Borrowing money is one of the reasons why people get into debt. To be able to pay that debt, people sell their possessions, home and whatever they have. What’s worse is that some people who are not able to pay their debt, lie or make false promises and even steal.
It’s one cause of stress and anxiety that I really do not ever want to deal with. I wish my family, especially my children will not experience dealing with this kind of trouble in the future.
That’s why it’s important for parents to teach their children not to borrow money. Here are some thoughts on this issue of teaching children, especially teens, not to borrow money.
Children can easily learn good or bad habits. Aside from modeling good money management habits, talk to them about money. Doing so will help them for the rest of their lives. Show them the difference between saving for items they want compared to buying them for instant gratification. Show them that every little thing matters. Material things may be fun but aren’t worth it in the long term. It’s this desire for material things that is setting you up for life-long debt.
#1 Teenagers are impressionable.
Too many teenagers are not completely aware of the pitfalls of debt. If you don’t teach them, they might be in debt even before they ever get their first real job. It’s stressful for a young person when just starting out on their own to manage money. Teaching them how to save now will help them for the rest of their life.
#2 Teenagers will not know how to handle credit cards when they get one.
Whether your teenager has a job or not, it’s important that they learn to save at an early age. This will help them learn good habits now and avoid the desire or need to borrow when they’re away from home.
#3 Give them a chance to practice.
Give them a debit card. Debit cards deduct money right from their savings account. This teaches them to budget their money and helps them establish credit.
#4 Don’t give them a supplementary of your credit card.
Getting a loan means spending money that you don’t own or don’t have yet. It’s better to encourage them to save money to buy a car than to get a loan to buy a car. Teach them the benefits and rewards of saving.
#5 Don’t encourage them to get (or give them) a loan.
First of all, teach them while they’re young that their grades and performance matters. When they have good grades, they can apply for financial aid, grants and scholarships.
#6 Don’t plan on getting a loan for college.
Even if you’re not certain whether you can afford to send your children to college, don’t start with the idea of getting a loan for college. If they know that you’re looking at college loans as the answer, they may not work as hard to get good grades or earn some money to help pay for college.
If you’ve made financial mistakes, for example, you have credit card debt, talk with your children about those mistakes and the lessons you’ve learned. Of course, you also need to follow through on your talks. Children observe what we say and what we do, and it’s important to practice what you preach.
#7 Be honest about your financial situation.
Also, if you’re in financial trouble, let your children know your situation. This can help them understand why you can’t buy this or that for them. Perhaps it would also challenge them to help save money.
Debt can cause a lifetime of trouble for your teens if you don’t teach them about it during their formative years. It’s good to start when they’re still impressionable and have the capacity to understand money. Talk about money, teach them to save, give them opportunities to manage their own money and be a good role model when it comes to debt. Your children will thank you for it.