Endless money supply is everyone’s dream solution to bad credit. How we wish that money grows on trees and with no effort at all we would all be rich. But that would also mean the devaluation of money, it would be equal to nothing more than a piece of paper. So it is important to maintain balance in the financial world. We must work hard to earn money in order to appreciate its value. Sad to say that many of our younger generation don’t really appreciate the value of money. It may be because they don’t understand the importance of it or the hormonal tendency of taking risk when you are young. Whatever the case may be, it is important that we should teach the young the value of earning and spending money. Given that financial skills are one of the essentials in life and the fact that schools don’t really teach children on financing, as a parent you must consider teaching your children a thing or two about managing finances. Adding insult to injury is the fact that credit cards are readily available and first time card holders have a tendency to over use the card without thinking about how they will repay the debt. This often leads to default on payments and to bad credit. Lessons from parents are important but more important is being a good financial role model for your kids. You yourself should have no bad credit record and you can show them how to do these very useful tips.
Avoid Bad Credit
Be thrifty – It is a basic tenet of everything that has to do with money. It is important to teach this basic principle to the younger generation. And that for every effort of being thrifty comes countless rewards.
You have to wait for or earn something that you want – Being thrifty goes hand in hand with being patient. True that waiting will give you something you want, it is important that we clarify that waiting is not the same as doing nothing, and that something you want is very different from something you need.
Make wise choices when it comes to money – Money doesn’t grow on trees, yes we’ve said that before. However it is most important that we use it wisely. If you worked hard to earn it you should not squander it. The younger generation have more trouble with this because of peer pressure. New phone models, new shoes, new car and a lot of new other things. Always remind your children that giving in to these pressures can cause them to spend beyond their means; over charging their cards can lead to bad credit.
Understanding debt – We must also explain that sometimes we need to borrow money. However, you should only borrow money for needs not wants. When you borrow money, just like everything else borrowed, you must return it. Being responsible in paying back debts will eliminate bad credit rating in the future.
Aside from responsible money management it is important to instill responsible credit card use. In time your child could be using a credit card of their own. So your lessons will surely help them avoid having unpaid debts and getting a bad credit score and ultimately give them a secure financial future.