Get Your Children in Debt to Keep Them Out of It!
| November 27th, 2007This is an interesting title isn’t it? Have you ever heard of putting your children in debt to make sure later in life they don’t fall into it? I believe that most people get into debt trouble at one point or another in their lives only to learn to live within their means. Why not teach your children that at an early age? Chances are you’ll be a lot more reasonable than Visa, Mastercard, Amex, Dinners Club etc…
You can get into debt as a child, in your teens, in university, afterwards etc… Bottom line is until you’ve bought something and gotten sick of it but still had to continue paying for it you don’t know what being in debt is like. It’s also a ball and chain that enslaves you and keeps you working. How can you even consider quitting your job and following your dreams if you have debts to pay? Until you feel the pressure of debt first hand you don’t realize how bad it feels and how much more you end up paying in the end thanks to interest.
When I was a child I used to sleep with a consumer magazine; I wanted everything! I had a short attention span and went from one item to the next. If my parents had been billionaires I would of wanted them to buy entire stores. Didn’t matter what it was I wanted it and I wanted it now.
When I was about 10 years old I bothered my parents endlessly for something that I don’t even remember. I can’t remember what it was but back then it meant the world to me. It was an overpriced gimmick made of cheap plastic; that I do remember. My father told me that he would lend me the money and I’d have to pay him back in increments. I was ecstatic; couldn’t have been any happier! Hours went by and I played and played with this gimmick; then days went by and after a week or so I had gotten completely fed up with it. It went into a pile with the rest of my belongings and just collected dust.
The difference between this discarded toy and the others was that I hadn’t even begun paying for it yet and the honeymoon was already over! I remember it took me months to pay this item back. I’d do my paper route and give over a portion each week to my father to pay for this item that I had no use for and had basically forgotten about completely. If I didn’t still have to pay for it I probably would have totally forgotten about it.
By the time I ended up paying my father back in full I had learnt an incredibly valuable lesson about debt; it’s to be avoided at all costs. Some things you have to go in debt for though such as a home or schooling if you don’t have any help from your family. Unless you strike it big early in life chances are you will have to have a mortgage. Apart from a mortgage, I’m proud to say that 17 years later I’m still debt free. I have never had a credit card balance in my entire life. Each month I religiously pay off my credit card. They charge you 18%! That’s highway robbery.
The point of this story is that everyone has to learn about debt for themselves. The sooner you learn about it the better off you are in life. Instead of learning your lesson with a $10,000 furniture and kitchen set from Leon’s for the first apartment you rent why not learn about it at age 10 for some toy that cost you $50? At the time I thought my parents were being unfair but in hindsight I can’t thank them enough.
Almost everyone I know has credit card debt for consumer products ranging from clothes, computers, golf clubs, vacations, ski passes you name it. Unfortunately they are being billed at 18% interest or higher. For lots of them unless they completely detach themselves from the physical world for a year or so I can’t imagine them ever getting out of debt. How much harder is it to save for a down payment on a home when you have 5-$20,000+ in credit card debt being charged at 18%!?
If you have children my advice to you is to get them in debt for something small and stick to your guns and make sure they learn a lesson that things do have to be paid back. If you do that once and they still want more charge interest next time; they will quickly learn their lesson and it will help them financially for the rest of their lives. I’m not saying to never give your children anything; what I’m saying is everyone has a reasonable limit. Once they’ve passed that limit make them the proposition and go from there. You’ll know when the time is right and in my mind this is one of the most important financial lessons they will ever learn. Live within your means!
I like how you think. I don’t have any children yet, but will think about details like this for the future. Will keep checking in to read your thoughts on business and finances.
This is great advice, i think it would work for most as well, debt in the past and smaller but current debt has taught me to live within my means, my parents have always lived within their means, they prefer to go without or wait till they can pay cash where possible.
Thanks for a well written post regarding this, its something that people tend to avoid talking about i find, denial i guess and it takes the buzz feeling away from their purchases, but must be faced if things begin to spiral out of control.
