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Debt Reduction - Make it a Family Affair

Apr 25, 2008
Let's face it, kids are expensive. Besides providing for the basic needs of their children, many parents find themselves bombarded with requests for the latest "it" thing. Between the needs, the wants, and extracurricular activities, kids can sabotage a families effort toward debt reduction. Don't let kids blow your budget!

Use these tips to make reduction a family affair:

Get Real With Your Kids. Often times parents find it difficult to say no out of guilt over what other's have given their kids. Base your motivations only on what you can afford, not what everybody else has. You'll save your money, and teach your kids a valuable life lesson.

Many kids have no idea what their families financial situation actually is. Get the whole family involved in paying bills and creating a monthly budget. Let kids see what's left over after the bills are paid. Teach them about the concepts of saving, creating an emergency fund, and prioritizing spending. It's easier to say no, when everyone understands where the money is going.

Give Kids The Tools. When kids want an expensive item, teach them to save by helping them to set up a savings account, and set a goal to reach their savings. You may agree to match their savings if they stick to the budget. This lesson will do two things. First, it teaches them to save for the things they want. Second, it gives them time to think about whether or not they really want the item, and teaches a valuable lesson on impulse shopping.

In addition to teaching them to save, teach them how to budget. Set up a regular allowance, being clear and up front in letting kids know how much money they can expect from you. Then, let them make their own decisions on how to spend the money. If they prefer designer shoes or jeans to more affordable brands, they will have to save for a while to make up the difference themselves. Kids will quickly learn whether it is quantity or quality that matters.

Make Kids Accountable. When you open a cell phone bill to find an extra $200 in text messaging fees, let your kids pay the consequence. It may mean they work off the debt with chores, but there should be a price.

Better yet, anticipate the surprises as you can, and let your kids pay the difference to upgrade the plan to include unlimited texting. Keep track of how much they spend downloading music, and buying or renting movies. By absorbing this into your monthly budget yourself, and covering all of your kids costs, you are robbing them of a valuable life lesson. Let them own it!
About the Author
Consolidation isn't the only way to get out of debt. Another effective way to speed up debt reduction is to snowball credit bills. Find out how the snowball method works on the Debtopedia website at http://www.debtopedia.com
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