A Powerful & Valuable Way to End Generational DebtFeb 21, 2019
As kids become adults, they’re faced with countless challenges, and one of the biggest financial challenges is handling credit. Generational debt in Canada has been an issue for each new generation of young adults, and it’s a concern for parents.
A great way to make sure your kids don’t fall into debt is to model healthy financial habits, which means you’ll need to take a closer look at how you manage your own money.
It’s important to show your kids how to develop healthy relationships in all aspects of life. Your relationship with money is no different.
If your relationship with money isn’t what you’d like it to be and you’re anxious about debt, you can change it the same way you’d change any relationship: by giving it some love.
Why worry about generational debt when your kids are young?
Carrying consumer debt can be stressful.
In a recent survey, Manulife Bank found that 37 per cent of Canadians are constantly stressed about their debt. That number increases to 70 per cent when people are carrying a lot of debt.
Carrying debt affects our relationships, too.
Our Debt Confessions survey found that 30 per cent of Canadians are keeping at least one financial secret from their significant others. Of those, 35 per cent are hiding credit card debt.
As a parent, redefining your relationship with money — and debt — can help you feel less anxious about your financial situation. Just as importantly, it will help your kids learn healthy habits that will prevent them from money stress and generational debt in the future.
How to give money some love
When working to improve any relationship, there are a few key actions to take. These include:
- Forgiving yourself for what’s happened in the past. Maybe you didn’t handle credit as well as you could have and ended up carrying debt. Forgive yourself for not having the necessary financial literacy skills, or for being tempted to overspend. With forgiveness, you can move forward and create something new.
- Getting to know one another better. Schedule regular dates with your finances so you can develop a clear picture of what is and isn’t working for you. Spending time with your money will help you get more comfortable with it. Use tools like our debt and budget calculators to help you improve your understanding of your money.
- Having fun together. Spending isn’t the only way to enjoy money. Paying down debt and saving money can be even more rewarding. Make repaying your debt into a game and enjoy watching yourself make progress. Even better, turn reducing spending and boosting savings into games the whole family can take part in. Here’s a budget sheet to get you started.
- Joining a wider community. Having the support of family, friends and community helps relationships thrive. You’re not the only one working to improve your relationship with money, so connect with others who are going through the same experience. Yummy Mummy Club Money Blogs offer lots of tips, tricks and ideas for any parent, plus the comfort of knowing you’re not alone. Here’s one that offers more ideas for teaching financial literacy to kids. Practical Money Skills has numerous resources for kids, including comic books and games.
- Being grateful. Money and, more specifically, debt can definitely be a source of stress. But there’s another way to look at it. We can be grateful for what our money contributes to quality of life. As you build your savings and are able to pay for the things you need and want with cash rather than taking on debt, your gratitude will grow.
Your kids don’t have to grow up to experience generational debt. Make your relationship with money a better one and they’ll learn financial literacy from the people they look up to the most.
How are you transforming your relationship with money? Tell us on Twitter. #LeaveDebtBehind #LoveAndMoney #ParentingTips