Thanks
John
This is a fascinating story. I think that you had a very wise father. It’s too bad that more people haven’t learned the lesson about staying out of debt.
[…] [site link] […]
I got into bad debt at the age of 17, buying my first car. My Dad refused to help me out and eventually it was repossesed and here is the kicker, I STILL had to pay for it as its auction did not cover the cost of its purchase… 17 months later having paid out 120 pounds a month for something I didn’t even have taught me my lesson.
I owe nobody anything, I don’t even possess a credit card and pay for everything cash. My only vice is a debit card for Amazon but that only allows you to spend what you put on it, it has no debt allowance. If there is not enough money on it you can’t buy anything.
I remember that I read the book Millionaire next door, it explain that all of them learn money management skill. Debt has put a lot of us who are potential for financial freedom out of reach.
Rob,
This is an excellent post. I stumbled and wrote a short review.
By the way, for some reasons your comment on my blog was recognized as spam. My sincere apology. I have de-spam and posted it.
Your comment is in this link here : http://www.seaykopitiam.com/2007/11/18/the-story-of-page-rank/
Jamy
And have a wonderful weekend.
Rob,
I also dug and wrote a review.
Jamy
I blew a huge futsy today. It drove everyone in the office out the door.
Good story about kids and money on your blog.
I think with most things, learning them the hard way is the best way especially when it comes to money matters and debt. As a child growing up we didn’t have much $$ and I learned to be responsible for paying my own way at an early age. Selling greeting cards at 13, a paper route at 15 and 16 a burger slinger at MacDonald’s. At 17 I went into the Army for 3 years.
Now I have a good paying job, no debt beside the 4 bedroom house I live in with my beautiful wife. If I would have had it easy as I was growing up and was allowed to get in debt I’m sure things would not have turned out the same.
Sometimes what your parents do by accident turned out to be a good thing especially when it comes to kids and money.
Thanks for the kind words everyone. The old trite saying is true like most old trite sayings. Sometimes you have to be cruel to be kind!
At the time it stunk and I felt so victimized but where would I be now if my first real spending spree took place on a credit card at 18!?
Thanks Dad
I found this post to be very good. I am a mother of 3 kids , 2 of them teens and one of them leaving for college next year, I worry all of the time that they will have a hard time like me and my husband and I hope they have learned from the trouble that we have had.
It is interesting. I’da never thought of anything like that. But it would be hard to do with a three yr old. xD
Jennifer - Maybe get them to read this post.
Jenny - I’m not a parent yet but I’m sure you’ll know when the right time comes. =)
P.S Thanks to everyone who has stumbled this. It’s unreal how much traffic this post has gotten from SU.
What a great idea! My oldest is only 5 but I will be storing this one away in my bag of tricks for sure.
Great Post! I’m glad I am not the only parent who thinks this way. I made sure all my kids learned about the evils of debt while they were teenagers. And so far it is working. Both of my grown daughters are very responsible with their use of credit cards and debt.
[…] over at Home Business Blogger has a great post on “Get Your Children in Debt to Keep Them Out of It”. In his post he points out the importance of parents teaching their kids about debt at an early […]
Brilliant post. My children are young, but I am going to keep this in mind when we enter the young teen years. With so many parents buying their kids cars and major things like that, I think an important oppurtunity for a lesson is missed. Thanks for sharing your story.
Purely make sense. I’m only 17 though, and not in any debt yet. Dugg the post, and if I could remember this until I have a 10 years old kid, I will make them in debt like you advised.
Interesting approach Rob. Will add this to my debt related bookmarks.
Nice way of thinking. I hate depts.
