I asked my 17-year-old niece about an envelope in her name on the table.
The logo for a big-name bank was crystal clear in the upper left corner.
A bank that has added significantly to many junk mail piles and certainly does not need my unpaid publicity.
“Crap, they’re already sucking you in?”
A shock of dread jolted through me while I visualized this bank getting its greedy hands all over her (and her credit) before she even sniffed adulthood.
Aren’t their laws about this?
Am I just wishing there were?
Why don’t I know the answer to this?
“No, Uncle Rich, it’s just a statement from the prepaid card I use so (her employer) can pay me through direct deposit.”
My pulse normalized as I realized they weren’t trying to crush her financially before she could get her life started—not yet.
“But can you tell me what debit cards and credit cards even mean? How do they work? They’ll never teach me in school, and I need to learn about this.” Just like that, my heart rate shot right back up. I could feel my mind spinning, “Sh*t. We are about to have this talk. The birds and the bees would’ve been a hell of a lot less awkward.”
Credit and finances might be what I feel is the most fraudulent teaching for anyone, ever. All I could think of was my own childhood, how nobody ever taught me any of this, and how it never dawned on me to ask. The pile of expensive, embarrassing mistakes resulting from not knowing any better. Errors compounded by avoidance, itself driven by fear and shame. A financial hot mess that took years to clean up.
I was forced to not only revisit but discuss the dark side of my college experience, a self-sabotaging blend of impulsivity and naïveté.
Zero thought had been given to all those credit cards I signed up for on-campus.
The free T-shirts offered for applying were pretty awesome, but it was the illusion of “free money” that enticed me to say yes to things my work-study paycheck alone couldn’t.
A candy apple red Fender Stratocaster electric guitar that I barely learned to play. That black and gold Boston Bruins hockey jersey with (my favorite player) Cam Neely’s name and number that I might have worn five times. There were many other interesting decisions, most of which I can’t remember today.
What I foolishly overlooked was the looming nightmare awaiting me when it became time to pay up, and the due dates came and went. The confusion as the sky-high interest grew into a mountain of debt higher than the minimum payment, which eventually mutated into a monster I couldn’t control.
The fun at the moment wasn’t worth the repercussions stemming from my inability to square up my responsibility. Shame rotted me out from the inside while I watched my roommates become experts at lying to bill collectors when the stacks of “past due” letters piled up on the desk.
The kicker was when the threatening voicemail messages became sprinkled with terrified inquiries from my mother because she started getting calls too.
It took the bulk of my 20s to dig out of the holes I created for myself in college. That was my financial education, the result of zero credit knowledge and young, foolish desires.
I felt that shame welling up inside (even in the moment) as I was teaching my niece what I knew about how this credit stuff worked. I was honest in sharing with her my blunders. I allowed it to be okay if it made me look like an idiot in the process. If it helped guide her to making the sound, responsible decisions that I couldn’t, then my experience will have at least led to one positive result.
When we were finished, she understood the difference between her debit card and a credit card. She comprehended how each use of a credit card is essentially a loan. We discussed interest and how, despite the temptation, simply paying the minimum only creates problems later. I explained to her (as best I could) about the mechanics of a credit score, at least enough for her to grasp some basics.
She also received a somewhat long-winded lesson about the importance of keeping a “buffer” in her accounts, and to never take overdraft, ever. All it takes is for one automatic payment to be pulled a day early or accidentally drawn twice for all kinds of financial nightmares to escalate out of control.
Finally, I left her with some advice.
Never agree to any arrangements (loans, credit cards, rent, anything) unless she is 100 percent clear about what she is signing and the expectations of everyone involved. Relentlessly ask questions, no matter how annoyed everyone else in the room is getting.
Ask someone on the outside for help if she senses she may be over her head. Most importantly, walk away if her questions aren’t answered, if she isn’t comfortable with the answers, or if her knowledge or intuition tells her at any point this is a bad idea.
She was appreciative of our conversation because now she had some knowledge about how credit worked that she could understand. I’m grateful she asked me to explain some of this because I’m not sure how many kids her age, only a year away from starting college or some other “adult world” journey, would be willing to ask.
Even with that relief, I wish I felt more confident in what I taught her. I know what I know, which even with my experiences really isn’t much. Providing her a little bit of awareness is a good start.
Our children require some education about credit and finances before they are forced to learn the same hard lessons as many of us. Knowledge inspires empowered choices. Instead of another dream-killing chain to debt, they could be free to explore the possibilities that life can provide.
This experience is being shared with the hope it may benefit someone similarly insecure about discussing finances.
Wherever we are, we can offer our children important lessons.
Even if they are taught from the vulnerable space of sharing what not to do, they are still valuable and may change a young life.