When it comes to handling money, most teens have very little experience. Parents can’t protect them forever from making mistakes, but teaching them about the pitfalls of bad credit can keep them from getting ensnared in a financial trap. There are several important tips a parent should pass along to their teen children about gaining good credit. Teens can be especially susceptible to impulse buys. Talking to them early about the importance of money management can help them make good financial decisions later in life.

• Earning – Simply handing money over to a teen child will teach them nothing about the value of currency. Once they are old enough, encourage them to seek a part-time or summer job. Select a few expenses, such as gas or evenings out with friends that they will be responsible to pay for themselves. Bailing them out periodically might be okay, but if they are consistently coming up short it could be time to have a refresher talk. If this behavior isn’t nipped in the bud, it could lead to overspending problems later resulting in a dependence on using credit.
• Create a budget – There are few things that can help anyone, especially a teenager, learn more about the flow of money than a budget. Budgets can be helpful while planning for long- and short-term goals. It might be helpful to share the family budget with the teen and sit them down and explain the process of monitoring income, paying monthly bills and deciding what “extras” can be afforded from time to time. Not only will they learn to budget their money, they will begin to learn about some of the sacrifices their parents have made for them.
• Differences in credit – Teach the teenager about the difference between good credit and bad credit decisions. Good credit is used to make a purchase that is a good investment, such as a new home, a college education or perhaps starting a business. Bad credit usually includes purchases made with a credit card. Explain how interest rates work and what ways they can impact finances.
• Establish good credit – While using credit cards is best avoided if possible, establishing a good credit rating can help a teen. Since they are unlikely to have much experience using a card, and should not be left on their own to develop their credit rating, a parent can help them out by securing a card in their name. Don’t give them access to it, but making a small monthly purchase and then paying it off immediately will give them a leg up on others their age.

Teaching teens about good credit isn’t exactly high up on the list of big talks to have with children but it’s a discussion that needs to be had sooner rather than later. They might not like it now, but they’ll be glad later in life when they’re not mired in debt.

This is a guest post from Katherine Watkins, who thinks teens should learn about managing their finances as soon as they are old enough to start earning money. Katherine writes for a website that provides information on HELOC loans and offers some useful home equity loan calculators for homeowners looking to borrow money.

Emergencies or financial problems can come up in one’s life at anytime. Since these problems are uninvited and unexpected, people do not plan for them and they are therefore caught short of cash. Hence, they do not have immediate funds to deal with a wide number of different circumstances such as unforeseen car repairs, medical expenses, home repairs, bills, etc. That is where emergency money loans come in handy.

An emergency loan, as the name implies, is taken by people for a short span of time to meet any emergencies and is generally repaid within a few weeks. Since there is little or no paper work associated with emergency loans, they are easy to apply for and can be obtained the same day the borrower applies for them. This makes these loans a great source of financing during times of crisis. Hence, for urgent situations, an emergency loan is the best option for satisfying one’s need for immediate cash.

To qualify for an emergency money loan, one must be a citizen of Australia and be over the age of eighteen, has to be employed at the current job for at least six months while earning a minimum of $1000 per month. The best part of emergency loans is that money can be procured within no time without any collateral. The emergency loan application is online, which enables you to access the emergency loans quickly, easily and without any hassles.

There are many lenders in the market ready to finance loans on any day at anytime. Once an approval is accomplished, the money will be deposited directly into the borrower’s bank account or delivered by means of a certified check. Thus, an emergency money loan can be received by the borrower without stepping out of the house. Then you are able to use this loan amount to cover any of your immediate expenses.

On your subsequent payday, the emergency payday loan lender interest, the emergency loan amount and the broker fee is automatically deducted from the borrower’s account and the emergency loan deal is complete. Using the short term application form, it is actually quite easy to apply for emergency loans. The loan amount can differ but will not be more than the amount of money the borrower makes from his next paycheck.

However, the drawback to an emergency loan is that the fees or the interest rates will be higher than the regular loan to some extent. Therefore, it should be taken only in real emergencies.

With economic times as tough as they are, the last thing you want is bad credit – especially as a student. In order to graduate debt free or at least with manageable loans, it is essential to establish good credit from day one.

