I think people underestimate how far reaching the impact of not managing money effectively is; kids dropping out of college, one of the leading causes of divorce, debt and bankruptcy rates rising for young people, and so on. It’s scary.

It’s less about how much you make and more about how to manage what you make effectively.

Another great illustration that if we don’t teach our children, someone else will. I know I’d rather my children learn about credit and debt from me than the credit card companies themselves!

I wonder about that 65.7% of college students who graduate in debt. Is that credit card debt, or just “debt”? I ask, because student loan debt is pretty much unavoidable these days, and I would expect a large amount of that to be student loans. I’d be interested in how much credit card debt as well. I know I graduated college with about $10-15k in student loans, but only about $300-600 in credit card debt.

The older one was always a spender (and much more generous with his money) and the younger was always a saver.

Now that he’s in college and taking student loans for part of his expenses, as well as working part-time, the older one is becoming more careful about his money and taking the lessons more to heart.

This is part of the reason I think the talks are helping – I do see some changes in his decisions, overcoming his natural tendency to spend.

You raise another important aspect of teaching children: each one is different! It’s easy to believe that our kids think the way we do, but that just isn’t reality. It’s also important to realize that children will learn the lessons, whether it is from their parents or others. Wouldn’t it be better if we taught them the lessons we would like them to learn?

College kids are faced with so many firsts: first house, first bank account, first credit card. If they don’t have good financial habits before they go off to school there is a good chance they will make a mistake and end up in debt. A staggering 65.7% of college students graduate in debt.

It is vitally important that we start teaching our kids about money early. Good habits instilled when children are young stay with them.

My mother, being of a different generation, finds it odd that I’m willing to discuss anything with them and answer any question, but I remember being frustrated as a child and an adolescent by the lack of answers to my questions!

They are 17 & 22 now, but I’ve always discussed things on a level they could understand at the time. I remember a 2 hour drive to a soccer tournament with my younger son – then about 12 – in which we discussed credit in terms of buying a car or a house, credit cards, paying interest, saving money and earning interest.

In a later discussion we covered the importance of paying bills on time & the consequences of not doing so, what a credit rating is, etc.

I’ve now covered these topics in depth with both boys, sometimes using print outs from the internet to illustrate certain points.

I figure that with each discussion a bit more will stick with them… Hopefully someday this will make a difference in the choices they make.

To some degree I think my high school son has a better grip on this than the college student, but he’s not been out on his own much, so he’s had less decisions to make.

So far I think they are making reasonable choices in how they spend money, given the resources available, but the discussions continue!