"Not a truck. I'll be driving a jeep," he replied, grinning from ear to ear.
"Yes, I'm going to buy a jeep."
"But first you'll learn to drive in your daddy's truck, right?"
"No. My mom's going to help me get a loan so I can learn to drive in the jeep," he assured me.
"Oh, no! Please don't go into debt!" I explained to him the the perils of debt and the wisdom of living debt-free.''
The teenage years are a time of idealism and hope. Most teens believe that they will grow up to have lots of money to be able to enjoy all the things they want in life. They don't realize how expensive life is and expect their money situation to get better and better as they age.
The opposite is true. Teens who work have more disposable income than young married couples with children. Teenagers have free rent, food, clothing, gas, books, supplies, television, computers, I-pods, electrical appliances, trips, toiletries, vacations, movies, and use of the family car whenever they want to drive. So, they are free to spend money they earn however they want to spend it.
Teens & Car Payments
"Honey, many teens get a job at a fast food restaurant or grocery store and their bosses encourage them to take out a loan, figuring that a teenager with a loan will be a better employee."
"Oh, dear," I mumbled, shocked.
Why would a parent encourage a child to go into debt? How is that loving?
Teach Your Teens about Debt
Talk about debt with your teenagers and teach them how to get out of debt. Explain to them the warnings about debt in Scripture, how all debt must be paid back, and that God sees debt as foolishness.
"The rich rule over the poor, and the borrower is servant to the lender," (Proverbs 22:7 NIV).
"The wicked borrow and do not repay, but the righteousness give generously," (Psalm 37:21 NIV).
Your teen can live a life free from debt. He will learn to live debt-free if he sees his parents' example of debt-free living. Make it your ambition to spend your money according to God's Word, waiting on the Lord rather than than using debt to buy things that you cannot afford. You will give your teen a great gift if they can imitate the godly way you handle your money.
Saving & Spending
Open a savings account with your teen at your bank or financial institution. Savings accounts for minors or college students are usually free. Encourage or require them to tithe 10% and save 10% or more from any money they earn or receive as gifts.
My grandmother collected "rent money" from children and grandchildren when they lived with her. She tucked it away and returned it to them when they needed money for college tuition or a down-payment on a house. Have teens pay for something they use, even if it something simple like shampoo and body wash. This will teach them a little about the value of money and the cost of living.
Hard Work & Delayed Gratification
Instead of borrowing money to get what they want, teens can learn God's method of acquiring wealth: delayed gratification and hard work.
The secret to financial success is delayed gratification, waiting to purchase things and spend money until God has provided the money to do so. This requires self-control.
Teenagers can start their own businesses. This is another stepping stone to financial maturity and wisdom. Talk to him/her about business ideas and brainstorm together. Wouldn't it be wonderful to set your teens up for financial success. You can do it!
I created a one-credit high school course to teach my own teens about economics, financial management, and how to start their own business. Economics, Finances, & Business is available at Amazon. The E-book is available at PayHip or Currclick.
Don't miss the opportunity to impart financial wisdom to your teen.
For His Glory,