Teach Your Kids about Money to Prevent Debt
By Drew Johnson on Monday, October 29th, 2007 :: 10:36 amCategory: Drew's Corner
The sooner you teach your kids about money, the better. Credit card debt can ruin lives, even the lives of young people with their entire financial future ahead of them. We have probably all heard the stories of the college-age students who, overwhelmed and drowning in debt, decide to end their lives.
It is tragic when someone so young, on the cusp of adulthood, is cut short by the insidious and very avoidable force of credit card debt. While the loss of young life is very tragic, so too is the devastation wreaked on those in middle-age, whose families crumble under the force of bankruptcy.
The stress of credit card debt leads many adults to the fallacious conclusion that debt consolidation will attenuate their financial burden. It won’t. In fact, it can’t. Debt consolidation simply shuffles the burden from one place to another, leaving the debtor with the same debt and the same amount of time to pay it off.
How do we really stem the tide of adulthood debt? Attack it while it’s young. If you teach your children early on about money, then they will be armed and ready to deal with the tricky and dangerous financial world that lies ahead.
Give your child an allowance. Even if it is very small – a couple of dollars per week is plenty to teach them about ins and outs of finance – you can use it to their advantage.
Tell your children about savings. Show them how putting money in a savings account will earn them more in the long term. Pay them interest on the money they put into their piggy bank.
Also, teach your children about planning ahead for their purchases. Show them how dangerous impulse buying can be. Show them how searching for the best bargain can save them money and eliminate waste.
The bottom line: Tell your kids everything about money you wish you had learned. The earlier they are prepared to deal with the precarious world of personal finance, the better.
Author Bio: Drew Johnson is an expert in the various methods of debt reduction and has successfully reduced his own debt. Read additional articles by Drew on debt management, credit management and more.
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