It is important to teach children about how to maintain good credit.

Help your teen to create a mock budget using a possible future income. Go over with them all of the expenses that an adult faces (rent/mortgage, credit card bills, taxes, health insurance, auto insurance, auto repairs, entertainment expenses, gasoline, etc.). Let them get a feel for how much one can afford and how to budget so you can have money left over. Share with them the strategies you use in order to manage your money.

Teach your children the urgency of keeping private information about themselves a secret. Credit card numbers, bank account numbers, social security numbers must not given out. Review with them what to do if their personal information is ever stolen.

Explain the difference between credit cards being a loan you have to pay back (usually with interest) and debit cards subtracting from your own funds. Also go over with them what to do if the card is lost or stolen.

Teach your kids how credit cards work. Most children view credit cards as free money which isn’t true so the sooner you can get them out of that mentality, the better of they will be in the future.

Review with them how the money must be paid back and how interest works. Make sure you also explain how some adults get trapped with debt by only making minimum monthly payments. Show them how different cards offer different interest rates.

Make sure you teach how to use an ATM. Also teach them how to do deposits and withdrawals in a bank branch.