Raising Money-Smart Kids
Help Teens Create Good Credit
Set Up Accounts For Kids
Teach Students About Cards

Raising Money-Smart Kids
Good job training isn't enough. To be successful adults, your children also need lessons in money. The sooner you begin the coursework, the better — for both you and them.

Here are age-related guidelines:

• 3 to 5 — Start talking about money. Give children occasional change so they can pay for small items in cash. Discuss the concept of limits and choice. Familiarize them with coin values. Set an example. Kids learn from your values and money-handling skills.
• 6 to 7 — Introduce an allowance. Start with 50 cents or $1 given regularly. Don't link to chores or punishment. Family chores should be expected, not tied to allowance. Let children make purchases (within your limits). If they make mistakes, don't fix them. Talk about family needs versus wants.
• 8 to 10 — Establish a savings plan. Increase allowance and responsibility each year. Have kids put away part of their allowances — or money earned from odd jobs. Encourage savings by matching what they save. Help them open credit union accounts. Discuss saving for something special (both short- and long-term).
• 11 to 13 — Teach budgeting. Include children in family money discussions and bill paying. To teach where the money goes, show them certain bills. Talk about long-term goals like college and how to pay for it.
• 14 to 17 — Push from the nest. Switch to monthly allowances; this teaches long-term budgeting. Get checking accounts in their name; perhaps credit cards, too, with them paying their own bills. Encourage summer jobs. Discuss financial institutions and services. Introduce basic investing concepts.
• 18 to 22 — Set up school finances. While still in high school, discuss how college will be paid for. Include prior savings, employment, financial aid and loans. Talk about what the money can and cannot be used for — then stick to it. Be sure students sign up for credit and ATM cards, with easy account access. Make sure they directly deposit paychecks and student aid checks into checking. If you're making financial contributions, automate that process as well. At least semi-annually, review current finances with your student.

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Help Teens Create Good Credit
Your teenager may not understand what a good credit record is — and why it's so important. You can help.

By establishing and maintaining good credit, your teen can more easily borrow, get a job and rent an apartment. A bad credit record can hinder him or her. Once a credit bureau labels someone "slow pay" or "delinquent," it passes the information to others, including lenders, apartment owners and employers. Negative information can stay on file for seven years — a long time for your child to shake a bad reputation.

Here's how you can make sure your teen creates, maintains — and gets credit for — good credit:

• Co-sign a small loan. Then make your teenager responsible for the payments. Remember: You're legally obliged to pay if he or she doesn't.
• Encourage credit union checking and savings. If your teen handles these accounts responsibly, he or she is a good candidate for credit.
• Suggest applying for our credit card. Paying it off promptly will your teen get other loans. Don't allow extra cards. Creditors worry if would-be borrowers have too much access to credit. Plus, the temptation to overspend might be too great.
• If your teen is turned down for a loan, apartment or job, find out why. It might be inadequate income, insufficient collateral, failure to disclose debts or a poor credit record. If wrongly accused, your teen should talk to the credit bureau and have the file corrected.
• Teach teens to face obligations squarely. If they can't make payments, they should contact lenders. Perhaps an arrangement can be worked out, for example, paying loans off over a longer period of time. Doing nothing is much worse than paying something.

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Set Up Accounts For Kids
It's never too early to teach your kids to save. They'll learn the basics of money management and have funds for important events later - like college.

Start with accounts at your credit union. Then encourage your children to make regular contributions. They might, for example, save a portion of each allowance - or job money. If they receive a monetary gift from grandparents, suggest they save all of it.

As they'll soon discover, even a small amount adds up. And, remember, kids love to watch money grow. Share monthly or quarterly statements. This keeps them excited about saving.

For an additional incentive, encourage kids to set goals. Perhaps Cameron wants a bike. By asking him to contribute a portion of the cost, you teach the value of saving. You also give him a sense of achievement.

To keep goals clearly in mind, name accounts. One might be "Cameron's bike." Another might be "summer camp."

Talk to us. We'll help give your children a healthy start on life.
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Teach Students About Cards
On campus with your child are pushy credit card companies. They target students — hoping for a lifetime of business. Cards are high-priced. There are no minimum income requirements. Nor must a parent co-sign for kids 18 or older. Uncontrolled usage can mean years of debt — at a time when your child is getting a start on life. It also can mean a bad credit record.

Here's what parents can do:

• Talk about the ABCs of credit. Kids know they can buy more with credit than cash. What they don't know is the price of that convenience. Explain interest rates.
• Set guidelines. Examples: Put a limit on what can be charged each month. Also give guidelines on what to charge. Credit cards should only be used for items like books or air fare, not pizza.
• Have us issue a card of yours in your child's name. This puts you in control. Then make him or her pay for whatever is charged — with the bills coming to you. Once your child demonstrates an ability to handle credit responsibly, help her apply for her own card. She'll stay away from high-priced plastic — and learn an important message: People's Community Credit Union offers the best financial deal around.
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