Parents Instill Bad Spending Habits

Posted by: Meredith K. | Nov 26,2007


This post could go in the Married with Children section, Baby Boomers, or even Newlywed (if they got married late).  Sometimes the biggest impact on a young person’s sense of debt management comes from the parents.  If a parent is deep in debt or coming home from a shopping spree with arms full of bags, even though clearly he or she can’t afford it, while yelling. “It’s OK!  I put it on the credit card!” this is going to have a detrimental impact on how kids view credit.  

The reason that so many colleges have to pay catch-up with how younger people are taught about using credit as teenagers.  Case in point , some college students get their first bank account and don’t know the difference between debit card and a credit card.  Here’s an easy formula:

• Credit=buy now, pay later
• Debit=buy now, pay now

Parents leave a huge impression on their children, and financial management is no exception.  This is message to both sets: to parents, cool it with the overuse of credit cards, or teaching that credit cards are “free money.” To incoming freshman: if your parents exhibit any of the above characteristics, don’t take this as license to do the same.  Maybe your parents can afford a greater debt burden than you.  If you’re $20,000 in debt with a low-paying job post-graduation you’re going to have a personal burden, as well as be a potential financial burden to your parents who may need to help out to pick up the slack. Credit and debit cards offer an avenue for financial independence, but you’ve got to exert your independence by not succumbing to some of the bad habits that you may have been taught over the years.  

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