As unlikely as it seems, children under 18 are prime targets for identity theft. In fact, it is one of the fastest growing forms of fraud in the U.S. According to a report by CyLab, a research center at Carnegie Mellon University, 1 in 10 children had a Social Security number used by someone else before they became an adult.
Why? According to experts, children make a tempting target for identity thieves because:
Identity thieves can use the child's Social Security number or other personally identifying information to:
Who? The perpetrator can be a family member, someone known by the family or a complete stranger. A 2012 survey conducted by Javelin Strategy and Research reported that in 27 percent of the cases, someone who knew the child committed the theft.
How? As with adults, there are many ways that Social Security numbers and other personal information can get into the wrong hands:
Once the information is compromised, criminals often create a "synthetic identity" by combining the child's Social Security number with a different name, date of birth, address or other fictitious information. Fraudsters will then use the synthetic identity to get credit, open bank accounts and obtain driver's licenses and passports.
When? The likelihood is that the theft of a child's identity takes place years before it is discovered. The reason is that minors, unlike adults, typically do not check credit reports or review monthly bills. In most cases, the identity theft only comes to light when a young adult applies for a driver's license, a college loan or some other form of credit. The future effects of a child's stolen identity can be devastating. It can affect their ability to obtain:
In addition, a false criminal and medical record can be created based on the actions of the identify thief.
What can you do? According to the Federal Trade Commission (FTC), you can take the following steps to protect your child's personal information:
In addition, you need to monitor your child's credit like it's your own. EverSafe monitors your child's credit reports and other data sources and will alert you immediately if signs of identity theft are uncovered.
For more information on identity theft and children, visit https://www.consumer.ftc.gov/articles/0040-child-identity-theft
Family caregiving is often associated with the different kinds of support provided to seniors, usually by relatives or close friends. The truth is that it often involves care given to children, especially if they have special needs. About 44 million Americans provide 37 billion hours of unpaid, "informal" care each year to family members and friends with chronic illnesses or conditions that prevent them from handling daily activities.1
Caring for a child with special health care needs, whether it be a physical disability, Down Syndrome, epilepsy, aphasia, ADD, ADHD, a disorder on the autism spectrum, a learning disability or any chronic problem requiring additional support, can be stressful and exhausting. The caregiving often evolves into taking on a dual role - supporting both the child as well as aging parents. The time consumed in caregiving can compromise job performance at work, opportunities for advancement and benefits. The financial hardship is real - on average, the total annual health care expenditures for children with special health care needs were more than three times as much compared to other children.2
Financial caregivers need to determine how to cover essential services, which routinely include medical care, equipment and expensive medication. Financial planning for the caregiver's own elder care often involves the inclusion of continued financial support for an adult son or daughter with special needs. The importance of consulting with an attorney who specializes in special needs families cannot be overstated. Monitoring the financial accounts and credit reports of the special needs child, as well as any trusts that have been established, will help ensure their security even after the aging caregiver is no longer able to provide support.3
2http://www.apa.org/pi/about/publications/caregivers/faq/financial-costs.aspx citing (Newacheck & Kim, 2005)
It is extremely important for today’s children to be financially literate. “Gaining financial skills as a child provides better opportunities and makes you less likely to be taken advantage of,” says Ted Beck, president and chief executive of the National Endowment for Financial Education.
It’s almost never too early to start educating kids about finance. In an article in Forbes titled “11 Financial Words All Parents Should Teach Their Kids,” Jennifer Ryan Woods advises that you can start teaching kids about “savings” as early as 4 years old, and concepts such as budgets, loans, debt and interest at age 8. The earlier a child begins learning how to manage money, the better off they will be as adults.
While there has been a recent push to include financial education in elementary, middle and high schools, only 37 states require courses in personal finance, and the quality and duration of those classes vary widely by jurisdiction. That means it’s largely up to parents to establish the financial foundation their kids will need to succeed.
Unfortunately, many adults have difficulty discussing money with children. A recent study by the Council for Economic Education found that one-third of parents are more comfortable talking with their kids about smoking, drugs and bullying than money. In order to help children navigate an increasingly complex financial world, we have to overcome this apprehension and simply get the money conversation started at home.
There are many different methods of teaching kids about finances but most experts agree on the basics:
There are plenty of resources available to assist you in your efforts to teach your children money skills. Here are just a few: