Description:
One important lesson to teach your teenager is to not live beyond oneÆs means. Taking on loans or shopping with a credit card is spending money one doesnÆt have. Create a payment plan to immediately start paying on the debt. Help your teenager to set limits and not get out of control.
A good way to teach your child about lending is to start doing it at an early age. By the time you have a teenager, he or she will understand that it costs more to buy on borrowed money.
Try buying something together on credit and then work together to pay the debt off. For example, buy a computer for your teenagerÆs bedroom. Each month have an agreed upon amount of money that you will pay towards the debt. Calculate how much of your payment will go toward interest. Your teenager will see how 18 % can really begin to add up. Keep on top of it. The reward is the feeling that comes when the debt is paid off.
This lesson can help your child stay on track, hopefully, preventing crazy shopping sprees later on when he or she has left the house!