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Would You Teach Your Teenager Not to Borrow Money?

If there’s one thing that my husband and I would like to teach our children when it comes to handling money, it is this “Do not borrow money, as much as possible.” Well, they could borrow money only if it’s an emergency, like when they lost their money at school and they have no fare to go home. Another condition is that they will give back what they owe immediately.

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.

#1 Teenagers are impressionable.

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.

#2 Teenagers will not know how to handle credit cards when they get one.

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.

#3 Give them a chance to practice.

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.

#4 Don’t give them a supplementary of your credit card.

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.

#5 Don’t encourage them to get (or give them) a loan.

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.

#6 Don’t plan on getting a loan for college.

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.

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.

#7 Be honest about your financial situation.

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.

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.


Mommy Maye said…
Like you we avoid borrowing money as much as we could. Though we have credit card and use it for the convenience it brings to us because we avoid carrying cash. But I had problem lang because my son will always tell me, mommy swipe na natin. Parang he thinks buying things is just easy as you have cards. That's why I always explain to him that not all he wants, he can buy instantly. I teach him to save and don't borrow money as much as possible. Still I know he's just 6 and soon he'll have better understanding of how to properly handle money.

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