Should Parents Bail Their Children out of Debt?

It can be very difficult for parents to see their children struggling financially. Parents automatically want to help their children and if they have any problems they will help if they can. However, if they have debt problems, bailing them out may not be the best thing to do.

It could seem very cruel to leave your children to struggle if they get into debt and cannot manage the repayments. As a parent you may feel that you have no option but to help them if they ask you to and make sure that they do not have to pay extra charges or fines, but this could be a mistake for several reasons.

If your child gets used to you bailing them out then they will have no motivation to budget and be careful in the future. They will know that you will be there to help them and so if they overspend the consequences will not be bad because you will be able to help them out. You might enjoy being able to help them and feel that it is your duty but if you are in a situation where you can no longer afford to help or you are no longer around to help, they will really struggle then. If you can help them by teaching them how to budget and spend less and how to earn more they will learn a much more valuable life lesson.

There could also be a problem with jealousy. If one child gets lots of financial help from you and their siblings do not ask for help and therefore do not get any money, they may feel that they are being treated unfairly. They may feel that it is unfair that they are going without and working hard to make sure that they stay out of debt when their sibling is not and that they are being punished for their good behaviour by missing out on money. It may even make them think that it is no longer worth budgeting and they will just ask you for money instead.

No one has an unlimited supply of money and even if you even out the money you are giving one child by giving the others the same, so that there is no jealousy, you could run out of funds. This could lead to problems if there are debts to pay and no one has the money to do so.

This is why teaching your children right from the beginning that they need to be careful with money is so important. Teach them how to be wise with what they are spending, how to budget, compare prices, do not buy too many luxuries and save money each month. They will then have enough money to manage and have a backup just in case there is an emergency and they need some extra money. They should then have no reason to borrow money unless they want to buy something large like a home and should have the principles in place to ensure that they manage the repayments anyway.

It may feel really unfair not helping your children when they need it and saying no when they ask for things. This is something that many parents will find very difficult. However, you need to consider what a life lesson you will be teaching them if you do this and especially if you try to help them in other ways. If you keep giving money then they will never learn to budget or to take responsibility for earning enough money to cover their bills and you will actually be doing more harm than good. Sit down and explain to them why you are refusing and how you want them to learn to manage on their own so that they do not accumulate lots of debt in the future. They may find this difficult to accept and may feel that you are being unfair but hopefully they will consider what you are saying carefully and decide that you are doing the best for them. Obviously you will know how well they can take the news and will know the best way to explain things to them so that they will take it well and have the right attitude in the future.

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