[…] If you have kids; I recommend you read this. Share and Enjoy: These icons link to social bookmarking sites where readers can share and […]
Fair Deal on Debt CIC is a non- profitable organization.We provide services as Fair deal on debt,Debt management,Debt advice,Energy efficiency,Debt counseling,Energy saving,Credit Card Debt,loan schemes,personal loan,trade credit loan scheme,consumer loan scheme,personal loan for salaried women,personal loan for real estate builder,personal loan for pensioners
I really, really, really, enjoyed this post. Seems like rather simple advice but something that is rarely if ever done these days. After a day out running errands with my toddler, I can only imagine how much worse things can get once he gets older, not only is it a valuable financial lesson, but one that is likely to teach the difference between WANTS and NEEDS. When he is able to understand this concept, I will be implementing it. Thanks!
I couldn’t agree more. My parents, though affluent, never wanted my brother and I to feel as though money was no object.
From an early age (15) we were required to get jobs and support our wants. We were never given allowances as children and anything we wanted, we had to find the money for. As kids, to raise money, we got creative, offering massages to our neighbors and running a mini-casino.
Both my brother and I went into debt to attend university. But what we learned from it was to be mindful of every dollar we spend.
Thanks for your comments Tara. It’s crazy how we learn “so much” at school but nothing on the fundamentals. Then again if everyone was “Free” where would the workforce go…
So much to read, so much wealth of good information, keep it up
While I think this is a good idea, can you imagine the emotional strain this puts on a child? Think about the mental anguish that you were put through when you had your first taste of debt’s venom. From the comments so far, many were in their late teens. They rebounded because they had the fortitude granted to them by 15+ years of life experience. Imagine how crushing it would be to a 10 year old. If everyone did this, we’d have a world of very depressed adults. I suggest waiting til their early teens before applying this tactic, or you might as well charge rent to a 5 year old.
Hi Dave,
Thanks for your comments but I have to disagree with you. This mentality of sheltering is exactly the cause of why late teens and early adults get into debt that is HARD to rebound from. Also at that age it’s possible to really rack it up. I was in debt for a few months and never since.
Society needs debt slaves and there is no worse mental anguish that I can imagine other then going to work knowing your not going anywhere except working to pay interest on items you no longer need.
I didn’t see it as them being cruel I saw it as them being honest with me and real. This is life. If you can’t pay for something you need to pay back with interest. (Dad didn’t charge interest) The sooner you realize it the sooner you go through life seeing the way it really is instead of just being another sucker who gets a credit card and spend their life paying for things they can’t even remember anymore.
I buy things I can afford. Not things that I want.
Thanks for your comment though!
Hi Rob,
Thanks for the quick response. Yes, I agree that this is a worthwhile exercise. I just wonder at what age is best to practice it. For you it was 10. Why not at 7, or 5? I am just concerned that some of your readers may implement this too early. That’s all. Keep up the good work.
Dave
Hi Dave,
Understandable.
I think the right age is when your child pushes you to the point of no return. When your child’s wants get so unlimited that they really have no clue of a dollar. That said when I was 10 I had paper routes etc. I was a little entrepreneur. Every case is different and it’s up to the parents to decide.
I will say better early than late.
You had me until you said “I have never had a credit card balance in my entire life. Each month I religiously pay off my credit card. They charge you 18%! That’s highway robbery.”
If you know they are sharks, don’t play at their game. Live within your budget on a debit or check card. It keeps me from spending money I don’t have and getting into a bind later on. I used to do what you do until a true emergency happened and then the balance started to grow. Now I have no consumer debt, no credit cards and an emergency fund savings acct. separate from checking acct.
I keep listening to the news about getting various grant applications so I have been looking around for the best site to get one. Thank you for your help!
I really liked the way they came off
[…] If you’re new here, you may want to subscribe to my RSS feed. Thanks for visiting!I was very touched by the article written by Rob of Home Biz Blogger recently titled : Get Your Children in Debt to Keep Them Out of It! […]
Hi, perhaps this posting might be off topic but anyhow, Having gone browsing around your web site and it seems extremely cool. It’s obvious you know the subject and you seem fervent about it. I’m setting up a fresh blog and I am struggling to make it look good, as well as present the best quality information. I’ve learned much visiting this web site and also I look forward to more articles and will be coming back soon. Thanks.
I like your site. I’m looking forward to more visits here. Thanks!