Financial analysts say 18-25 year olds are the fastest growing age group when it comes to declaring bankruptcy. They say it's a problem that can be avoided if parents teach either kids about money at an earlier age.
It's an issue that many Grand Valley parents say they have to deal with.
"My older daughter was always kind of a burn a hole in the pocket type," said financial expert Ralph Mollica. "She got money from work, went out, and spent it."
Mollica says now that his daughter lives on her own, she is much better about managing her money. But he and other financial experts agree that if she hadn't been taught about budgeting as she grew up, she could be a lot worse off now.
"Not only are young people coming out of college with tremendous debt, they want the new cars and they want the new houses," said Lynn Alexander, Regional VP of Primerica. "They're going into a great deal of debt."
That's why financial service organization Primerica says it's important to start teaching kids about money as early as 6-years-old.
"Most kids that age think you can write a check just because you have more checks left, or you can just use that plastic card," said Alexander.
Experts say right off the bat, it's important for your kids to know how money works.
"We start to build in, teach what money is, teach the value of money," said financial expert Jay D. Muller. "Then you teach the concepts of how to save money."
They say showing your kids they have to earn money by doing chores or other work is a step in the right direction. Then, you have to let them to spend it or save it how they want, making sure they understand once the money is gone, it's gone.
"Not making all the choices for them is important," said Mollica. "But at the same time, help them to see the choices they're going to make and the consequences of how that works down the line."
As kids start to get older, experts say parents should encourage their teens to start thinking about bigger items they will have to budget for, like cars.
If your teen has a job, they recommend opening up a checking account for them, and getting them a debit card rather than a credit card.
"Giving them a little responsibility without giving them credit is a good way to do it," said Mollica. "Start with little things and let them learn that right away."
But at the end of the day, they say it's the parents' efforts to teach their kids about money that will set the bar for their child's financial future.
"If they don't know much about it, they need to contact somebody who can educate them," said Alexander. "That way we can educate the kids as well."
For a free guide on helping your kids or teens learn about money, call Primerica at (970) 254-9854.
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