Gifted Issues Discussion homepage Forums Parenting and Advocacy Kids & money

I have to step in quickly here and ask that you please move away from the religious/Biblical discussion. I understand the context in which it was introduced but this is not the proper venue.

Post deleted to keep in line with request

Agreed. A quick web search shows many resources for teaching kids about credit and loans. The most timely market research on job availability in a field of study may be the US Department of Labor, Bureau of Labor Statistics, Occupational Outlook Handbook (OOH). The "Big Future" feature of the College Board also provides information about majors and careers.

The assumption being that one needs a credit rating. The only reason to have a credit rating is so that you can aquire more debt.....so you can have a better credit rating....so you can acquire more debt....

There are still mortgage companies that manually underwrite home loans at reasonable rates for people with a zero credit rating. Everything else (and preferably the home too) save up and pay cash, everywhere I know stilll takes it.

To be rich doesn't take big risks, slow and steady also wins the race....and a lot more often than taking big risks. I might suggest the book, "The Millionare Next Door"

Yes, there are a lot of thought patterns to possibly teach your children concerning money. All I ask is that you look at how many times people have gotten into deep trouble with debt....and how many times they get into deep financial and marital trouble with debt, and how man times people get into deep financial and marital trouble by having no debt. Seems and open and shut case to me but you're free to apply your own logic.....their your kids you're teaching for the future.

This is fundamentally untrue, because one of the most important factors in a credit score is the ratio of accessible debt versus utilized debt. This means as your long-term debt is paid off, and you don't acquire new debt, your credit rating improves. If you get a new credit card with a $25k limit, and carry a $0 balance, you just bumped your credit score up, and it didn't cost you a dime.

Of course, you have to use the card every once in a while, or they'll close your account. So, you use it to pay for dinner a couple times a month, and pay off the balance when the bill comes.


Who? And what rate will they offer, say, a household earning 1.5x the local median? Because I'm well aware of loans to people with nonexistent credit backed by significant assets, but if you have those types of assets, you're kinda already rich to begin with.


Except that life happens. There's an accident, medical bills are coming in (medical bills are the #1 cause of bankruptcy in the US), your rainy day fund gets used up, and your car fails... now what? You lose your job, and now you're riding the bus and standing in line for a block of government cheese (is that still a thing?).

Credit is an economic shock absorber.

Also, the thing about "saving up" is that you get less than 1% a year if you put your money in a savings account (which won't even keep up with inflation, so your savings lose value day by day), but you can get far better returns putting that same money in appreciable assets, though it may not be immediately available. So you can continue to use credit on a situational basis, while your nest egg continues to grow. This is an important path to acquiring wealth.


You won't get any argument from me on the point that many people are bad at managing credit, but we're a gifted forum here, so we expect our children to be smarter than most. Teaching financial literacy is essential to that, though.

For more information about a zero credit rating mortgage you can start here:

https://www.churchillmortgage.com/c...s.aspx?CID=1&RLID=0&SCID=0&HLSID=&SLID=0

Rates vary depending on numerous factors as with any mortgage loan.

As for the rest of the prior post, you of course can teach your children anything you wish about money. If you want to teach them that debt is a smart idea....go for it.

As for me and mine, I'll teach them to spend less than they make, save up for their purchases, stay out of debt, save 6 months of wages for an emergency fund, and let their income be their biggest wealth builder.

USA TODAY has just published an opinion piece which touches on the subjects of money, the economy, employment prospects, and unpaid internships. Although the specific internship experience is with a political campaign, therefore the article has political overtones, however it can also be read simply for information about money, the economy, employment prospects, and unpaid internships.
When teaching children about money, it may be wise to touch upon the realities they may face in a shrinking economy.

Pew Research publishes recent numbers from the US Bureau of Labor Statistics, in an article by Drew Silver dated June 23, 2015, and titled The fading teen summer job. Graphs depict that in a strong economy, about 55% of teens worked summer jobs while in recent years about 32% of teens have summer jobs (ranging by ethnicity from about 19% to 23%, 25%, and 34%).

Some may say that in a strong economy, individuals have a choice to stay in the workforce longer... entering the workforce earlier and retiring later; Meanwhile the softening economy resembles a game of musical chairs.

So now it's like everyone is choosing to go to law school!

There is really no point in debating Old Dad on the merits of his debt-free absolutism. He's promoting the Dave Ramsey plan. Dave Ramsey is a personal finance guru who targets Evangelical Christians with his biblical financial advice. He teaches things such as the "debt-snowball method" in which people pay off smaller balances first instead of their debt with the highest interest rate because he assumes that his audience is too stupid and lacking in motivation to stick with a plan that takes longer to see results, but saves them money in the long run. He may be right with regard to his assessment of his target audience, but his methods really have no place in a discussion about what to teach highly gifted children who are capable of understanding more complex financial strategies.

https://en.wikipedia.org/wiki/Dave_Ramsey
https://en.wikipedia.org/wiki/Debt-snowball_method

Don't knock it till you've tried it

"Nonetheless, Ramsey has made a convert out of a secular journalist with one of the pricey M.B.A.s he likes to poke fun at. I have never felt as serenely in control of my finances as I have during these months of knowing that every single dollar is where it is supposed to be: either in the bank, or on a well-chaperoned date with our envelope organizer. The process has been surprisingly painless but, even more surprisingly, pleasant."

http://www.theatlantic.com/magazine/archive/2009/12/lead-us-not-into-debt/307751/