Teaching Your Children about Debt Before They Go in Debt

teach children how to handle moneyAs parents, we want the best for our kids. We teach them their ABCs, how to tie their shoes, and how to handle school bullies. As they get older, we teach them the more adult skills of life such as how to drive and perhaps, how to cook and how to do laundry.

However, the one thing we may neglect to teach them is how to handle money and avoid going into debt. For many of our kids, the only way they learn about money is by watching us, and often, as parents, we are not a good example!

Before your child moves out to live on his own or goes to college, take time to teach him some financial facts.

1. If he is going to college, teach him about debt.

Debt is easy to rack up, but paying it off is a different story. Teach him how much debt he acquires while he is young through credit cards and student loans will affect his future. Use a tool like debt repayment calculator Canada to show him how much he will have to pay and for how long. Let him know how much he will have remaining for living expenses for the rest of the month after making payments on debt.

2. Teach her to manage her money.

Teach your teen how to budget. Perhaps give her money to buy her own clothes and give that to her monthly, in small increments. She will have to budget which clothes to buy, and if the money is all gone, she will just have to wait until next month.

3. Teach him to have multiple income streams.

One of the best things you can teach your child is to have multiple income streams. Perhaps he works 10 hours a week on campus but then also another 4 hours a week tutoring. He’ll get more experience and not rely on only one source of income.

If your child is older and deep in debt, let her know about debt relief agencies such as Debt.ca. Working with a debt relief company, she can escape the burden of debt and start fresh while she is still young.

Schools no longer teach our kids about finances; it is time we as parents did.

Related posts: