Are You a Good Credit Card Role Model?
Setting a Credit Card Example for Your Kids
Do you ever find yourself eyeing something in a store, debating whether or not to buy it -- then finally deciding to put it on a credit card because you can't pass it up? When you did that, was your child watching you? Our actions, as parents, influence how our children approach credit card use. That's something we might want to consider when making impulse purchases.
Do As I Say...
When we use credit cards to spend beyond our means, we're setting a very bad example for our kids. After all, how are they supposed to learn the importance of proper credit card spending if we constantly act in ways that show frivolous spending is acceptable?
Talk Them Through Your Purchases
Instead of merely swiping a credit card each time you reach a cash register, talk to your children about the purpose of each purchase. If you are buying routine items, such as food or household goods, mention how this is a portion of the money you budget each month, and that money earned at work goes to pay the credit card bill.
If you are buying something big, like a new TV, or other item that you don't regularly buy, be sure to point out how you will be repaying the credit card bill -- whether the size of the purchase is supported by your monthly income, or if you will be using savings to pay for it when the bill comes.
What If You Don't Use Credit Wisely Yourself?
If you are in the habit of overspending and running up credit card debt, don't hide this from your children, especially older kids. Make sure they understand that each new purchase accrues interest along with all other purchases that you have not paid off.
Show them how you would not be paying interest if you paid off the monthly balance in full, but that you are paying interest, and how much it amounts to over time. If you are running up credit card debt as a result of difficult financial times, explain your plans for repaying it once your budget is less strained.
Even young children can recognize that using a credit card satisfies the need to pay for something that you want, but without the understanding that credit card purchases must, in and of themselves, eventually be paid for out of your checking account, they might think that a seemingly endless number of credit card swipes indicates and endless supply of money!
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