There is no one easy way to make our children understand the value of responsible use of credit. Education pertaining to finance and credit specifically is not something that is provided early in school or even later in college. There are certain organizations such as the Jumpstart Coalition that plays host to National Financial Literacy Teachers Conference where teachers from middle and high schools are invited to attend. The purpose is to provide and arm the educationists with financial literacy tools and techniques that they can then use to educate their students about credit and other personal Finance subjects.
However, as a parent you play a pivotal role in helping your child understand matters pertaining to credit and personal finance early on in their lives. Ideas about saving and handling money within a budget should be inculcated in children early on in the years. The sooner you start the better. A child can be exposed to how you budget your monthly expenditure and balance your cheque books every month so that they can gain an insight on how to manage expenses on a certain income. If your child is old enough you can make him a joint account holder or an authorized user on one of your credit cards. Not only will this teach your child how to use credit but also serve to build up a credit history for them early on in their life. Having a credit history when your child passes out of school or college will be an immense boom to him/her. A credit history forms the very basis of getting approval for credit cards, automobile loans, housing rental and even getting a job. By giving them a credit history early on you will be giving them a solid financial foundation to start their independent life on. It is important to teach them to use the credit account wisely. When you add them as a joint or authorized user on your credit card make sure that they share some responsibility about making the payment for the things they purchase. Every time that you check your credit report you can sit down with your child and demonstrate how they should check theirs. It will help them understand how a good credit rating is determined by responsible use of credit and how important it is to have a healthy credit report to have many services and advantages available to them in the future.. There is no single way to educate your child out the importance of financial responsibility and use of credit but. The best you can do these set a good example yourself and make the child are part of your financial management.