What is Your Financial Legacy?

While I was in Nashville last month, I read a very interesting article in USA Today about Generation Y's challenges with money.  The average college student now days graduates with over $23,000 in student loan debt.  On average they have more than 3 credit cards, with 20% of them carrying balances over $10,000 (source: Fidelity Investments).  Now to some of you, this might not seem so bad, but remember, many of these kids don't have jobs to repay this debt so the parents end up picking up the slack.  


A few years ago, there was a documentary made called "Maxed Out".  If you haven't seen it I would recommend it (with the caveat that it does have some language in it so try to get an edited copy of it).  It talks about a lot of things regarding credit card debt and the problems it causes. But it also spotlights the dangers of college students' financial illiteracy when it comes credit cards.  Some of the stories (and others like them) in this documentary spawned the new credit card legislation that went through last year.  While this act is a start as far as prevention, it WILL NOT replace the need for you to educate your children about money.  If you don't teach them, who do you think will?  Would you really trust the credit card companies to teach your children about financial responsibility?  That seems like the ultimate irony.  You wouldn't want drug dealers to teach you kids about the dangers of drugs?  So why is this any different?  


Did you know the fastest growing segment of the population to declare bankruptcy is 18-24 year olds?  That's right, fresh out of college, just starting out and crushed under the weight of debt.  This is so sad because I firmly believe there are certain things a teenager should know how to do before they leave home. Things like basic cooking and laundry skills are good, but if you don't want your 30 year-old to be living in the basement make sure they have a basic understanding of personal finance.  Some of you have experienced this with your children and others of you are currently on the child end.  Teach your children to build good financial muscles, this is vital whether they are 3 or 30 (it's just a lot harder if they are 30).  Wherever you are on this spectrum, start today to make changes for the better!  This is not an easy process because it's easier in the short term to give in to their demands.  Ask yourself, what will my financial legacy be to my children and grandchildren?  Remember that true financial peace starts with financial independence.