Back and rejuvenated – Kids and Money

June 14, 2007

My recent vacation has recharged my batteries, help reprioritize my life and got me moving in more ways than one.   So, with that, I will jump right back into the deep end of the pool and get busy sorting my life out and helping others do the same.

Today I read an interesting article on MSN Money about today’s youth mistakenly believing they will be rich.  Now some will but there appears to be an over abundance of children believing that despite career choices such as teachers, they would earn a six figure salary and fall into the scant 5% of Americans in that bracket.  

When asked about their future, most polled for this article were not concerned, believing big bucks were simply around the corner.  What was even more apparent is that they don’t have any true idea of how they will earn that six figure income.  The fact of the matter is that today’s youth have a very unrealistic view of money, earning power and debt.  What will happen to these kids?  Well, since only 5% of Americans today boast a salary greater than $100,000, the other 95% is likely to end up in crippling debt before they have reached their 30’s taking out gigantic student loans believing their earning power will only increase and significantly offset the loan debt.  As well, credit card companies are making it easier to get credit cars and most college graduates are leaving college with significant consumer debt on top of their student loans.

This trend is disturbing on many levels but for me personally, I see it with my son.   As I posted earlier this year, my son has been trying to convince me to buy a new vehicle when my 9 year old car is perfectly fine.  He now has his eyes on a paddle boat that, in his words, ONLY costs $500.00.  We don’t need a paddle boat, nor do we want one, and spending $500.00 on a paddle boat simply isn’t going to happen, especially since we share a canoe with a relative. 

Clearly there are many influences at work in this great salary misconception going on in today’s youthful minds.  First we can look toward the media and the constant influence and bombardment of advertisement designed more and more for the youngest viewers.  Kids boast greater buying power than ever before; advertisers know this and focus as much energy as possible tapping into that market. 

Second, credit card companies make it easier and easier to gain credit with little or no financial rating allowing young children and teens to have access to fairly high credit limits.  Teenagers and credit cards without proper education on being “moneywise” is a recipe for disaster.  Both my husband and I achieved the grand status of credit card holders before we left for college.  Our lack of education on how to appropriately wield this power led to crippling debt that took over ten years and a fairly high income to retire.  It hendered our ability purchase a home earlier on in our marriage and meant lots of lean years right after our son was born.   

But ultimately even though the first influences two can be very powerful, we can lay the blame directly at the door of parents who fail in this one vital educational opportunity to teach their children about money, how to use it, how to save it and how to respect it.  Children look to their parents for instruction on how to manage their lives, including their buying power.  When they see parents racking up debt with impunity and trading in perfectly good older cars for the newest model, they will learn that debt is okay and image is more important than security. 

I take my job as parent seriously and with that, my husband and I will be opening our budget and sitting down with our son on Saturday morning to begin the basics of making him moneywise.   I encourage anyone reading to do the same so our children can escape the crippling debt/work cycle our generation has created for ourselves. 

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