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Released: February 07, 2008

Tips for Teaching Teens Money Management

MANHATTAN, Kan. – The scene plays out on college campuses at the beginning of every new school year. Credit card companies line up their exhibits and offer free t-shirts to students who sign up for a credit card.

But that “free” t-shirt may prove costly, according to a family economics specialist.

Credit-card carrying students may not realize that their inability to pay for purchases can tie up future earnings and impact their borrowing power for the basics – a dependable car or deposit for an apartment needed to begin their career, said Marilyn Bischoff, Extension family economics specialist at the University of Idaho, Boise.

In 2000, Nellie Mae, lender of educational loans, found that 78 percent of students aged 18-25 applying for credit-based loans with their company had at least one credit card. Thirty-two percent of the undergraduates had four or more cards. Undergraduates carried an average balance of $2,748, and 13 percent had credit card debt between $3,000 and $7,000. Nine percent had credit card debt greater than $7,000.

Bischoff, in Manhattan for Kansas State University Research and Extension agent training sessions, offered tips for parents to help teens build money management skills:

* Take her to the family’s financial service provider with you so they can see you making deposits and withdrawals as needed.

* Help him open a checking account, possibly with a debit card. Explain how a debit card can be used in place of a check, and, for using either a check or debit card, how to record the amount of the transaction and balance the account regularly.

* Let him be responsible for account charges and overdraft or other fees.

* Encourage savings for short-term (a school trip is an example) and long-term (such as a down payment on his or her first car) goals.

* Encourage comparison shopping for purchases and major expenditures. Shopping for an auto loan or insurance also can be an eye-opening experience for teens.

* If considering a credit card, encourage reading the fine print to compare card programs and benefits, and ask for a low limit, such as $250.

And, if a teen typically runs out of money before his or her next paycheck or allowance, suggest tracking spending for a week or two to trim overspending.

More information on teaching children money management, including saving and spending skills is available by contacting any county or district K-State Research and Extension office or on its financial management Web sites  or


K-State Research and Extension is a short name for the Kansas State University Agricultural Experiment Station and Cooperative Extension Service, a program designed to generate and distribute useful knowledge for the well-being of Kansans. Supported by county, state, federal and private funds, the program has county Extension offices, experiment fields, area Extension offices and regional research centers statewide. Its headquarters is on the K-State campus, Manhattan.

Story by:
Nancy Peterson
K-State Research& Extension News

Additional Information:
Marilyn Bischoff is at