A Future of Financial Freedom
Picture your son in 15 years....good-looking, smart, and newly unemployed because his job has been phased out. Forced to sell his house in a slow market where prices are dropping, he soon discovers he owes more on it than it's worth because he tapped out his home equity line of credit. If he sells, he still owes money on the house. If he runs out of money to make the payments, he'll lose the house and wreck his credit rating. He's caught between a rock and a hard place.
Picture your daughter in 15 years...bright, beautiful, and working two jobs because she has enormous student debt to repay, in addition to the ever-rising cost of food and shelter. She has little time for personal relationships because her days are spent at one job or the other. She always seems exhausted, and complains about how hard life is.
These aren't pretty pictures, are they? We don't want to think our children will ever find themselves in such difficult situations. But being controlled by debt, the modern version of slavery, is increasingly common. Many people today find that their choices in life are limited simply because of the debt they've incurred.
It doesn't have to be that way. If we teach our children to understand and appreciate financial freedom, they can grow up to become adults with a world of choices. But it takes more than raising children with common sense. With easy credit lurking in nearly every advertisement, we need to purposely teach our children how and why to seek financial freedom as adults.
As homeschooling parents, we have the time to do this. And in this particular day and age, we can easily find examples of people who have given up their freedom to a life of debt. They're in our neighborhoods and our churches, and maybe even in our families. As the housing bubble collapses, we're going to see more of them than ever. Our children will see them too, and we will have to explain to them how these people fell into the debt trap so that they don't end up there themselves someday.
Most homeschooled kids are used to having more freedom in their lives than other kids. They don't have to go out in the cold early morning to wait for a bus, or sit in a classroom on a beautiful sunny day. It's likely they will continue to expect freedom as adults. Indeed, many homeschooled adults start their own businesses so they can be free of the corporate culture of 9-to-5. In order to remain free, they'll have to avoid borrowing more money than they can pay back; they're less likely to fall into that trap if we've warned them about it ahead of time.
Here are some principles we can teach our children by our words and actions:
The core of financial freedom is owning, not owing. When you owe money, your debts control you. Where you work and live is directly affected by your level of monthly payments. But when you own things, you have more choices in life than most people.
When you spend money you've already earned instead of money you hope to earn, you live within your means. This is a concept many adults either don't understand, or don't want to understand, because it means accepting that they can't afford many of the nice things they see on television and in advertising. But doing so is essential to living a life of financial freedom.
Instead of thinking about the things you wish you had, concentrate on being thankful for what you do have, and sharing it with others.
When you need money to buy something, think "How can I earn this money?" instead of "Who will give me some money?"
Learn the difference between a need and a want. You need food. You want baseball cards. There's a difference!
Waiting for something instead of insisting on it immediately is a sign of maturity. The reason Americans have so much credit card debt (nearly $10,000 per family as of 2006!) is because they insist on buying things right away instead of saving up for them. These adults have not yet matured...no matter how old they are.
How can you put these theories into action for your children? Here are a few ideas:
- Provide opportunities to earn money from the time your children are old enough to do the math involved.
- Encourage your children to save up for the things they want, and discourage well-meaning relatives from depriving them of the joy of buying something they've saved up for by giving it to them for their birthday, Christmas or "Just because."
- Do not offer advances on your children's allowances so they can buy something on impulse unless it's something they really won't be able to find again (ex., a special souvenir). In that case, let them pay you for it in installments and do not give them possession of the item until they have paid up in full. This may sound harsh, but it reinforces a key concept that will reap many benefits for them someday: "It's not yours until you've paid for it."
- Teach your children that material things are just things by living your life with an appreciation for relationships and experiences instead of purchases.
- When you pay your children their earnings, be sure they set aside a portion for giving and another portion for savings before they spend any of the rest.
- Be aware that you will have to do these things over and over again until your children are grown: expect it!
Finally, you will find the Bible to be a great resource for teaching your children about financial responsibility. There are many, many verses about money and its intended purposes. And if you are one of those adults who need to learn about financial responsibility, it's not too late! Visit www.crown.org and you'll find the encouragement and the education you (and your children) need so that all of you can enjoy a future of financial freedom.
Copyright 2007 Barbara Frank/Cardamom Publishers