How to Get Your Family “Credit Smart”

When you have a family to take care of, the last thing you’ll want is to see any member of that family struggling financially. This is why it’s so crucial for parents to help their children from an early age in this regard. We don’t mean that you have to keep lending them (or giving them) money – unless that’s something you are comfortable doing, of course – but we do mean that you can teach them important information about money and ensure you get your family “credit smart.” Read on to find out how to do this so that the next generation can avoid the pitfalls of debt and poor credit as much as possible. 

Start Early

The earlier you can start instilling good money habits in your children, the more they will learn and the less likely they will be to get into unmanageable debt. This is the key, of course; not all debt is bad, and sometimes it is necessary, but there will be serious issues when it spirals out of control. 

If you can start teaching your children as early as possible, they stand a much better chance of succeeding. There are some useful tips to give them, such as always paying more than the minimum amount and always paying bills on time, for example. However, real-world examples are also useful. If you have found you need to look at OneMain Financial loans for debt consolidation like those offered by OneMain Financial, go through the process with your children to give them the opportunity to learn about debt management and interest. 

Please note debt consolidation may lower your interest rate or monthly payment but be sure to consider origination fees and the length of repayment, which can offset the savings or even increase the total you pay over the life of the loan. 

Incentivize Saving

Another way to get your family “credit smart” is to incentivize saving. When children – and young adults, to some extent – get their allowance or are given money for their birthday, or even when they get their first job and have very few bills to pay with it, they tend to spend it immediately rather than save it. Although this is fun, it’s not a strong financial habit, and having a savings account is a much better idea. 

Start early and incentivize saving. You can open up an account in their name and start it off with a sum of money. Perhaps you can add a certain amount to their savings if they are able to save up in a specific amount of time. Making saving into a positive thing by showing your family what they could do if they start saving early may also help. 

Add Them As An Authorized User

If you have a credit card, it might be possible to add your family members as authorized users, and this can certainly help your family get build good credit habits. Of course, you will also need to have trust that they won’t run up your credit balances, so discussing the rules and the reasons beforehand is crucial. 

When someone is an authorized user on your credit card, their credit score will be improved, and in some cases, particularly with young adults, this is a good way to start their credit off in a positive way.