Birds and the bees. Driving a car. The ABCs. The multiplication tables. These are all things that we teach our kids at some point in their lives. But what about credit? When do we teach them about that? Or do we? Quite frankly, my mom didn’t teach me anything about credit — and I turned out just fine. Still, for those who do want to teach their kids about credit, when is the appropriate time? I have a friend, Jennifer, who is already teaching her kid about money and credit. The kid is six. When I found out that she was already teaching her daughter about this kind of stuff, I knew that I needed to have a chat. What mother starts teaching her daughter this kind of stuff at six years old? And does the information even sink in? “Considering her age, I figure she only hears what I’m saying until something shiny distracts her,” says a laughing Jennifer. “In all seriousness, I am amazed at how much she remembers and will bring up later, especially if I do something that contradicts an earlier statement I made. I think that if I make consistent statements time after time, and practice what I preach, it will sink in.” Jennifer has a point. Repetition makes a lot of sense, even if we’re talking about a six year old. Kids are a lot smarter than we give them credit for. They tend to remember every single thing that we wish they’d forget, so why shouldn’t it be the same for the things we wish they’d remember? Although six years old might be a little young, I don’t see anything wrong with it if the kid is already asking questions. “She is full of questions, which, I think, is typical for her age. I just try and keep my explanations simple — maybe three to five sentences,” Jennifer says. “As a result of being a single parent, I take her with me most places and realize that, for better or worse, she watches every move I make. So, she sees how transactions at various stores go. I use these as daily lessons for not only how to manage money, but math lessons, and lessons on how to interact with people.”What’s interesting is that my mom, a single parent, didn’t teach me about money management until I was a lot older. I still remember her telling me to sock away 10% of my paycheck whenever I got paid. “Always pay yourself first,” she’d tell me. It was good advice. But we didn’t talk about credit — other than her saying that people should always pay their bills on time. Words to live by for sure, but not the be all, end all of credit knowledge. Jennifer, meanwhile, takes the conversation a lot farther. Where my mom taught me how to count change (so that I would not get shortchanged), Jennifer is discussing really important lessons that will prove to be instrumental in her daughter’s life. “The main thing I teach her regarding money is that there is not an unlimited supply in mom’s purse,” says Jennifer. “Mostly I teach her that spending money is about choice. If we spend all our money today, we will not have money for other things. If she asks for more than one thing, I will make her choose. We also talk about saving today, so we can do things, such as take a holiday to the beach.” See what I mean? I never got that talk. In hindsight, I wish I had. It would have served me well. So far we’ve been talking about money management. But what about credit cards and credit in general? Is six years old too young to start teaching our kids about credit? Although every kid is different, I imagine that I wouldn’t start discussing credit cards with my children until they were a little older — say, eight to ten years old. But, as I said, every kid is different. And Jennifer’s daughter is really different. How different? Her daughter just got her first credit-card application in the mail. That different. Maybe U.S. Bank thought that a Visa Signature card might be a great icebreaker at Jennifer’s daughter’s next tea party. Given that dogs have received credit-card applications in the past, I am not surprised that credit-card companies are pitching a six-year old. In all seriousness, though, I suspect that the application was sent because of the frequent-flier account that Jennifer’s family has with Northwest Airlines. My guess is that the daughter’s Northwest Airlines frequent-flier account triggered the offer for the Visa Signature card. Still, imagine if this card application had been sent to a family who wouldn’t think twice about getting a credit card in the daughter’s name. Heck, even Jennifer (the wonder mother) thought, for a split second, about applying for the card — just as an experiment to see if U.S. Bank would really issue a card in her daughter’s name. “I can absolutely see this as a temptation for fraud,” Jennifer told me. “It is nothing short of identity theft and that is the main reason I could not see myself applying in her name, even as a ‘harmless’ experiment.” So what did the daughter say about the application? Was there any discussion about it? Jennifer says that she did not talk with her daughter about it. But the topic of credit cards does come up from time to time, says Jennifer. “When we are at the market or another store she will ask about using a credit card versus cash,” according to Jennifer. “We discuss only using credit cards if you can pay it off in full at the end of the month. In her mind, the only reason I carry a credit card is so I don’t have to carry cash. I am okay with her knowledge being limited to that at this point. As she ages and asks more questions, I hope to give her an education that I didn’t receive until I was in my 20s. My education was built on trial and error, hopefully hers is built on years of discussion between me and her.” Heck, I couldn’t have said it better myself. Again, this is the kind of stuff that I wish my mom would have taught me — at any age. There can be little doubt that Jennifer’s girl will be way ahead of her peers when she gets older. Indeed, it seems likely that Jennifer’s little girl will be responsible enough to handle cards at a young age. Will there be a credit card in the little one’s future by the time she reaches the ripe old age of 16? An authorized-user relationship at that age would seem like a no-brainer. “It’s hard to say what I will do in 10 years,” says Jennifer. “If it were today, I would probably get her a prepaid card and let her manage that rather than having access to my credit limits.” Regardless of what Jennifer decides to do a decade from now, I think it’s safe to say that her daughter will be well situated and well prepared when it’s time for her to start making money management and credit decisions on her own. I’m not sure what the ideal age is to discuss money and credit with the children, but I do know that it should definitely occur well before they become an adult. In the meantime, I have a closing comment for Jennifer’s daughter: you’re one lucky kid to have a mom like yours.
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