Jorri's 18th Birthday - The Financial Launch/Teaching Your kids about how Money and Credit Works

Dear Jorri,

Your dad and I have been wracking our brains trying to come up with a gift to give you for your 18^th Birthday, after all, this is a big one!! The most important thing you want to give your children is a solid foundation from which to fly. We believe you have a very solid foundation!!  Your mom and Dale and your Dad and I could not love you more. Oh, if love were enough.

Turning 18 changes everything!! You are now an adult and get to be completely responsible for your decisions. You can sign legal contracts (buy a car, house, sign a lease, take out a loan) and vote, you can decide to get married or go to school – The world is truly your oyster. Whatever you would like your life to be, you are now in charge of making it so. Make sure you make your decisions very carefully because from here on out, they are your decisions. The consequences good and bad are yours alone.

Your Dad and I have found that having a good relationship with Money is one of the most important relationships you can cultivate.” Being good with money” can make the difference between a happy life and a stressed out life. It can give you the freedom to pursue your dreams or hold you hostage inside a life that is less than you had hoped for.  Making conscience, deliberate choices about money, is the biggest gift you will ever give yourself.

There are 3 important factors when thinking about Money and we hope you will adopt these going forward:

1. Your Credit Score is one of the Most Valuable things you will ever have!!! You score is determined by several items:
   1. Percentage of Credit Used: For Example if you have a credit card worth $1,000.00 your score will go down if you owe 900.00 on it. But if you always keep the balance below 50% In this instance 500.00 –and you always pay the bill on time. You will keep your credit score healthy and happy.
   2. Don’t let stores, people, or online vendors check your credit on a whim: Now that you are 18 years old, checkers at JC Penny or TJ Maxx will say something like – “Would you like to put this on your TJ Maxx card?” – They are essentially selling you a credit card that is welcome only at that store. You don’t want one of those. If you have a credit card you want it to be welcome at all stores. Just politely say no – because the more you check your credit, and the more credit cards you have the lower your credit score will be. When you check your credit score – Do it because you a making a deliberate choice.
   3. Pay your bills on time and pay more than the minimum amount!! When you get the bill pay it on your next paycheck. And make sure if the bill is from a credit card that you pay more than the minimum amount. Even if that is only 10.00 more. That will drastically cut down on the amount of interest you pay, and will allow you to pay it off quicker. As in, years quicker!!!
   4. Don’t put your name on a phone /cable /power/gas bill when you have roommates!!! This is very important!! The roommates will think they are going to pay you back, or they will intend to pay you back but 95% of the time – Something will happen in their lives and they will be unable to – and you will be stuck with the bill. I have never in the last 27 years of my life seen this principal fail.
   5. Monitor Your Credit Weekly: This will tell you if someone is putting things on your credit without your knowledge. There is a free site called www.creditKarma.com – The day you are 18 go and sign up on that site and log in once a week to make sure nothing is happening without your knowledge.
   6. The Point System!!!! Never get a credit card that doesn’t have a rewards program. If you are going to spend the money, and pay the payments, you might as well get the travel benefits!!!
   7. Never borrow/spend more than 25% of your income. (With the exception of a house- which you can go to 42%) No one likes to be a slave to payments every month. If you have a net paycheck of 1,000.00 a month – Then no more than 250.00 of it should have to be spent making payments!! 
   8. You should try to have a credit score of 750 or above. This is called “A” credit and will save you literally millions of dollars over a lifetime.
   9. Never close a credit card – even if you have “Finally” paid it off. When you close a credit account it hurts your credit score too.
2.  Never put your dreams on hold because of Money!!! The Universe/God, Whatever you want to call it, is really great about supporting your dreams once you have set your intention and start to work on it. Setting your intention means that you are single minded in your goal, regardless of the cost. It is easy to make sacrifices of new clothes, or movies etc., when you are working towards a dream. Whether that dream is a trip to Broadway, or a country you have never been before, or a car that you have had an eye on – focusing on the dream makes prioritizing what you spend your money on easier than just saving to save.
    
   You have already had a very specific manifestation of this principle in your life. When you needed to come up with spending money for your European trip – How quickly did your magic work? How quickly did God/Universe answer your prayers? This is how it works for everything!!
    
3. Be Charitable!! Make it a priority!! Make it a conscious choice to pay it forward!! Especially when YOU feel you don’t have enough. This is the principle of scarcity. When you act like there are only enough resources for you to barely scrap by, there will only be enough resources for you to barely scrap by. When your heart comes from a place of “there will always be enough for me, so I can be enough for someone else today” - The same is true; there will always be enough for you. Think of it as Faith.  
    
   I know that more than likely you will spend your life paying tithing at church. This isn’t enough!! Enough is paying for the car in back of you at the drive thru, enough is giving a few bucks to a homeless person on the street (regardless of what they use that money for), enough is taking a moment to donate blood, or serve homeless people at the shelter – I hope you live your life feeling like you are never doing enough!! And here is a secret, the more you give, the more you will get back. I promise – it works for us every time!!
    
   Now getting back to what your Dad and I would like to give you for your birthday. We would like to give you a head start on the whole money thing (We did this for your older siblings as well). We are giving you, your first ever credit card – a Marriott to be exact.  See, we follow the rules too!  This will do great things for you. It will establish a pattern of timely payments on your credit report, it will say to the world. Jorri is an awesome adult! She can be trusted!! And that will be true because we trust you!!
    
   Here are our expectations for your use of this card:
    

1. You are on a strict budget of $125.00 a month. That means you can spend up to 125.00 a month – no questions asked. We will pay the bill – You will have the benefits on your credit. This amount does not roll over month to month. The only way you can go over this budget is, if you have prior approval from me or your Dad.
2. You will not apply for any additional credit cards without prior approval from us. This means when you start to get advertisements in the mail saying you have” been approved” for this or for that – You just throw them in the trash where they belong.
3. Upon graduation from high school. You can continue to use the card but you must have a job that gives you a minimum of 15 hours a week, no later than July 1, 2015
4. You will not use the card to act as security (hotel, rental car, etc.) for anyone else but you!! And we should generally know about those things in advance.
5. Never let anyone borrow the card, or charge something on the card in which they said they would “pay you right back” This card is only for you!
6. At some point when you are 19 years old we will help you get your own card. One you will be totally responsible for paying all on your own. At that time we will take possession of this card back. But we will not remove your name, so you will continue to get the benefits. This will continue until 1 of 2 things occurs; you get married or you graduate from college.
   7 – Failure to follow the rules will result in us taking back the card.
    

Last but not least. Please, Please, Please don’t hesitate to come to us with questions or concerns about money!! Don’t be embarrassed or feel stupid – Your dad and I have made all sorts of mistakes with money; we learned the hard lessons and got bruised and broken by life in this arena - So chances are if you come to us, we can make sure you don’t have to learn the hard lessons too!!

We love you so much Jorri and know that you will make an excellent adult!! Our hope for you is that you dream as big as you can, make those dreams come true, and then come up with even bigger ones!!! You are talented, smart, beautiful and have every gift you could possibly need to live a truly amazing life. What you do with it now is completely up to you!!

Love – Jenn and Dad