Marketplace's Small Town Hall posed financial questions to eight kids and share a series of seven revealing videos. This one struck me as particularly interesting, because it was so clearly a debate among the small town hall attendees:
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Should kids get credit cards? Gift cards? Re-loadable debit cards? How do you handle the cards vs. cash lessons at home?
This is an open discussion, so you're welcome to link to your related Gather articles or other online resources. Your comments & articles may be quoted on American Public Media or Minnesota Public Radio web sites.
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Julia Schrenkler
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Minnesota Public Radio
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Comments: 57
Paul, if your 14yo knew that do you think it would change phone usage / behavior?!
We'll go through the same process eventually with credit card. But that's not gonna happen for a couple years. Our focus at home is on saving for something you really want. Any kind of credit line would erode that lesson, I think, right now.
I think when she is 17-18 that would be a good time to start letting her pay her own bills with using a credit card (pre-loaded). Also the thought is that she will be using her own money for some items as well - we won't be supporting forever!
That's an incredibly useful - and perhaps unfortunately rare? - lesson.
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Priscilla thank you for doubling back, that filled in the picture for me. I wonder if car insurance was the first real bill many of us experienced.
At this point he's basically given up on asking me for it and is earning more through baby sitting in the neighborhood. So perhaps my bad parenting has an upside. He's already met an unreliable client.
"It opens their eyes to math uses they never imagined."
and I can't really add to that, other than to say as adults we should all hope - or create - for these experiences for kids.
My 2 older kids never got a credit card until they could get it themselves when they were living on their own and had regular job. We got the youngest one a credit card of his own when he went to Europe on a field trip while still in high school. He had plenty of cash along but it was given with the intention that he only uses it for emergencies... in case he found himself delayed and had to stay over or separated from the group. He used it of course, to buy souvenirs! Hah! The sneaky boy bought me a fabulous bottle of perfume in Paris... how can I get mad? Sigh.
How do your kids handle credit now, Duckie?
One of the greatest benefits of sharing (since I had account access) the credit card with my children was that they never realized it enabled me to monitor ALL their buying habits: clothing, food, entertainment, books, etc. It was a wonderful way for me to have an open window into their world. It also taught them responsibility in bill paying, budgeting and discernment in their shopping choices.
Before they are on their own, some of the best lessons to teach children are to save money for the future, spend income wisely (on essentials before pleasures) and avoid debt by paying as you go instead of buying spontaneously or on credit.
We are currently going discussing each purchase he makes and how it relates to the big picture. We also go over things like entertainment and food that we spend as a family and put it into perspective.
It's not so much the credit card that is the problem, it's the instant gratification versus saving, the need versus want dilema, and the buying long term stuff versus instant consumption.
"It's not so much the credit card that is the problem, it's the instant gratification versus saving, the need versus want dilema, and the buying long term stuff versus instant consumption." - Winston Smith
Funny, Winston, the other day I was wondering if there could be a Monetary example of the Kids vs The Marshmallow Test.
We try for long term "big purchase" but I-Tunes, ball caps, and smaller items seem to get bought.
The candy & comics of the teen set!
If only we could go back in a time machine and observe ourselves at that age... I couldn't throw stones.
He has carried it since he was 14.
That's an important distinction, isn't it... debit vs. credit. Would you have your 12yo maintain a baseline of funds in the savings acct?
These are really good and you can order any of them for free. Kids might actually read them. A few are online as .pdfs. I personally own "The Story of the Federal Reserve System."
Don't laugh! I learned as much about the Fed from that comic as I did from my economics degree.
I was responsible, in part because both my parents worked since I was of school age and I had to take care of myself. Since I did so and did not harm the house and took care of the cat when necessary, I was given responsibility for a car at age 14 (Texas). My parents couldn't understand why I never went anywhere. (I didn't want to spend the gas money.)
Can't disagree with the directness of that. I do wonder about how many parents deal with the kids in the middle, who may display extraordinary responsibility some days and perhaps uhmmmm less responsible behavior on others.
Larry, not to throw out a tangent, but do you ever share Gather posts/articles about your youth and experiences? I checked your profile and see many money-related post titles, but wondered if you share your background.
My background is pretty boring. I grew up poor in west Texas. We moved a lot. I was shy. I was usually the outsider but I loved reading and the radio so I didn't mind not having many people to play with. I always made friends easily but I was not popular (if that makes sense).
I also don't write about myself that much because I don't want people judging my ideas (which I feel are extremely important) on the basis of my characteristics. I am totally unimportant. Those ideas are vital to humanity. You should be thinking that I'm some kind of a nut for making statements like that. But I have had a very happy and successful (I have accomplished most of the things I set out to do) life which would indicate that I am more sane and certainly more rational than most.
Debit Card, Maybe, but with certain guides and rules
The guidelines are pretty much teaching them how to budget and to keep track of their money. Since the paypal account would be connected to mine I could watch what they spend it on.
The main rules would be don't spend frivolously and to ask their mother or me first when spending over a certain amount.
But a credit card? Someone made the point about getting a job first - and that's a no-brainer. My children got credit cards only when they got to college (and had already held regular jobs for a few years). They each see the benefits of establishing credit through use of a card - but also in managing that card responsibly. I think it's something you have to put into practice to really learn but parents have to be guides.
It's easy for me to say that "kids" should not be allowed credit cards until they're 17-18 (college age) and have a work history because that's what worked for us.
I think about gift cards or a "digital allowance" a lot. As a kid I didn't have to think of that, but the next generation does. There are so many ways to spend money... why not prepare them for all forms? Even adults could benefit from it... even say, iTunes' limits.
I have a young child and one of his presents is a gift card so that he can decide what to buy and he learns that even though it isn't cash - even plastic can have a fixed amount of money associated with it.
Plus he gets a kick out of having a gift card and presenting it to a cashier when he buys something.