Teens are the single biggest target for credit card companies. The reason is simple; many teens are terrible with debt. Actually, they’re great at accruing debt which makes them a credit card company’s dream.

They’ll rack up a hefty sum and then take years to pay it off, all the while paying interest to the creditor. As a parent, there are many things to teach your child. One of the most important lessons you can teach them is how to manage and stay out of debt.

When to Have “The Talk”

One of the best approaches to any difficult topic is to make it an ongoing conversation. Most people don’t learn from hearing something once. They need to hear it over and over again and people learn more effectively when it’s a conversation rather than a lecture. Ideally, if you can begin talking about money when your child is young, you can open the conversation so that when they’re teens, it’s much easier.

If your child is already a teen then it’s time to begin talking about debt. Perhaps the best way to approach that is to be honest about your thoughts, beliefs, and even your financial mistakes. Talk about saving, budgeting, and setting financial goals. Discuss the difference between credit card debt and buying a home. Talk about the benefits of a good credit score and the downsides of debt. All of these skills help prevent teens and adults from accruing debt.

Give Your Teens Tools and Resources

Teens don’t always believe what their parents have to say, and they don’t always listen. That’s why it’s important to provide them with both the tools and the resources to learn on their own. Help them open a bank account and set financial goals. For example, perhaps your child wants to travel to another country or buy a car. You can help them create a budget and plan how they’re going to save for those goals.

Additionally, consider providing them with books, magazines, and even websites like the Teen Consumer Scrapbook, http://www.atg.wa.gov/teenconsumer/, so your teen can learn on their own. Their knowledge, combined with your education and good financial example, will help them stay out of debt and make smart buying decisions.

Most people make a few financial mistakes in their lifetime. The more you can teach your child about the pitfalls of debt and how to make good financial decisions, the fewer mistakes they’ll make when they’re older and on their own.