I know first-hand the negative effects of having bad credit. During my college years I found myself in some financial trouble. Lured by unscrupulous credit card companies, I took out multiple cards to cover tuition and living costs. Even with my Post 9/11 GI Bill benefits helping cover the cost of my tuition, at one point I got so far behind on bills that I considered borrowing money from my folks, taking out a car title loan, and even dropping out of school all together.

Fortunately, I was able to get out of overwhelming debt by making changes to my lifestyle. I was lucky enough to realize the problem and put changes in place to avoid becoming mired in overwhelming debt, but not everyone has the same opportunities. Before you find yourself facing similar problems, make sure to read a little further to see if you’re making some of the same bad decisions that I was!

Here are my top 5 tips for avoiding bad credit:

1. Avoid Taking Out Too Many Cards
I know from experience how alluring it is to take out as many credit cards as possible. Student living can be pretty expensive and having easy access to credit is a convenient appeal. But in the long run, you and your credit score will suffer if you aren’t extremely careful.

It can become very difficult to juggle payments on more than one card and the more cards you have, the more likely you are to overspend. Try keeping only a single card even though it may seem tough, because in the long run it will help you avoid serious economic repercussions.

2. Create A Budget
Each month, create a budget for all of your living and educational needs. This is a simple suggestion, but planning your expenditures can help you create a more realistic picture of how much you should put on your credit card each month. It can also prevent you from overspending and help you to recognize and cut out unnecessary costs.

3. Contact Your Creditors or Loaners
If you are in a really bad situation and can’t cover your minimum credit card or loan payments – directly contact your creditors or loan company. Explain your economic position and estimate when you will be able to start making payments again.

Some companies will offer to put your payments or loans temporarily on hold, allowing you to have some breather time to start saving some money for repayments. Or, alternatively, they may help you form a repayment plan which can help you repay your debts in easier installments.

4. Try Not To Max Out Your Card
Although it is very tempting to max out your card, the consequences can be very unpleasant. If you can’t pay off immediate payments, your card will likely be cancelled – which is never good for your credit score. Unless you are absolutely certain you can pay off your maxed card within the next month – avoid maxing out your card at all costs.

5  Never Ignore Your Statements
I know how overwhelming credit card statements can be. It is very easy to simply put them in a drawer and ignore them for a couple of months. However, this will only lead to higher interest and ultimately much more debt. Even if you can only make the minimum payment that month, aim to pay that off and you will be thankful in the long run.

In today’s society, there are few students who don’t have to rely on credit cards to get them through the day, but it’s important to use them wisely. Avoid racking up huge debts and permanently damaging your credit score by following these five simple tips.

If you suffer from an overextended budget and exorbitant debt, you may be ready to put debt to death. Once you rid yourself of the endless payments and high interest rates for good, you’ll never want to go back. Debt is sometimes accumulated over time with must-haves and perceived emergencies while at other times, debt is a result of a true emergency or life altering event. Regardless of the reason, it’s time to put debt out of your life and begin enjoying financial freedom. Debt consolidation loans are designed to tackle debt head on and truly put debt to death.

Up until now, you may have ignored your bank balance, your credit card bills or loan payments. Ignorance is not bliss, however, when it comes to your finances. To truly manage and eliminate your debt for good, you need to understand your financial picture. You need to acknowledge your spending trends and make lifestyle changes that will put you on the path to a debt free future. Debt consolidation loans can filter multiple payments into one, smaller interest loan.

First and foremost, you need to create a budget. A budget is the cornerstone to fiscal responsibility. Begin by listing your fixed expenses and your discretionary expenses. Give every dollar a name, whether it’s “mortgage” or “savings” or “groceries”. If you don’t have any idea how much you spend in some of those areas, track them for a month and then begin your budget. You may be surprised at how much you spend in some areas. Once you put pen to paper, you can identify areas to cut back.

After establishing a budget, you will be well on your way to understanding and taking control of your finances. Next up is to list all of your debts – again, you may be surprised at how much consumer debt and outstanding loans you may have. Write it all down. A debt consolidation loan can combine your debts, helping you stay on track with one easy payment, rather than payment after payment each month.

