Passing on financial knowledge to the next generation is important. If you don’t have much positive to share, it is important to at least be able to steer young adults in the right direction. Even if you have to use the “Do as I say, not as I do” method to keep them from making the same mistakes, do it sooner rather than later. It is better to safeguard a young person’s credit in the beginning then try to save it from harm later. Make sure they are aware that easy money comes at a price. Use a safe payroll advance loan as an example. Let them the price of borrowing and how easy it is to fall into debt traps. It is easier to prevent problems rather than fix them.
There is a lot of hard work that goes into supporting a family. Some children who were handed everything on a silver platter may have trouble adjusting to life on their own. Who knew that a paycheck had to cover so much? Shopping trips or eating out is easy when plastic pays the bill. These kids were blinded from the mechanics of running a budget while they grew up. They will learn quickly how fast money flows out of the bank.
*Interest – Young adults need to understand what it is, how it is used and what it does for a household budget. Credit cards are not hard to get. Spending money is even easier. Knowing how to pay it off and creating a budget to handle the payoff is definitely knowledge to be shared.
*Budget – Introduce computer software to get them started. Teach them the basics and the programs will do the rest. You might want to tell them how lucky they is that the pen and ledger management system is no longer the only option to a better budget.
*Maintenance – You can’t set it and forget it. You have to pay attention to your money. Know what is in the bank or at least a general ballpark figure. It will make a difference when you want to use your debit card or take cash out. Hopefully, this knowledge will prevent you from spending more than you can afford and limit the amount of credit card debt you carry.
*Save – Begin a savings account with whatever you have. If you can only spare $20/month, that is fine. Work your budget once again to try to maneuver a bit more into your savings. Have it deposited directly into that account with your direct deposit.
Limit payroll advance use to emergencies
*Good debt vs. bad debt – It is important to have some debt, but you have to know which kinds will help your credit and which ones will hurt. If bad debt is abused, bad credit is a result. Credit card debt and safe payroll advances online must be used within limits and the payoff handled correctly. This is a great supportive lesson to help understand how interest can defeat a well-planned budget.
Use yourself as an example. If you have seen great progress within your own finances, show them. If you have made your share of mistakes, then that is important to share as well. Teach young adults through life experience and open their eyes to financial education to build a better future.
