- 21
- Nov
One of the most expensive times of year for the parents of teens is August. Back to School means arguments about the difference between a good outfit, and an in-style outfit. The difference can be £500.
Adding books, tuitions, bus passes, sports, after school events and social outings can cost more than one month’s income. Few people have enough money to cover a student’s entire list of wants and needs. This problem is compounded when a family is trying to send two or three teenagers to school at the same time.
Many students earn their own money to help cover school costs. But parents need to be aware that others apply for credit cards as a form of unsecured loan without their parent’s knowledge.
Banks actively recruit students. Many students believe this is free money, a perk. They run up the limit, and then accumulate interest for months, before parents learn of the debt.
A student can easily run up an unsecured debt of £5,000 in a matter of weeks. This debt can haunt parents for years, and ruin a student’s consumer credit information report. Parents need to inform their children about the responsibilities and risks of a credit card, before the students are forced to take out a second mortgage or debt consolidation loans to pay their children’s debt.
Back to school is a great time to teach children that fashion does not define a person. It will not make them popular, but it could put them in debt. There is no reason why a student cannot be taught about APR and interest rates, debt management on mortgages and loans, and of course responsibility.
