Credit and debt wreck more adult lives than almost any other money topic — and parents say it's the subject they feel least equipped to teach. The good news: the foundation is simple enough for a child, and it starts with one unbreakable rule.
The first rule: you pay it back
Borrowed money isn't a gift — it's a promise. Teach the rule plainly: when you borrow, you must return it, and usually you return a little extra. You can make this real with a small lending game: lend your child money for a toy now, and have them pay back slightly more over their next few allowances. The cost of borrowing stops being abstract the moment they feel it.
Then: not all debt is the same
For older elementary kids, add the distinction that matters most. Some borrowing builds — a tool that helps you earn, a home, an education. Some borrowing buries — high-interest debt for things that lose their shine by next week. "Does this debt help me grow, or just cost me?" is a question that will protect them for life.
Why teach it young
A teenager handed a credit card with no foundation learns by getting burned. A child who already knows that borrowed money costs more, and that good debt builds while bad debt buries, walks into adulthood with a shield most people never get.
From Raising a Little Economist, a free GSU guide. More at the Economics campus, with GENO to help.
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