5 Ideas to Share with Your Kids and Grandkids to Keep Them Out of Debt


Your kids and grandkids can develop both good and bad spending habits at an early age.

Teaching the younger generation some basic money lessons early can help them get a better handle on their finances later in life, and also keep them out of debt.

Learning the basics about credit, money management and the dangers of debt can also aid your offspring in making good decisions when spending and earning money.

Make the following lessons fun and engaging — perhaps by sharing good and bad tales about your own financial lessons – and your younger loved ones will be more likely to learn from them.

Here are five ideas to share with your kids and grandkids to keep them out of debt:

1. Always live within your means.

Teach kids the value of a hard-earned dollar and the importance of spending only what they have. Spending more than they earn is a fast track to debt and a slew of financial problems. So make sure that kids understand how important it is to say “no” to something they simply can’t afford.

It also helps to teach them about saving for things they don’t have cash for today; that way they work towards a goal or an item they want – all while learning the art of delayed gratification and living with one’s means.

2. Money can always be earned.

Whether you’re part of a family that got wealthy by education, business or inheritance, or you come from a family of blue-collar workers, instill the mindset of working hard to earn money and make your way in life.

Kids who understand the concept of earning money in exchange for work will probably be more likely to appreciate the value of a dollar because they’ll understand that it takes effort to acquire it.

Teaching kids that you can’t take money for granted can set them up for financial success in the long-term.

3. Credit cards are not a source of money.

Even though mom and dad might use credit cards occasionally, make sure kids understand the difference between credit card spending and cash spending.

Relying on credit cards as a teenager, during college, or in the young adult years can set anyone up for financial problems later in life. It can also fuel an unhealthy debt habit.

Make sure kids understand that every dollar spent using a credit card means the risk of paying interest and accumulating debt that’s often very difficult to repay.

4. Adopt the 10 percent savings rule.

Encourage kids to get into the habit of saving by opening up a savings account and allowing them to earn money by completing household chores. Have kids put away at least 10 percent of their “earnings” into the account and keep track of their spending with the rest.

This simple practice can help school-age kids learn how to manage their money and recognize the importance of saving and budgeting – an essential debt prevention plan.

5. Recognize the difference between needs and wants.

We live in a society driven by the concept of fulfilling all wants and desires. Unfortunately, many people overlook what they actually need in favor of getting what they want.

Teach kids to take the time to distinguish the difference between their needs and wants so they can make sensible financial decisions later in life. Creating a budget for all needs (basic expenses) and a wish-list for all wants (luxury expenses) can make it easier for many kids to handle money better later in life, and stay out of debt.

Scroll to Top

Stay Informed with Our Exclusive Newsletter!

Subscribe to our newsletter and never miss out on the latest updates, exclusive offers, and insightful articles.

We respect your privacy!