From : 7 Myths Busted to Help You Save More

Bulk buying always saves you money: It is true that unit price of bulk buys will always be cheaper. But the temptation of saving a huge amount with bulk buys usually lures one to purchase more than what is required. If you ultimately do not use what you purchase, then where is the saving?

The Financial Planning Association (FPA) has acknowledged that its program for raising the financial literacy of Australian students, DollarSmart, needs more industry support. [...] Rebecca Murray, FPA general manager of marketing and membership [...] acknowledged that not all schools have taken up the FPA’s offer for planners to teach financial literacy in the classrooms, despite it running since 2003.

- Dollarsmart Needs More Support, via http://www.moneymanagement.com.au/

What is Dollarsmart you ask? The FPA say ‘Dollarsmart is A financial toolkit for young Australians’ that examines six key aspects of financial literacy : planning, budgeting, saving & investing, credit & debt, insurance and finally study & work. This is an amazing free resource aimed at Australians available as a series of PDFs, a complete workbook in PDF or you can even order it on a CD.

What the, Fox?

There is a reason that Obama has legislated against some of the predatory practices of credit card issuers in the US. Kids and credit aren’t a good mix. Hell, credit and just about everybody isn’t a really good idea, but we jump in anyway.

What’s the problem you ask? Try this statistic out : “84 percent of college students have at least one credit card, with their average balances totaling more than $3,000″ – reports The Cavalier Daily. How did they get these cards into the hands of most college students? By giving away free stuff (like tshirts & pizza), which is always a honeypot for a student.

The Credit CARD act :

“prevents people below the age of 21 from getting credit cards without proof of a stable income or an employed co-signer 21 years-old or older” – New University, Obama Creates Credit Card Regulations, Affecting Students

Back to the story – who is the expert? Mellody Hobson of Ariel Capital Management. According to this Forbes profile she is a director at Dreamworks, Estee Lauder, Starbucks as well as being the work at investment management firm Ariel.

Mellody Hobson

From her perspective, I can imagine she meets many people of above average financial intelligence. For those who can responsibly use credit to build a good credit score it may be sensible to start on credit as early as sixteen years old.

For the rest of us, which means you and I, my feeling is that we are better off without the temptation. Read
this article on the cost of weddings from Ramit’s I will teach you to be rich blog, it is a great read on how we really are likely to be part of the majority who do not have our finances in order. In this case, remember, fully 84% of college students are carrying an average balance of $3,000 on their cards. Are you certain your 16 year old will be able to stay so far under that average three thousand dollar debt load?

As a parent I feel the urge to ‘do something’ to help my kids along. Fortunately mine are not near 16 yet, so the credit card isn’t an issue. What would I do instead? Perhaps along the lines of the ‘Bank of Dad’ (where you create your own high interest bank at home on a spreadsheet to encourage savings) but allowing the kids to borrow money at punishing interest rates. In this way they can experience how fast the debt can spiral out of control without ‘real world’ consequences of starting adult life with a maxed out credit card. The book The First National Bank of Dad: The Best Way to Teach Kids About Money is available at Amazon.

Credit cards for kids? Just say “No!”

The official description : “hour long television special hosted by Al Roker, Deborah Roberts and Elmo, with financial expert, Jean Chatzky, and clinical psychologist, Joshua Coleman, to help families with children, ages two to eight, experiencing difficult economic challenges.”

Sesame Street: Families Stand Together

As I commented over on Lifehacker Australia – “Deploy the Muppets” indeed! It really is very important to talk to kids about these situations – keeping them in the dark isn’t really possible (they’re kinda smart better to have an open and frank discussion about your financial situation. This video looks to be a brilliant ice-breaker to get the talk happening in your home. Way to go Children’s Television Workshop.