My first introduction to debt was using (with permission) my sister’s credit card to shop for back-to-school clothes. As a high-schooler, I never thought twice about how the bill would be paid. Because there was no immediate connection between my spending and the bill payment, I was oblivious to the fact that credit cards were not “free money”. Perhaps that’s one reason why I’ve handled my own credit cards poorly in the past. But because my own track record has not always been stellar, I want my child to have a firm foundation for long-term financial health.

• Money wise. The older your children are, the more urgent the need to train them about money and credit. Credit card companies aggressively market to teenagers, especially in college. As the offers pour in, your children will be tempted to apply for one or more credit cards. Your timely training can help them to resist the trap of “easy money” and equip them to steer clear of debt.

• Learn how money works. Teach your child how interest adds up – either for them (in savings) or against them (in debt). Better yet, show them the difference using online calculators.

• Help your children open savings accounts. Even if just for allowance or birthday money, let them open a savings account so they can experience the benefits of interest and gain practice in regularly saving a portion of the money they receive.

• A peer’s wisdom. Early to Rise: A Young Adult’s Guide to Investing and Financial Decisions that Can Shape Your Life is written by Michael Stahl, an acclaimed 19-year-old investor. Start small. Teens need to grow into financial accountability. A great place to start is with a checking account. Explain how to read the bank statement and balance the checkbook each month. If you allow a debit card, stress the need to keep all receipts and track how much is being spent. Teens who can handle these accounts are better able to understand the realities of credit cards.

• Book and music clubs. These are other great ways to help teens start small. They can get accustomed to receiving merchandise before they pay for it, while knowing they are responsible for the bills.

• Honor God. As Christian parents, we have a unique responsibility to help our children understand that everything – including money – comes from God. One way to underscore this is to encourage giving. I’m teaching my son to tithe 10 percent of all monies he receives.

• Be patient. Impatience is a leading cause of debt. Help your teens tame the “must-have-it-now” attitude that leads to credit card abuse. Instead of serving as “Mom and Dad Moneybags” by handing over cash or credit cards whenever your teens want money, encourage them to delay purchases. Better yet, help them establish a spending plan – a budget – so they know when they can afford what they want to buy.

• Deny self. Teens need to learn to say no to themselves. Establish some house rules about borrowing – whether from you or from other relatives and friends. Decide whether borrowing is or isn’t allowed. If it is, set restrictions on the amount, from whom teens can borrow money, and how it will be repaid. If borrowing is prohibited, stick to your resolve. If teens can’t bum money to meet short-term “needs,” they will have to practice self-denial.

• Work. Membership in the working world has its privileges – among them, a salary.  Even if your teen receives allowances, it’s a good idea to explore part-time job opportunities. Proverbs 6:6-8 provides a good foundation for promoting the love and necessity of work: “Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.”As teens begin storing part-time wages, they’ll quickly learn it takes a lot of time and effort to earn the money needed for their latest “I have got to have this or I will die” purchase.
• Sink or swim. Make it clear that your teens are responsible for their poor money decisions, and discuss the consequences in advance. For example, if your teens belong to a music club, discuss the consequences of late payments. Perhaps one late payment gets a warning, and the membership is cancelled after the second.Expect your teens to get into financial trouble at least once, and be prepared to stick to your agreement. It’s better to learn a short – though perhaps painful – lesson when the consequences are less serious than a ruined credit history and overwhelming debt.

The bottom line

Proverbs 22:6 encourages us to “train a child in the way he should go, and when he is old he will not turn from it.” If we teach our children effective cash and credit management, we can be hopeful that these lessons will last a lifetime.

Ultimately, however, our kids’ money habits and debt perception are largely based on how we parents use money and credit. We set a godly example when we handle our own finances well. Thus, if we plan to have a long-term, positive impact on our teens’ spending habits and teach them to stay out of debt, we need to maintain effective control of our own money matters.