My friends with kids tell me schools now offer a basic class on money. What a welcome change from the 1990's! Fearfully sitting through algebra class instead of discussing credit cards, student loans and interest rates could be one of the largest disservices to our children.
At age 20 I met a new friend who had Airline points (another unknown to my young self) and we planned a trip to Hawaii with roughly $400 cash to split between the two of us. The plan was to camp, eat light and live like a local. We quickly learned Oahu, at the time, had poor public transportation… so we had to rent a car. I had signed up for a credit card at a Royals game that summer, $500 limit, I had never used it to buy anything. My friend had bought the plane tickets, so I offered to rent the car. This was 1999, life was easy breezy and we were in Hawaii, so of course I upgraded to the nicest Jeep which conveniently cost $500.
Fast forward to a month later, the mail came and I owed $580. In my 20-years of life nobody had ever mentioned credit card debt, interest, or a minimum payment…it felt like a foreign language. After an hour on the phone with a very nice credit agent I fully understood how much trouble I could get into with credit cards. I seemed to have a faint memory of watching my Mom cut up credit cards with a pair of good scissors while my Dad watched over her shoulder.
We owe it to our kids to teach them the basic life lessons that were left out of our curriculum. The Hollub & Svejda Group has a great resource on how to teach your kids about money. Tips you can use the next time they say, “Mom, can I have $20.”