Book Review: Raising Financially Confident Kids
|August 5, 2012||Filed under Reviews|
The author of Debt-Proof Living and 7 Money Rules for Life brings another valuable book, only this time, it’s about helping children well before they receive their first credit card. Mary discusses the culture of consumerism and her own personal struggles with debt.
One of the provisions of the CARD Act of 2009 states:
A credit card cannot be issued to someone under age 21, unless they have a co-signer (who is 21 or over), or can provide proof of a means to repay.
Apparently companies sneak around this by allowing students to count student loan debt as qualifying income. How’s that for using debt to create more debt? Consumer culture.
I remember getting my first credit card at the age of 18 and my limit was only $500. Given that, it is absolutely disgusting that people can get cards with $7,000 limits. I question how credit card companies are making any money with individuals filing bankruptcy or perhaps only scraping by with making the minimum payments.
Inspired by her Uncle Harvey, Mary developed a plan that includes a monthly allowance (salary is the preferred term in this case), part of which must be saved or invested, a list of responsibilities, and a part many parents may find difficult: no interference regarding the choices her children made. If duties were not fulfilled, the children were issued citations. Of course, the salary method only works if you don’t bail your kids out every time they’re in financial trouble.
This book brings to light the ways in which young children are indoctrinated to become consumers. My five and a half year old has officially reached the “buy me this” stage and naturally, she assumes that I have a never-ending cash flow. I’m still on the fence regarding Mary’s points about maintaining financial privacy and not using anything but cash in front of your children, but I can appreciate her point of view.
All in all, I recommend this! I have a credit score around 790 and considered myself “aware,” but as it turns out, you learn something new every day.
The bottom line? You are your child’s financial guru. Start early!
Disclosure: I was provided a free copy in exchange for an honest review. All opinions are my own!