Professional Window Shopper

Financial responsibility. Bleck. I figure by the time I grow up, I'll be a multi-millionaire and won't really have to worry about being financially responsible. As long as I don't go blowing it on private jets or Jimmy Choos, I should be fine.

Oh wait... I am grown up and natch, I am a financially responsible adult. And I'm not rich. But at least I'm not in debt; I'm just a professional window shopper.

Anyhow, I wasn't always financially responsible and I hope that Gigi can learn from my mistakes to ensure she doesn't spend years rebuilding her credit and exercising incredibly painful spending-restraint - like her momma.

So how am I going to go about teaching my young progeny not to f**k-up her credit rating and learn to save? *big sigh* By setting a good example and teaching her about money while she's young. Thankfully I can glean a lot from hindsight (always 20/20 that freakin' hindsight) and tell her that (Lesson One) getting a credit card before the age of 21 is NOT a good idea.

Do credit card companies even do that anymore - cold call sending out of cards to folks with good credit rating regardless of age? Probably not in this day and age, but back in the 80s the companies would send out a card with 1000 dollar limit if you had a phone in your name - which I did. And boy oh boy, I held onto that card for ages, knowing I shouldn't use it, unless it was an emergency.

What was my emergency that sent me down the road of bad credit? A weekend in Toronto with friends - shopping. Mind you, those 8-hole Doc Marten's were the cat's meow and I had the latest Gap jeans long before any of my brethren in my small town (cut me some slack, it was the 80s). BUT I should have paid off that trip right away. I didn't end up paying the trip back promptly so in the end, I paid back that trip times three. TIMES THREE! (Lesson Two) Thoroughly understand credit company interest if you use credit, and how it works, and how much it increases if you miss a payment.

Establishing good credit is key and this is what I need to teach Gigi. She needs to understand that banks, landlords, future employers, and mortgage lenders depend on this information to decide if you can get what you have applied for, and under what terms (eg. poor credit may get lower limits and higher interest rates - if any credit at all).

So how do I teach her this? Well since she is not quite three years old, most of those "reasons" to establish good credit mean diddly to her. BUT we can teach her that you can't always afford what you want, when you want it; (Lesson Three) Live within your means.

When we are shopping with Gigi and she requests something beyond a cookie, we explain that it's not in the budget. Believe it or not, she accepts this reason (for how long, I'm not sure). We have explained to her that we only spend what we earn, and we set budgets for the things we need to live. She accepts this because she knows that when we do splash out, we always include her in the bounty.

Now this method of "not in the budget" hasn't curbed her asking for random items but it sure has curbed the tantrums. And curbed tantrums can only be a good thing - that I know for a fact.

Capital One has a new tool - Moneywi$e eLearning - for managing family finances. It has many, MANY useful tips and hints on how to teach yourself and your family about managing your money and working towards your future. Thanks to the folks at Capitol One for sponsoring this really cool Blog Blast with the Parent Bloggers Network - they are offering a three cool prizes of new iPhone - check out PBN for details here.