April has been declared National Financial Literacy Month. What a great time to teach your kids about loans! Many parents wonder if it is a good idea to loan money to their children.
The authors of Love and Logic® say yes. If your kids will need to know about loans as adults, they need some practice with small loans.
Jan proudly told her friend that she had just repossessed a $189 camera from her son.
“Oh, that’s terrible. How could you ever do that?” responded her friend.
“My son was really lucky,” said Jan. “We make loans to our son just the same way the bank does it. Now, at age 12, he understands all about collateral and the responsibility of paying back his loans. Compare that to my neighbor’s 21-year-old kid. His parents always let him off the hook for his loans and he had to learn when the price was higher. The finance company just repossessed his $17,000 car. I think my child got a real bargain. Don’t you?”
Keep your eyes out for my new book, co-written by Kristan Leatherman, M.S., available this summer called MILLIONAIRE BABIES OR BANKRUPT BRATS?. In the meantime, check out the special this week on Parenting with Love and Logic.