Readers seem to have a lot on mind making children and young adults money conscious based on the responses I have received to my columns on Children and Money (What Children Need to Know About Finances) and building women’s financial confidence ( Financial planning and investing: women fill the trust gap).
For example, when Ramin Hashemi wrote when his two daughters were young, “I had a deal with them to double their money from babysitting and soccer games if they invested it. I’d put the money in a brokerage account and buy relatively low-risk stocks to relate to. â€His daughters, now in their late twenties, are both teachers who“ have their income, expenses, investments, and retirement plans â€.
Reader Jeff Prouty was recently asked for financial advice by a 22-year-old friend of his daughter’s. At the top of his list: “Live under your means.”
Steve Cline recalls that in the mid-1950s his father gave him 35 cents a week and two pieces of advice: “Spend, save, and give to church or charity,” writes Cline. “Also, a dollar saved is better than a dollar earned because you don’t have to pay taxes.” In taking that advice, Cline said, his parents “worked hard, raised five sons, and lived comfortably.”
Credit card advice and more. A few readers questioned my advice on credit cards for young people.
“They realize that children shouldn’t get credit cards. But there’s a good reason to start early: to keep a credit history, â€writes Theodore Wagenaar. “I added my then 16-year-old daughter to one of my credit cards. When she later got her own card, she already had an excellent credit history. “
Debbie and Jay Zimmer added their daughter to their credit card while they were in high school, with one condition: “She had to pay us anything she wanted to charge the card,” writes Jay.
I understand this point of view, but I still prefer young people with a credit card to wait until they are old enough to get one in their own name – usually 21 – and pay the bills with their own money. Your personal credit experiences may vary, but credit card companies were happy to issue cards to my three children when they turned 21. It won’t do much good if young adults don’t have the self-discipline to curb a parent’s creditworthiness in their expenses when they get their own card.
If you really want to add a child to your account, at least follow Zimmer’s example and ask your child to pay for their purchases.
Some readers – Jamal Kazmi and Henry Barclay – asked for recommendations for books on money and investing that would be suitable for high school students. I would recommend How to turn $ 100 into $ 1,000,000 by James McKenna and Jeannine Glista and The Motley Fool Teenage Investment Guide, by David and Tom Gardner.
Finally Victoria L. asks for help. “I tried teaching money management to my 16 year old granddaughter, but to no avail. Her mother, my daughter, gives her whatever she wants. I try to find something that piques her interest and makes it clear to her that money is not a giveaway. “
Victoria, I suggest that you let your daughter read the advice in What Children Need To Know About Finance. She’s doing your granddaughter a disservice, and hearing this from someone other than you may help.
You can also try some of the strategies suggested by readers. Like Ramin Hashemi, you could offer to double your granddaughter’s savings for something special she wants. Or you could buy shares in a company that appeals to them. This is what Henry Barclay has in mind for two granddaughters who will graduate from high school next year.
