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From birth, we're raised thinking mommy and daddy know best. They have our best interests in mind when they scare away tattooed teenage boys, keep the liquor under lock and key, and set our curfews earlier than those of all our other friends. Unfortunately, when it comes to money, mommy and daddy might be leading you astray.
Financial literacy rates in the Millennial generation are abysmal. This year the Treasury Department and Department of Education tested the financial literacy of 84,000 high schoolers, who scored an average of 69 percent.
With little to no financial literacy taught in our education system, children have no choice but to learn from dear old Mom and Dad. But if Mom and Dad were never taught -- or never bothered to learn -- how to appropriately handle money, they sure aren't the ones who should be giving financial advice.
If you've ever heard your parents say, "Don't get a credit card," they were wrong.
Credit cards are one of the easiest ways to build your credit score. Granted, establishing new credit only makes up 10 percent of your score, but if you aren't paying off loans yet, it might be the only way for you to establish a line of credit. Length of credit history makes up 15 percent of your score, so the longer you've had a "healthy" history, the higher your score will typically be.
Parents are often reluctant to give their college-age children access to plastic, but if you know how to treat your card right, it'll pay off. When you graduate and start looking for an apartment, a respectable credit score is important to your landlord, while a lack of one can prevent you from signing a lease.
If you've ever heard your parents say, "Keep a monthly balance on your credit card," they were wrong.
Somehow, parents heard a rumor that keeping a monthly balance on your credit card will help your credit score. They spout some nonsense about how paying the minimum shows responsibility and increases your score.
False.
Carrying a balance does nothing to improve your score and instead costs you more money because you're accumulating interest on the balance. Instead, pay off your credit card in full each month (which means not charging more to the card than you know you can afford).
If you've ever heard your parents say, "X,Y or Z college is worth the student loan debt," they were wrong.
Read the full story: www.dailyfinance.com
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