Financial Fights Drive Kids into Debt

Credit Card Only

Credit Cards explained to kids in “Can I Have Some Money” by Candi Sparks
Copyright 2009. Sparks Fly. All rights reserved.

Blame the parents.  Financial fights drive kids into debt.

College credit card debt is caused by parents squabbling over money.  Not in every case, but this is the likely outcome, according to a study by East Carolina University (ECU) published in Springer’s Journal of Family and Economic Issues.   The study found that financial arguments at home contributed to increased credit card debt among children when they entered college students.

The results of the study clearly encourage parents not to fight about money in front of the kids.  However, the issues of college affordability and the necessity of student loans to pay for college are also very important issues that could contribute to the fights.

Regardless, the study underscores a need for financial literacy and education for young people which begins at home. My platform is “Money is a family matter, but money doesn’t come with instructions, neither do children. We all need and deserve a financial education.”

The study indicated that parental financial fisticuffs were twice as likely to results in students with multiple credit cards.  The fights also produce juniors and senior who were almost four times more likely to have two or more cards.  Regrettably, females were more than twice as likely to have multiple cards.

Another shocking revelation – children coming from relatively wealthy parents who fought were also likely to have higher debt.

When students unknowingly assume too much debt, they spend a significant amount of time and energy getting out of it.  They will pay high interest rates over a longer period of time.  The high debt to low income ratio would negatively affect their credit rating and the ability to get housing and jobs.  A seemingly innocent fix could turn into a nightmare.  Fortunately, the parents can take steps to avoid undermining the child’s financial future with proactive measures.
“It is clear that the influence of parents cannot be underplayed,” the researchers wrote. “We need to help students and parents learn financial skills and establish healthy financial attitudes at earlier ages to prevent poor financial habits from taking root.”

My takeaways from the study are:

Tension at home affects children negatively particularly in the area of finance.  Have positive discussions and a positive attitude, as much as possible.

Discuss financial matters at home, without fighting.  The children are listening to you and working out a financial plan is better than having a financial fight.

Positive role models at home contribute to the financial health of children.  Getting a handle on your finances will have a positive trickle down effect on the kids.

Financial Education begins at home.  Show children how to budget, and let them help the household to save money by clipping coupons, shopping on sale and saving money in a bank account or investment fund on a regular basis.  The children will get into debt during the course of their lifetime, so helping them to use credit wisely as part of an overall money management strategy is key. You can also pick up my books if you have elementary school children and want to start their financial education.

I would love to hear from you with your suggestions of what you would like your children to know about money, before it’s too late.


Candi Sparks is the author of children’s books about money “Can I Have Some Money?” Max Gets It!, Nacho Money and other titles. Her upcoming titles include “Sold Out“ and “Smart & Pretty” and these books for young people focus on building community and entrepreneurship. She is the Dean of Young and Rising Moguls at World of Money and a Brooklyn mother of two, on Facebook and Twitter (Candi Sparks, author).

About candi sparks

Candi Sparks is a fully licensed financial professional and a Brooklyn mother of two. She works with private clients, business owners, the NYC Department of Education, faith based, non profit and community organizations on financial education and implementing financial strategies for success. Events are fun, interactive and solid financial information. Sparks Fly, financial literacy for YOU(th) Learn more so you can live more! toll free: 866.556.2432
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2 Responses to Financial Fights Drive Kids into Debt

  1. Daseta Gray says:

    I totally agree that financial literacy begins at home.You should begin it once children begins to talk and are able to request items when you take them to the store.Use a list have your child help you to create the list and explain to your child that “we are here to purchase items from our list”. Children learn from repetition and you need patience for them to get the concept.

    • candi sparks says:

      This is a very good suggestion. It helps to keep away from the impulse buying! It also is a great first step in helping children to understand what it means to have a “financial plan.” The plan is to buy what is on the list – great idea! Thank you for your post!

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