: 5 Classes Your High Schooler Should Take to Start Out on the Right Financial Foot<\/a><\/em><\/p>\n As a reminder to you or intro for kids, here is a list of things that affect your credit score:<\/p>\n If old enough, they can start building their credit score now by applying for a credit card online. And kids under 18 can be added as authorized users on parents’ accounts to begin building credit sooner<\/a>.<\/p>\n It\u2019s a great idea to allow your child to have a credit card before sending them off into the real world. But first, they need to know how credit cards work.<\/p>\n Print out the last three months of your credit card statements. Sit down with your child and go over them line by line. For each, explain the ENTIRE statement to them, not just the transactions.<\/p>\n Talk through:<\/p>\n Now, talk to them about how credit cards are a tool that can be used to build a solid credit score. Also, discuss the damage they can do.<\/p>\n Explain (or show) your child what happens if you don\u2019t<\/em><\/strong> pay the balance in full each month. Don\u2019t be embarrassed or ashamed if your statements aren\u2019t perfect. It can be a useful starting point for a discussion about your family\u2019s finances and can provide even more valuable lessons for your child.<\/p>\n After learning the ins and outs of a credit card and how to use and manage one correctly, you should assist them in applying for one online. As mentioned, if they are under 18, you can add them to your existing credit card account.<\/p>\n But if they are 18 or over, they can apply for their own. Here is a list of WalletHub\u2019s best credit cards for teens<\/a>.<\/p>\n When they do receive that credit card, long-term responsible use is necessary to build and maintain good credit. That includes paying their bills on time, carrying a low balance, and paying the balance in full every month. Give them limits, give them accountability, but also give them some freedom.<\/p>\n Let them make those early mistakes while you still see, guide, and mentor them every day.<\/p>\n Another credit card option is a credit card just for students. Here is a list of the best student credit cards for 2020 by Nerdwallet<\/a>.<\/p>\n Our culture shies away from money talk, whether it be with friends or family. This avoidance is unfortunate. Few will share their personal financial details, such as how much they make, what their investments are and why, or how they’re planning to fund their retirement.<\/p>\n Even when sharing with a financial advisor, many feel timid.<\/p>\n But when talking about money, we should be open and honest with those whom we trust. Just think of all the wisdom we would gain if we talked about money with our friends as much as we did about “The Bachelor” or sports.<\/p>\n Here lies the opportunity to teach your kids how to talk about money. These conversations can happen nightly at the dinner table, or while driving in the car, walking the dog, making breakfast, or browsing the grocery store.<\/p>\n In addition to checking in with them about how their best friend is doing, you can also talk about your index fund performance, your rental property<\/a>, your employer\u2019s 401(k) match, or how you pay your bills (see the next lesson).<\/p>\n Give them hypothetical money situations, and ask them to analyze the pros and cons of the options. Here’s a fun example: \u201cPretend you just won $100,000 in the lottery. What would you do with the money?\u201d<\/p>\n Related:<\/em><\/strong> 7 Ways to Screw Up Your Kid\u2019s Financial Future (& How to Avoid It)<\/a><\/em><\/p>\n There is a golden opportunity in most households every month to teach our children about personal finance, which most of us ignore. The monthly ritual of paying the family bills is probably not looked at as prime quality time with the kids, but it is a magnificent learning opportunity.<\/p>\n Open your books and show them the income and expenses of the small business known as your family. Have them click the mouse as you complete your electronic bill pays or banking transfers. Explain to them why money goes here and not there.<\/p>\n Ask them if they notice any issues or problems, and if so, what adjustments they would make. Make them an active partner.<\/p>\n To further guide your child in his or her quest for financial self-improvement, give them homework for your \u201cFamily Personal Finance\u201d class. For each assignment, have them verbally report back what they found most interesting.<\/p>\n These assignments might include:<\/p>\n We\u2019ve saved the best for last! Teach your child to save 10 percent (at least) of what they receive or earn. Whether the money comes from a gift or a paycheck, the very first thing they should do is save a portion. Always<\/em>.<\/p>\n Remind them of this every time they receive money until they do it automatically.<\/p>\n Does your child have a checking account yet? If not, use this time to open one up. You can do this together online very easily.<\/p>\n I recommend the Capital One Teen Checking Account<\/a>.<\/p>\n Does your child have a savings account to hold money they have received from birthdays, gifts, etc.? If not, open one of these, too. You may also consider helping them open a separate savings account to actively use to store excess money from their checking account in order to earn more interest.<\/p>\n I recommend Ally<\/a> for an online savings account.<\/p>\n Talk them through the options for the money in their account(s):<\/p>\n Learning intelligent money habits is so important for your child. Be sure to convey the purpose of savings, and discuss how those savings can be invested to set him or her up for financial success.<\/p>\n\n
Lesson 2: How to use a credit card<\/h3>\n
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Lesson 3: How to talk about money<\/h3>\n
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<\/p>\nLesson 4: How to pay bills<\/h3>\n
Lesson 5: How to learn<\/h3>\n
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Lesson 6: How to save and invest<\/h3>\n
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