Yesterday, I had the pleasure of talking with several elementary school children about money. On camera, I asked them to give some financial advice to grown-ups. Some of their great suggestions were don’t spend more than you earn, only eat out once a month, don’t buy things you don’t need, and don’t go over your cell phone minutes. My personal favorite piece of advice: “Don’t be a fool!”

A while back, I participated in a televised call-in show about kids and money with members of the Jump$tart Coalition. In preparation, I posed questions to a group really talented, dedicated people from organizations like Young Americans Bank, The American Institute of Certified Public Accountants, and the Financial Planning Association. The result is one heck of a resource on kids and money with topics covering budgeting, credit, cars, school/college, and jobs.

Yesterday, I covered kids and budgeting. Today, I’m going to share a some questions and answers about credit. (Disclaimer: not every answer will reflect the views of all participating organizations.)

How old do you have to be to get a credit card?
There is no specific age; however, creditors have their own policies regarding issuing credit to young adults. Most creditors will not issue a card to someone who is under the age of 18 because (in most states) they are not yet legally able to enter into a contract and cannot necessarily be held to the agreement. There are cards available to younger teens, but most require someone over the age of 18 to cosign. To learn your state’s laws, contact your local consumer protection office. To find yours, visit the Federal Citizen Information Center’s website at ConsumerAction.gov.

Can a minor have a credit history?
Yes, if someone under the age of 18 has credit and their creditor reports to the credit bureaus, it is possible for them to have a credit history. Under the FACT Act, every consumer is entitled to one free copy of each of their three credit reports each year. To access these reports, visit AnnualCreditReport.com.

Can I keep them from getting a credit card?
No, I do not know of any way to prevent them getting a credit card. That is why it is so important that you educate your teen about the proper use of credit. For information on teaching teens about money, check out the National Endowment for Financial Education’s great publication titled Simple Steps to Raising a Money-Smart Child.

Should I list my teen as an authorized user on my credit cards?
This is an individual decision. As the primary card holder, you would be 100% responsible for changes made to the card. However, because you have control over the account, it is a safe alternative to cosigning. Just be aware that your teen might not benefit from your good payment history—ask the lender if they report to the authorize user’s credit files. Many do not.

Should I cosign for a credit card?
The decision to cosign a loan for someone or not comes down to this: Are you willing to pay the debt? If you are not willing to assume totally responsibility, you should not agree to sign for the loan. Consider a debit card as an alternative. Or, if your goal is to help your teen establish credit, they could get a secured or prepaid credit card instead (see next question).

How can they establish good credit?
The most important thing they can do is to pay their bills on time and as agreed. A secured credit card would be a good, safe way to prove they can do this. With a secured card, your teen makes a deposit into a savings account with a bank to secure a line of credit. The credit card company then issues them a card and a line of credit for at least the amount of their deposit. To get a list of major banks that issue secured credit cards, visit CardTrak.com.

Why do creditors market to teens?
While we cannot speak on behalf of all creditors, it is probably safe to say that they want their future business. In fact, some studies show that students switch cards less often than the general public and they tend to remain loyal to the company that issued them their first card.

What is the difference between a debit card, credit card & secured card?
Debit cards are not actually credit cards. Debit cards are offered by financial institutions to making banking simpler. When you use a debit card, the money is automatically deducted from your bank account. On the other hand, with credit cards, issuers allow consumers to borrow money and, if they choose, repay over time. Secured credit card issuers require you to make a deposit with their institution in an amount equal to your line of credit.

Am I responsible for their debt?
If you are not “listed on” the account in any way, such as being a cosigner, then you should not be held responsible for the debt. However, it is not uncommon for young adults to need their parent’s assistance with debt problems. Therefore, credit education and open communication are very important.

What is the worst that can happen if they cannot pay their debts?
Most obviously, they can ruin their chances of obtaining future credit for the next seven years. If the creditor decided to pursue collection efforts, what is possible depends on state laws. Each state sets laws as to what, and how, a creditor can collect on a delinquent account. Some states can force you to sell some of your assets to satisfy a judgment. To learn your state’s laws, contact your local consumer protection office. To find yours, visit the Federal Citizen Information Center’s website at ConsumerAction.gov.

Of course, the earlier you start saving the better. However, I believe that some periods of life are better suited for saving than are others. The ideal time is not based on your age, but the age of your children (if you don’t have children, you are probably better rested than I am and this blog post probably won’t mean much to you).

A 2007 report by the US Department of Agriculture claims that the amount of money it takes to raise a child from birth to age 17 doesn’t fluctuate much per year. They estimate that families earning between $45,800 and $77,100 annually will spend $11,000 to $12,000 per year until age 17 for a total of $204,060. I am sure this type of information plays an important role in determining child support and foster care payments. However, as a practical family budgeter, I don’t buy it.

As all parents know, babies are expensive. Medical bills, childcare costs, time off work and baby supplies all add up. This is especially true if one spouse decides to leave their job to care for the children. Older children are also costly. Cars, college, and weddings are some of the larger ticket items you can look forward to. And this is assuming they don’t move back in with you!

Fortunately, I have discovered that there is a period of time between where the childcare costs end and the college tuition begins. This is your big chance! According to the National Association of Child Care Resource and Referral Agencies, parents of school-age children pay up to $8,600 a year for part-time care. When this ends or at least diminishes, start saving the amount you were paying in childcare into a savings account to prepare for retirement or the gobs of tuition that is looming on the horizon.

Don’t let this time pass you by or you’ll find yourself playing catch-up in your golden years.

We are so exicted to one of the sponsors for the upcoming Mom 2.0 Summit in Houston. In honor of the event, this week’s Blogging For Change posts will be by moms and for moms (& dads too)!