How to Pull Your Teen Out of the Financial Hole and Avoid Debt Trap

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3258378233_46ac9b316dWhile there is nothing much you can do to reverse back time and start from when you were 18, there is a very important thing you should pay attention to; teach your kids how to manage their money right! If the financial conditions are bad right now, they can get worse by the time your kids are old enough to take up their own responsibility. It helps to get the right advice when it comes to debt consolidation and management. The demographics today indicate that kids today often need financial assistance from their parents in paying off their debts or moving out.

Therefore, it is very important to teach your kids the importance of financial management and ways to stay away from debt as much as possible.

Here are some ways you can make your kids realize how important debt management is:

1. Discuss Money with Your Kids

It is not just very important, but as a parent it is also your responsibility to teach your kids the value of money. Although every parent wants to get their kids whatever they ask for, it is very important to tell them what is affordable to you and what isn’t. Talking about money with your kids can make them aware of the financial problems that exist in the real world.

2. Teach Them Saving

From an early age, teach your kids how to save money as much as possible. Start giving them some amount of money and tell them to save from it. Much better is to provide them with a savings account from an early age so that they can learn saving methods in a systemically manner. Provide them with tips and tidbits that can help them in increasing their savings.

3. Give Them Financial Independence

Encourage your kids to become financially independent, even when they are living with you. Ask them to indulge in part time or summer jobs and save the money they earn so that it can be used in the future. Teach them to bear their own expenses from an early age.

4. Education Programs

There are several financial education programs that are offered to teach people about financial management. These programs are very helpful in teaching you and your kids how you can stay away from debt when you are earning. It helps to get the right advice when it comes to debt consolidation and money management at the right time.

5. Set a Budget

Always provide a spending budget to your kids so that they know their limits. Set up an amount you will give your kids each month as their allowance and set some conditions to this amount such as saving a sum in the end or spending towards a good cause. Teach them how to create a budget and stay on it throughout the month.

6. Set up a College Fund

In order to keep your child away from the student debt trap, set up a college fund for them right from their birth and start putting money away. You can loan this money to your kid when it’s time for them to go to college, except you can do that at friendlier credit terms. While these savings can be small for you spread over the years, they can go a long way in keeping your kids debt free.

7. Show Them Appreciation

When your kids make a good financial decision, appreciate them regarding their decision. When they will see your pride in their skills, they will automatically feel good towards it and will aim to take it further so that they can earn your appreciation again.

8. Make a Journal

Teach your kids to make a journal about their finances where they can keep record of their good and bad decisions so that they remember, and learn from them in the future. Having a record of their financial management can help your kids in the future.

9. Point Out Mistakes in a Positive Manner

Making mistakes and learning from them is human. Don’t get harsh with your kids when they make a mistake. Instead, explain calmly what they have done wrong, how it can impact their finances and how the mistake could have been avoided. If you want your kid to learn, you should be ready to accept mistakes.

10. Monitor Their Accounts Initially

Even after your kids are financially independent, keep a track on their accounts for some time initially. Keeping an eye on their spending pattern can help you understand whether your kids have money management skills or not.

By teaching your children the importance of money management, you can ensure that they stay away from debt in their lives. This can not only make them financially more stable but can also keep them away from unnecessary stress and tension. Debt is like Hydra, the multiple headed monster; once it starts, it can accumulate fast while it can get more and more difficult to pay it off. By teaching your kids the value of money today, you can give them a better tomorrow!

Author’s Bio:

This article is composed by Elaine McPartland who is associated with “Consolidated Credit” as their community writer. She has an expertise in writing articles related to debt consolidation and how to pay off debts easily and smoothly. You can add her at her google+ profile

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