Teaching Kids Financial Responsibility

In a world of advertisements, children face huge temptations to spend and spend.
By Suzanne Barlyn ,

It's hard for children to know the value of a dollar when we live in a world of plastic.

For many children and teens, spending is no longer a treat. It's an expectation -- which credit cards are making irresistible.

Teens are using more credit cards all the time. A recent poll conducted by Junior Achievement and

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found that 10.4% of teens are using plastic, vs. 8.5% a year ago.

The increase is disturbing, I think, because teens can't afford to risk financial ruination by letting their debts mount. Yet at the same time, I'm sympathetic to their plight. Even the simple act of driving around town requires more cash now than most people carry. A movie, popcorn and a tank of gas can easily require a wad of $20 bills.

Gasoline, in fact, ranked as teenagers'

top credit card expense

-- supplanting clothing. But a 16 year old who watches the fuel pump at the gas station suck up money at a $4-per-gallon clip, may learn an invaluable lesson about the finite nature of cash -- one that's seemed absent in recent years.

The plethora of credit cards available to consumers, however, can make it easy for young people to forget that they owe real money over time.

Teaching my three children, ages six to 12, that our checking account isn't a bottomless pit is an ongoing challenge.

I must be in good company. Recently, during a rare trip to

Toys R Us

, we noticed a few children crying because they wanted something that their parents weren't buying. "This seems like a terrible place. Children cry when they come here," remarked my 12-year-old son.

I wondered: when did a toy store outing become a source of agony? This must be what happens to all of us, I suppose, when we realize that we can't afford everything that's out there. Children are just more adept at wearing their emotions on their sleeves.

It seems there's so much more to buy than when I grew up as a child in the 1970s. Sure, children were still tempted by materialism, but I don't recall pining for video games at $50 a pop -- or the latest $300 electronic gadget weighing heavily into my youthful social life. Everyone in my children's circle, it seems, has either an

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iPod, an X-Box or a Wii.

Despite my efforts to shield my kids from commercialism, it's hard to avoid encountering marketing messages even in our own home when watching television or using the computer.

Online shopping is a huge convenience, but it also means my children's sneakers magically appear on my doorstep. It's not obvious to them that I've just plunked down $140 on three pairs. Yes, I used a credit card, but I still must pay the bill.

Spending Responsibly

But I won't stop my efforts to raise children who will hopefully spend responsibly -- and stay out of debt. Here's what I do:

Make them wait

. I ask my children to wait 24 hours if they see an item they want online. The goal is to avoid impulse spending. They often don't want it by the next day.

Pay cash

. When they

do

want an item from the Web, I require them to sit next to me as I process the transaction, and pay me immediately with cash they have saved from allowances. The strategy demonstrates that credit cards aren't a free ride.

Avoid recreational shopping

. You won't find my family in a mall or discount store unless we absolutely need to buy something that's impractical to purchase online -- such as cleaning supplies at

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.

I always announce the purpose of the trip in advance and explain that I won't be purchasing goodies that day. We don't always leave the store with happy faces, but at least we establish that shopping sprees aren't an everyday occurrence.

Suzanne Barlyn is a writer in Washington Crossing, Pa.

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