"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
"Do teenagers really take out loans to buy a car?" I asked my husband later that night as we snuggle together talking.
"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
"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.
Tell teens real life stories about how debt has ruined people's lives. Give them examples and explain the bad fruit that accompanies debt. Show them facts and figures. Show how much you pay when you pay with cash. Then show them the total amount paid for an item when you borrow money. Total up all the payments, including interest and fees. Your teen will be shocked at how much more you pay when you borrow 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.
Hard work is good for character-building. When teens work hard, save their money, and purchase what they need or want, it makes them feel successful and confident. It always feels so good to do things God's way.
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!