Nutmeg, when they ask for a loan just tell them NO. After a while they will realize that being broke is no way to live their lives. They will start thinking about how they spend their money & try to conserve it. If you really want to drive the lesson home offer them terms for the loan 10 for 20 next payday. Eventually they will get it.
One girl opened a checking account at 17, within a couple months she had overdrawn the account using her debit card, etc, had to pay probably > $100 in fees. I said I hoped you have learned a lesson, she said "I'm a loser". Then we get wrapped up in all this emotional self esteem bs. Oh vey!
Serious anecdote...buddy of mine is Pres. of a local bank. He's got 3 kids, and he's a soft touch for money. His bank is in great shape, no mtg. problems cuz he won't loan on houses, and very few commercial RE loans. They make $$ the old fashioned way, LATE FEES. But he and his wife are hurting most of the time cuz he's always spoiling his kids rotten. He's not doing them ANY favors with his example.
My wife is similar, I told her years and years ago that I won't discuss anything financial with somebody that has never kept a one month record of where every penny goes. She still has never done that so we don't discuss finances.. why bother, it will lead to nothing but strife... It's almost like traders without an edge, why discuss trading with them, it's just a psychological thingy if they don't have a definable edge...
financial education starts at very young age.... we taught our kids about value and worth - what is worth spending the money, what is not; the difference between spending (gratification now) and saving/investing (delayed, but bigger gratification later); a concept of budget. This was started as early as when they were 1-2 years old... I am still proud to this day that my girl. at age of 4, chose a laptop over a birthday party when I told her that we only have a budget for one of these 2 things, and we all know how kids at that age want to have birthday parties. Sign... only if the politicians in Washington have the discipline that my daughter has.
By giving her a laptop, you are teaching her to become a consumer of things she doesn't really need. Ie. associating rewards with material things. This is the first baby step towards her becoming a consumer of useless things and deep in debt later on in life. I'm not saying that will happen though.
this might sounds like bragging... in this particular case, the laptop was not 'useless'.... she was googling and find out about stuff from age 3... so she picked 1 thing from the 2 that she wanted... and it was a good choice.
44 percent of Chicagoans have just one month cash cushion Chicago Sun-Times July 22, 2009 In the face of rising unemployment, Chicagoans have little financial cushion if they lose their jobs, said a survey released Tuesday by Country Financial. Forty-four percent of survey respondents said they wouldn't be able to pay their bills on time if they went more than one month between jobs. That was slightly better than the 49 percent who said so nationally. Sixty-five percent of Chicago residents said they would tap their savings to cope with a shortfall in income if they lost their job. Fifteen percent said they would rely on retirement accounts, five percent said they would rely on short-term loans like credit cards, and four percent said they would rely on bank loans. Twenty-six percent of Chicagoans said it is very or somewhat likely they could lose their job in the next 90 days.
No, a loser is those who pay their bills on time and save. They will lose to inflation and to bail out those without responsibility. Not to mention, this is an excellent customer for the bank. Losers never overdraw or carry balances. They can't afford to have those deadbeats as customers.