Here’s the third of four key money phrases your children need know – and should feel comfortable using – when faced with making financial decisions:
3. I made a mistake
Mistakes are tough to admit and even harder to live with. Money mistakes that get buried become compounded disasters. Teach your child that it is only human to make a mistake and that by admitting to the mistake, you can fix it and learn from it.
Often our kids hide money mistakes. In college, they are eager to prove they are worthy of the independence. Chances are that will translate into them living beyond their means via credit.
Before they leave for college, tell them that while you believe in them, you anticipate they will make some money mistakes and that you understand that managing money on their own is a learning process – one that will include mistakes. Advise them that the best way to handle any missteps is to bring money mistakes out in the open right away so they can be fixed and learned from.
Credit card and checking account offers will be everywhere freshman year. Marketers are incredibly effective at enticing students with offers of food and clothing as a reward for signing up for their credit or checking offers. As parents, we have to get out in front of this by going with our kids to learn about one of the offers before we head home after dropping them off at school. Encourage your child to ask questions about the offers until they understand completely what works and what does not in that offer. This allows the student to say no with your support. YOUR presence takes the pressure off the student. Lessons get learned.
Before your kids leave for college, sit down with them to create a budget. Then, establish a regular time to go over financial accounts with your student. Review any credit or checking accounts with your kids once a month. It’s easier to clean up problems sooner rather than later – so keep your appointment with your student and teach him or her that mistakes happen –and can be fixed.
Stress the importance of keeping their financial information to themselves and protected. Reviewing statements regularly will pick up any problems as will reminders to them to change passwords to protect their identity from any potential online and offline thieves.