Yes, you read that correctly. I am advocating that you get your kids into debt.
Shame on me, right? Why are you so outraged? Have you have felt the crushing weight of digging out of debt? Maybe you have been that voice from the collection agency feeling pity for the poor soul you are reminding again about the ball and chain of debt tied to their legs that they better not forget about it. Or maybe you are simply a parent who has all your finances in order, and you can’t fathom why any sane person would suggest that your innocent child should ever have to deal with the responsibility of debt before they have to.
Well, they will have to. It is part of life. Yes, technically, we can live our lives without any debt, but my gosh, why would you want to? Debt makes our lives easier, and I like it. I haven’t always. I used to be the one dodging calls from collection agencies. But let’s be honest, life without debt would suck.
No online shopping? That alone should be a reason to stop this list, but I’ll keep going. No buying a home until you have all the money… really? I don’t know where you live, but I can tell you around here, that would mean I’m living with my parents for the rest of my life. No university degrees? I’m all for working students, but if I need to have all of the money upfront before I get into a class, well, I think that would shrink the pool of potential doctors, engineers and lawyers – okay, so maybe not all bad. Want to start a business? Not until you have all the capital.
It is obvious to see a life without debt is not one that most of us want to strive towards if it means we need to forgo education, housing and employment.
But what does any of this have to do with your kids and getting into debt now? Well, when exactly did you plan on teaching them how to manage debt? When they leave home, get their first credit card and a $50,000 student loan? Good luck. By then, the time to teach them anything has likely passed. This is why you need to get your kids into debt now, while they are young, while you have a chance to get them into the habit of paying back what they borrow so they can see that there are consequences to not paying back on time.
If we don’t get our kids into debt when they are young, we also don’t allow them to practice managing debt safely.
And you don’t have to worry about them getting into too much debt, not yet, anyway. Who is going to lend to your kids? Likely only you and other members of their family. Do you know what that means? Even if they make a royal mess of paying you back on time, they will not damage their credit score. They also won’t be amassing massive interest charges either. We are talking maybe $10 or $20. If you have it and want to get crazy, go ahead see how they do when they borrow $50. But they are borrowing this money. It is not a gift! So make sure they have a source of income to pay you back: an allowance, part-time job, something. If you are going to be the bank, you also need to follow some sound lending practices. Do they have a track record of paying back on time? What other debts do they have outstanding? Add some penalties and fees if they need to get their act together.
Teaching our kids to manage debt while they are young is the safe and responsible thing to do. It will put them on a track to build the habits they will need to manage debts on their own. So I’m begging you. Get your kids into debt. You will be thankful that you did!