You have a challenge as a parent to instill financial competency, but what should they know at what grade level ? As a parent, it is scary because you know many adults are having trouble maintaining credit worthiness. The good news is there are goal lines for the average fourth, eighth and twelfth grader that will tell you if your child have achieved the basic competency skills to ensure future success in managing money.
A fourth graders should know that credit is a basic financial tool. That using a credit card is borrowing money and you will pay more than if you purchased something with cash. And with credit comes trust, responsible borrowers repay as promised proving they are credit worthy and maybe able to borrow in the future.
An eighth grader should be able to compare cost and benefits especially when using credit. They should also realize that usually the longer the loan period, the smaller the payment, but the larger the debt, again because credit is involved.
Eight graders should know there are different kinds of credit sources and be aware of the functions of credit bureaus. Just like in school, debtors have a report card. But the most important lesson to get through is the consequences of their actions such as repossession and garnishment.
Twelfth graders of course should have surrounded the knowledge of a fourth and eighth grader, plus more. Twelfth graders should know of the entrapment and cost of leasing, and rent-to-own, contracts, terms and contracts. They should understand how making minimum payments increases cost, and to know credit card disclosures hold few points to their benefit. They should know there are always options, but to learn what questions to ask and understanding the differences prior to making a final decision. Also know that bankruptcy is the very last result and has serious negative consequences, plus carries a long term negativity result on credit history .
Twelfth graders are old enough to understand there are laws and regulations that offer specific protection for borrowers. And for self preservation and future growth, they really should learn what their rights are and how to effectively and efficiently exercise them.
A fourth graders should know that credit is a basic financial tool. That using a credit card is borrowing money and you will pay more than if you purchased something with cash. And with credit comes trust, responsible borrowers repay as promised proving they are credit worthy and maybe able to borrow in the future.
An eighth grader should be able to compare cost and benefits especially when using credit. They should also realize that usually the longer the loan period, the smaller the payment, but the larger the debt, again because credit is involved.
Eight graders should know there are different kinds of credit sources and be aware of the functions of credit bureaus. Just like in school, debtors have a report card. But the most important lesson to get through is the consequences of their actions such as repossession and garnishment.
Twelfth graders of course should have surrounded the knowledge of a fourth and eighth grader, plus more. Twelfth graders should know of the entrapment and cost of leasing, and rent-to-own, contracts, terms and contracts. They should understand how making minimum payments increases cost, and to know credit card disclosures hold few points to their benefit. They should know there are always options, but to learn what questions to ask and understanding the differences prior to making a final decision. Also know that bankruptcy is the very last result and has serious negative consequences, plus carries a long term negativity result on credit history .
Twelfth graders are old enough to understand there are laws and regulations that offer specific protection for borrowers. And for self preservation and future growth, they really should learn what their rights are and how to effectively and efficiently exercise them.
Spectrum Resources offers individual and family counseling in debt, credit and home ownership issues that assist in making the grade easier. Call (863-967-0660 or email: SpectrumResources@tampabay.rr.com Remember to put our blogs in your favorites:
http://moneysavingtips.polkvoice.com/ and http://spectrumresources.wordpress.com/ and this site: http://financialeducationandoptions.blogspot.com/
http://moneysavingtips.polkvoice.com/ and http://spectrumresources.wordpress.com/ and this site: http://financialeducationandoptions.blogspot.com/
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