Notes from a Boston Bankruptcy Attorney Before Suzie Goes off to College
Clients often ask their consumer attorney how to teach their college bound kids about credit and finance. At the intersection of when their income is low and needs are high, these enthusiastic young folks need clear instruction on how to manage their financial life. A wonderful approach to dealing with offspring and their finances is in Michael Stopler’s book, Wealth: An Owner’s Manual. The simple approach is to open a bank account which Suzie, or both of you, has access to, have her put her earnings in and you put a monthly, or quarterly, allowance in. The account can have a checking and debit card and Suzie is responsible for managing the account. Another approach is to give Suzie a credit card that you are responsible for.
Unfortunately, we see a lot of these credit card bills, one, two or 10 years later. Suzie had some problems and now the parents are in bankruptcy, partially because of these debts. If the credit card was in the parent’s name, the parent is responsible. On the other hand, this does allow Suzie to build up some credit, and for the parents to monitor the expenses and to teach responsibility from time to time.