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!”

Our North American friends have just celebrated (or survived!) another Thanksgiving holiday. This is one tradition from that part of the world that we could all take to heart.

Why is this idea so important? Why talk about it here on the Golden Goose? (Aside from making the Goose nervous in case this is the year someone decides to switch from turkey!)

This is what I think. When you live your life with this so called “Attitude of Gratitude” it means that you take a moment, from time to time, to really appreciate what you already have.

That can be hard to do, especially at this time of year with a tidal wave of retail catalogues pouring in the door. It is all too easy to get lost in a mindset of “I’ll be happy when I get a new [gadget, pair of shoes, car, TV or whatever else.] Very quickly that path leads to being envious of people around you who have those things themselves. That is a dangerous path indeed, doomed to end in resentment at the world for not giving you ‘what you deserve’. That is not the sort of person anyone wants to be around!

Developing that habit of feeling thankful for what is around you, be it family, friends, a roof over your head or a flower in full bloom, is a wonderful antidote to the ‘by more stuff’ pressure of the Christmas season.

A couple of years ago my brother in-law started a tradition at the Christmas table. He asks each person to take a moment and share what they have been thankful for in the past year. At first it was a little awkward and most definitely strange, but we settled in to the idea fairly quickly. I’m looking forward to it this year, though I haven’t a good idea of what I’ll say just yet.

Almost certainly kids around you are working hard putting the pressure on for what they want for Christmas. Our certainly are. Twilight. Barbie. Transformers. PS3. Wii. The list never seems to end. How do you combat the hundreds and thousands of advertising messages that children will be exposed to in the next few weeks?

That is where the gratitude attitude comes in. It is never too late to take some time with your kids to find a few things to be really thankful for. In the process you may even find a few things that could be passed on to goodwill and make someone else’s Christmas more happy.

One way to help put kids in a good frame of mind to realise how well-off they are is to look around the world at how little most people have. A great book that explains this (and plenty more) is If the World Were a Village – which presents the whole world as a village of just 100 people.

When you feel thankful for being alive, having people around you to love and be loved by, your mood takes an immediate lift. Share this with those around you!