credit card problems


Debt:  Is Your Bad Debt Affecting Your Child?

Children learn money management by watching their parents.  If your own personal finances are a mess, if you are constantly stressed about money - you are shaping your child's view of the importance of money.

Parents facing late credit card payments, bankruptcy or foreclosure are frightened and anxious.  Their children feel the anxiety and fear without understanding the cause.  In trying to protect their child, parents may avoid any discussion or explanation about the family's financial crisis.  At the other end of the spectrum are parents who tell children about their worries and the danger the family is in without considering how their child may process that information.

Childhood fears are greatest when the target of the fear is unknown.  Monsters under the bed or fear of the dark are common in children.  By explaining the family crisis in a simple straightforward way parents can often lessen their child's fear.

The world of a child is small and revolves around him.  He learns constantly from the feedback he's given about what he thinks and what he does.  He relates a parent's problem to himself and often takes on responsibility in his mind for bad things that may happen. 

Poor financial management by parents often has real consequences for their children.  Thousands of kids know that food shopping occurs only after the food stamps come in the mail.  They know that purchases can't be made until payday.  If he sees waiting as "planning" the necessity becomes a lesson learned.  If he is taught that waiting is a monthly crisis, money will be a fearful subject in his mind.

When a parent is under financial stress, listening and responding to a child's questions as they are asked is critical.  Having to tell a child you are facing foreclosure and will lose your home is traumatic for him.  You may anticipate that your child wants to know "why" - but if you listen to his question, he may only ask "where will we live".  Children are adaptable and in his world he may only need to know that he will be safe and that he can trust you to keep him safe.

Treating discussions of money as a normal conversation leads to healthy views on financial management as children grow up.  Watching a parent routinely deposit money into a savings account, seeing bills opened and paid and hearing discussions of prices and lower cost purchases teach children that money is something to manage rather than fear.

Parents who never learned good personal financial management can find it hard to talk to children about money.   However, kids love projects and can be helpful in setting parents on a better financial track if they are allowed to be part of the solution to debt or money problems.  A family working together to find better ways to manage their resources will teach valuable lessons about debt management, cost of living and the value of work and teach their children skills that will last a lifetime.