7 Ways Parents Can Help Children Escape Debt

12/16/2013 03:42 pm ET | Updated Feb 15, 2014
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Like most people, I wasn't born with a silver or gold spoon in my mouth. And I didn't get everything I wanted with a "snap of my fingers." In fact, it was Christmas 1979 that my dad was laid off from his job in the auto industry. He was laid off for seven and half years! Can you imagine having a parent out of full-time work for seven and a half years? To say that it was hell on earth would be an understatement.

I saw my parents struggle, scrimp and save to make ends meet. Thank goodness for family because they helped us out by helping my dad find work. It wasn't easy for him to accept help because he was raised with the idea that it's the man's job to take care of his family. You can imagine how he felt when my mom got a part-time job, which led to a full-time position. We needed the health care benefits and she did what she had to do for her family.


My dad finally got back to work in the late 1980s and my parents saved like mad. After some time, they were able to pay off a $10,000.00 credit card debt. My sister and I were told that if we wanted anything, we'd have to earn it. So we did. I got a babysitting job and when I turned 16, I got a part-time job with a retailer. I didn't mind. Why? Because the money I earned was mine; I could do whatever I wanted with it, including depositing a $100.00 each month into a savings account.

I'm fortunate enough to have parents who taught me to be independent, self-sufficient and self-reliant. Most importantly, they taught me how to budget and save money. Parents, here are seven ways you can help your children escape debt now and in the future.

7 Ways Parents Can Help Children Escape Debt

1. Do not give children everything they want.

Whenever your children cry and scream that they want the latest toy, resist the temptation to give into them. Let them have their temper tantrum because they'll get over it. Chances are: your kids may have enough toys to fill a store. Instead, show them how giving away some of their toys will make other children happy. Plus, it will open up space to bring in the new. Who's to say that grandma and grandpa won't buy them the toy they want for their birthday?

2. Set up financial piggy banks.

Set up several piggy banks and show your children the joy of saving. For example, you can have a piggy bank for education, giving, fun and so forth. Take your spare change and drop it into the piggy banks. Laugh and smile when you do. Not only will your children mimic what you do, but they'll see how fun it is to drop coins and dollar bills into piggy banks. And they'll have a great start to building a solid financial future.

3. Open a savings account.

After you have your baby, set up a savings account. This way you can deposit money your children receive for their birthdays, holidays or whatever occasion they receive money. When your children get older, you can show them how to fill out a deposit slip, go to the bank together and deposit the money. Developing a habit of saving will serve your children now and in the future.

4. Teach children the difference between a want and a need.

Learning the difference between a want and a need is important. For example, you may want a new pair of shoes that cost $250.00, but do you need another pair of shoes? The answer may be, "no." While there's nothing wrong with buying yourself a special treat now and again, just buying for the sake of buying or to fill a void isn't a good idea. Set your children up for success by teaching them the difference between a want and a need.

5. Teach children how to master money.

Have you ever heard read the poem "Invictus" by William Ernest Henley? The last part of the poem is "I am the master of my fate: I am the captain of my soul." Teach your children to master money. How? By showing them how to cultivate a wealthy mindset vs. poverty. For example, whenever you spend money, say, "There's more where that came from." It's important to pay attention to the words you speak because words are powerful, especially when you put feeling behind them. Teach your children that they can master money and have it work for them.

6. Show children how to live within their means.

Living within your means is better than living beyond your means and racking up credit card debt. So... be honest with your children about what it takes to run a household. For example, if you have teenagers show them how much you spend on food and utilities. Show them how much you pay for homeowners/renters insurance and other expenses. The point isn't to scare your kids, but to give them a reality check. Once they grow up, they too will have bills and responsibilities. And if they want to live a certain lifestyle, they'll have to earn a good living to pay for it. And even if they do earn a good salary, living within their means will save and give them more money.

7. Encourage children to be entrepreneurial.

Today, many children start businesses with the help of mom and dad. Teach your kids that even if they work a full-time job, they could start a side business that will generate extra income each month. The additional income could be invested and/or put back into the business to grow it. Even if your kids are super young, it's never too early to encourage them to be all they can be. And this includes being entrepreneurial.

Every parent wants the best for their children. Show your kids how to escape debt, now. Kids are like sponges and absorb information at a fast pace. Why not teach them the importance of being debt free and giving them the tools do so?

If you don't want your kids to have mountains of debt, speak with them about money management and the importance of mastering money.

Being debt free is possible for your children now and in the future.

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