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    Talking With Your Teen About Sex, Drugs, and Money


    Dollars and cents may not sound like life and death, but kids find plenty of ways to mess up seriously with money. Only a quarter of teens have any clue how credit card interest works — which may explain why the average college student carries nearly $3,000 in credit card debt. And a bad credit rating can affect a kid's ability to buy a car or a house, or even to get a job.

    But too often parents don't address these issues while kids are still at home. "Many parents are insecure about their own financial knowledge, so they don't know how to frame their advice, or where to begin," says Carrie Schwab-Pomerantz, president of the Charles Schwab Foundation.

    Talking tips: To get the conversation going, start involving your teen in the family's financial life. That doesn't require revealing the nitty-gritty details of your income and debt load, but you can, for instance, let your kid see you paying bills on Saturday morning, and invite her input on budgeting decisions. Say, "Money's tight, but we might be able to go to the beach for a few days if we're careful. How could we save up a bit?" Just realizing the trade-offs involved in saving and spending is a big step toward financial savvy.

    And take advantage of the openings your kids are sure to give you. They may not be curious about the stock market, but they're very interested in what it would take to get the latest-model iPod. To teach your teen, capitalize on the power of desire, rather than just handing over the big-ticket item du jour. Sally Jo Davis of Media, PA, couldn't afford the cost — more than $2,200 — of a foreign exchange program her daughter wanted to attend in Europe this spring. "I told her we didn't have the money for that, but we would allow her to go if she got a job and paid for it herself. She stuck with it and met her goal," says Davis. "The financial lessons she learned were as great as the cultural ones."

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