It’s been said that unless you have debt, you never have the satisfaction of making that last payment on something. While there is no feeling like a “paid in full” feeling, there are certainly other things in life to give you satisfaction. Choosing a debt consolidation loan can get you started in the right direction and simplify your debts.

This fall, thousands of students will be entering college for the first time, and many of them will be living on their own for their first time in their lives. For years, this age group has been a prime target for credit card companies looking for lifelong customers of their products. College campuses are full of credit card company booths enticing new freshmen to sign up for plastic. Many college students understand that in order to build credit history they must have some sort of credit whether it be credit cards, school loans, or car loans. But whether they are sincere in their efforts or just want a piece of plastic that gives them “free” money at the time and worry about paying it later, many students are getting themselves in trouble. Learn from these following mistakes before you have a big mess to fix and everything from car insurance rates to future home loans will cost you a considerable amount of money due to your bad credit history.

Fortunately for young consumers, the Credit CARD Act which went into effect of February 22, 2010 has banned some of the worst practices of these companies. There are still many way s for college students to get in trouble with credit cards, however. College students need to take precautions so that they don’t end up in trouble with credit cards. Students need to compare credit cards online so that they can find what card fits them best. These are five of the most common mistakes made by college students with credit cards.

Mistakes Made When Signing Up for a Card

1. Signing up for a discount (or free food). A lot of credit card companies offer some sort of incentive for signing up for their credit card. While many of these giveaways were banned from being on-campus by the Credit CARD Act, credit card companies can still solicit students through the mail, online, and via phone. Even if you avoid offers of free t-shirts and airline miles, many students will apply for a retail credit card to get a small (usually 15%) discount. Unfortunately, store credit cards carry some of the highest interest rates (usually between 21 and 25%). If you don’t pay the balance in full on the card, the interest can easily use up any savings you might have seen from a store discount.

2. Falling for “interest-free” financing. A lot of cards offer an introductory period in which no interest accumulates on an outstanding balance, sometimes for 12 months or more. Many college students get these cards planning to charge expenses during the school year, then use their summer employment or expected financial aid to pay off their balance. Unfortunately, there are two main pitfalls to this plan. The first is that if you are unable to find a job or your financial aid hits a snag, you still owe the money you already spent. The second is that the credit card company makes this offer in the hopes that you will forget to pay the bill one month (or pay late) or forget when the interest free offer is set to expire.

Mistakes Made After You Start Charging

3. Assuming you can off debt once you graduate. With the typical college graduate carrying a balance of more than $4000 on their graduation day, many students must think it’s OK to run up a balance on their cards and pay them off once they get a good job after graduation. With unemployment for new college grads hovering around 55%, however, this plan will most likely lead to defaulting on a credit card. Which leads to the next mistake . . .

4. Thinking a default doesn’t matter. Believe it or not, there are college students who purposely take out credit cards, charge expenses, then “strategically default” on the balance. Since a credit card company cannot legally garnish your future wages, and most students have no assets to protect, some students think this is a good way to get free money. This strategy will destroy your credit rating, however. Even if you’re not planning to buy a house for years after you graduate, a poor credit score can prevent you from getting a job in many industries, since many potential employers do background checks.

Helping A Friend in Need

The worst mistake of all is one that many students do try to help out someone else. If someone’s credit report has already been damaged, a credit card company can require them to have a cosigner. If you don’t understand what this means, you may agree to co-sign for someone you barely know (or even know really well). That one signature can lead to your credit histories being tied together for years. Which leads to the biggest mistake you can make:

5. Co-signing or “sponsoring” a friend. A cosigner is responsible for the debt if the borrower cannot pay. This is the main reason so many financial advisors and counselors tell their clients to never co-sign on a loan. Even if the borrower has a good history of repaying loans, there is always a possibility of an event in the borrower’s life making it impossible for he or she to repay the loan. A cosigner’s credit can be affected if the borrower is late or if he or she misses payments. Even if the borrower does not default on the loan, any late or missing payments can be reported on both the credit history or the borrower and the cosigner. In the case of a missed payment, a cosigner is usually threatened with this step in order for the lender to collect a payment form someone.