Help Your Children Manage Finances in a Bad Economy Teach them Financial Literacy Early

By: John Davis

US has been facing its worst recession for the past few months. This should be treated as a reminder to all parents who are concerned about their child's financial security in the years to come. Financial literacy should be taught to young adults by their parents. In fact making it a part of the school syllabus with all the nuances of financial management included would do well when they have to start college.

A steep 46% increase in the average amount of debt taken by college students has been recorded in the last 5 years only. This shows that more number of college students are relying on their credit cards instead of their parents or other sources of income, in the last few years.

The primary reason for this sudden steep rise is due to the possession of four or more credit cards by a student. This leaves them with a huge $7000 balance by the end of their college year. The pity is that one-third of students rarely or never discussed credit card issues or usage with parents and do not care to learn to the nuances of using one.

The new Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009, should mark a new turning point for American consumers, especially young people at universities. The act is primarily aimed at protecting college students and young adults, through the inclusion of a requirement that states that card issuers and universities disclose agreements with respect to the marketing or distribution of credit cards to students.

While the new Act can work in favor of those with huge debts, financial literacy is the key to make a universal impact on todays youngsters. It is important for young adults to learn how to build their credit without actually having a credit card. There are online personal money management softwarewhich is very simple to understand and use.

Budget planning softwarecan be used from early college days. This will help students to save and use the same finances to pay for their own education as well. Online tools provide young adults with features that will help them to visualize their earning and spending pattern; set realistic budget goals and also stick to the budget always. Personal money management sites also provide mobile alerts on purchases and monthly balances.

Article Source: http://yourfinance.co.za

About The Author
Financial literacy relating to investments and wealth building is a must for young adults. Opting to use online financial tools like personal money management softwareor personal budget calculator can make sorting of financial matters simpler and faster.