Debt Free Living: Nurturing Financially Responsible Teenagers

author-img By Mashum Mollah 5 Mins Read 11 September 2023

Debt Free Living

As teenagers leave their parent’s nest, the idea of earning money and living a life free from debt can be inviting to them. Unfortunately, most teenagers will start borrowing cash without a plan on how to repay it, which leaves them in a debt trap. In fact, 24% of the young generation spend a life of perpetual debt, according to the Independent, with 48% finding it hard to make ends meet without the boost of a personal loan in between paychecks.

While some of them will get away with living this life, the chances of defaulting on the loans are quite high. Sadly, the burden of helping them out of their financial turmoil might fall in your hands. The trick is to train your kids on achieving financial freedom at an early age instead of waiting for them to learn in the real world.

Here is how to nurture financial responsibility into the lives of your kids at an early age:

Add Them as Authorized Users

Even at a young age, your kids still need to understand how credit scoring works, according to Offering them the position of an authorized user to your credit card will play two purposes; build their credit score as well as train them on how to handle credit. As an authorized user, they will enjoy the luxury of using your credit card account without being legally obligated to cater to the monthly payments.

While they will rely on your credit score to build their own, a simple delay in repaying the credit will lower your credit score, which is why responsibility is a necessity. You should then set ground rules on what they are allowed to spend the money on and the limits to their spending habits. To reinforce these rules, avoid using the same credit card as they do to separate your transactions from theirs.

Help Them Open A Savings Account

Delayed gratification is a virtue that can best be learned through a culture of saving for something. Once your kids are old enough, help them open a savings account. In these accounts, they can save the cash that they generate from allowances and their jobs.

You can also help them open a checkings account to help them learn the penalties that come with an overdraw or bouncing the checks. While this will offer them some financial freedom, it will limit their freedom to the amount of cash they have saved up in the accounts.

Encourage Them to Take a Job

A job will act as a great source of income for your kids through which they can pay for any credit that they accrue. It will also help in learning how to budget for income at a young age while they still have the comfort of depending on you. As they save their income, the increased savings will offer them enough gratification and instill a culture of financial responsibility in them.

Similarly, a single unwise move in how they handle their savings will result in their depletion. Watching their income fade away into worthless spending sprees will, in turn, encourage them to be great decision makers.

Talk to Them About the Credit Opportunities Ahead

Even though they might want to stay credit-free, it might be tough to start out life on their own without some credit. Student, auto and home loans might all be liabilities that they have to incur in the future. When compared to a single credit card, most of these loans will require them to commit to paying them back.

As such, it is vital to educate them on the best ways to pay down these loans. You can offer them advice on how to budget their income to ensure that they do not miss a payment or end up stressing themselves. Alternatively, you can encourage them to use gamification to add some fun into loan repayment.


Your kids should never have to enter the financial market clueless on how to handle their credit. Furthermore, raising financially responsible kids will come to your rescue when old and in need of their financial assistance. Consider the tips above to instill the right culture of financial responsibility.

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Mashum Mollah

Mashum Mollah is an entrepreneur, founder and CEO at Viacon, a digital marketing agency that drive visibility, engagement, and proven results. He blogs at

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