We all get those credit card offers in the mail. Every day, there's at least one in myt mailbox offering to sell me debt. I also get mortgage refinance offers in the mail, suggesting that I could take cash out of my house and have fun with it.
Wahoo! Years and years of payments in exchange for a few moments of fun.
I'm a big Dave Ramsey fan and I'm enough of a mathematician to understand compound interest. Credit cards and larger mortgages are just products that some financial company is trying to sell me. They want my money and they'll give me a little bit of theirs for a short time to get much more of mine.
One of the things I want my children to know when they leave the house is how to handle money. As a part of this I want them to know when and how much debt to incur. Last week I tried something new when I got a mortgage refinance letter in the mail. I shared it with the kids.
We sat down and discussed what we could do with the buckets of cash they were offering us. We discussed just how much we'd have to pay back. If I recall, on a 30 year mortgage, you pay back three times as much as you borrowed. As soon as the kids heard that, they wanted no part of the money the bank was offering. Next time I get a credit card offer in the mail, I'll share it with them as well.
The kids had no idea at all that lenders were constantly targeting us. It was an eye-opener for them that I thought I could share. For more tips on teaching your kids, visit this week's Carnival of Homeschooling.