Let me ask you something. Is it irresponsible to teach your teenagers to never get in debt? The other day I was talking about how I am teaching my kids, who are 13 and 15 years of age, that they do not need credit cards or finance cars to do life. But one person told me that it was irresponsible to tell them that.
“They need to get credit cards to build up good credit to be able to buy cars and a house,” this person told me.
I had to breathe deeply to keep my cool. Irresponsible? Reckless would be NOT to teach them that there is another way to doing life than relying on debt, I argued back.

Should You Teach Your Teenagers To Never Get In Debt?
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Unfortunately, that is the hay that the herd, including myself, has been feed for decades. The idea that you need to start using credit cards as soon as possible to build a good credit history may be the standard, but it is far from being the truth or the best option for your financial health.
Even the other day, my son came home from school and told me that one of his middle school teachers was talking to the class about the importance of having credit cards. He said that the teacher told them they needed to start learning about credit cards so that they could start using them to prepare to apply for college loans.
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Are you kidding me? Teachers are telling middle schoolers that they NEED credit cards! No wonder why most Americans are in debt and living paycheck-to-paycheck. That’s what they are learning, just like we did. And if we, as parents, don’t intervene now and show them other options, they will follow the herd to the financial slaughterhouse.
So, I want to take this opportunity to make the case against teaching our kids to get in debt. You know why? Because anybody who has had a financial hardship and has experienced financial suffering would tell you this. There has to be a better way to do life than being in debt.

Why We Should Teach Teenagers To Stay Away From Credit Cards And Debt
I must give you a little bit of context about me, in case this is the first time you read my posts. I will tell you a little bit about my financial rock bottom story. It will help you understand my motivation behind wanting to teach my children that it is possible to live 100% debt-free.
After the 2008 recession, our household income went down 65 percent. We were your average middle-class Americans, with credit card debt, two car loans, a student loan, a 401K loan, and a mortgage.
All of those monthly minimum payments were perfectly doable on two incomes. But on our newly reduced Recession income, they were not. The following years were full of financial stress, money fights, depression, anxiety, and more.

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But there was one huge lesson that I am grateful for. I learned from our financial crisis that I never want to live that way ever again, paycheck to paycheck, making minimum payments while drowning in debt, afraid of not having enough money to buy groceries or provide for my family.
That’s why I swim against the current. That’s why I am writing this article. That’s why dare to challenge the popular beliefs we have all been brained washed. I truly believe that we can set up our children for success by teaching them alternatives to being in debt.
How To Teach Our Kids To Stay Out Of Debt
There are three fundamental principles that I believe we can teach our children to pursue financial freedom from the get-go.
- Pay cash for your first car and never finance a vehicle
- Graduate debt-free
- Save up money to buy a starter home
Principle #1: Pay Cash For Your First Car And Never Finance A Vehicle
I have a friend that has a son still in high school. He recently bought his first car and works part-time at a fast-food restaurant. To my surprise, he is driving the same car that I drive. It is not a fancy car, an American made mid-size sedan. I purchased mine in cash but he financed his.

This kid is not even 18 years of age yet, and he is already in debt. He is already forced to keep his part-time minimum wage job to make his monthly loan and insurance payment. He is literally working to pay for a costly ride. What if he could use that money to start his college savings fund instead?
Not financing a car, ever, is the first thing that we ought to teach our children. Instead, let’s encourage them to work their butts off over the summer, weekends, and holidays to save enough money to pay cash for their first car. And why not, throw in a bonus parent contribution. That would be a nice reward for their dedication to saving up and buying it debt-free.
Principle #2: Pay Cash For College
The second principle we need to teach our children so that they can have a shot at pursuing financial freedom is to help them make a plan to pay cash for college.
America has gone through the stock market crisis (several times), the mortgage crisis, the credit card crisis, and now we are into the student loan crisis. When are we going to learn that debt is not an opportunity?
Knowing that there is a student loan crisis, can anybody explain to me why anyone should be encouraged to take out loans? We already know that the burden to pay them off will be huge when these students graduate!

College debt is the reason why many Millenials say they are postponing getting married, having children, and buying homes. They cannot afford to do life and pay off debt!
The lucky graduates end up with around $31,000 in loans, according to the most recent data on average student loan debt. But some people graduate with $100,000 or more in debt for an undergraduate degree. That is insane! How are you supposed to advance financially with such a big responsibility added to your everyday expenses?
When my kids were in kindergarten and second grade, I realized how expensive college is in America. And I am not going to lie; I freaked out. I immediately started doing the math and knew that if we didn’t do something right away, we were not going to be able to afford college then.
Debt is a trap, a dark and painful trap, and I don’t want my kids ever to find themselves in that situation. I want the best for my children. And the best gift that I can give them is freedom. That’s why, instead of traveling, driving a BMW, or going shopping on the weekends, we started college savings accounts for both of them.
My kids know this:
- They are to be the best students they can be and get the best grades possible.
- They will apply for scholarships.
- And they will look forward to attending an in-state school.
In exchange for their hard work and dedication, we will cover their full college expenses.
What If You Don’t Have Any College Savings?
I know that many parents are not prepared to foot the college bill. But even if you don’t have money saved for college, there are other alternatives to getting into debt.
For instance, your kid can work and go to college at the same time. You can look into doing the first two years at a community college and then transfer to a university. They can apply for scholarships. And you can also look into cash flowing the expenses.
I had a college friend that paid for her tuition herself by working every summer. She was a waiter at a fish restaurant in the Lake of the Ozarks, made great tips, and saved every single penny. She cash flowed four years of tuition and living expenses from her summer job.
My friend worked every summer day for four years, she didn’t go to the beach, partied, or spent her time daydreaming. That woman was on a mission to graduate debt-free. And just like she did, there are many alternatives to student loans; the key is to have the determination to pursue them instead of readily available loans.
Principle #3: Live Like A College Student And Save For A Starter Home
So, if our children are driving paid for cars and are graduating debt-free, why would they need credit cards? They wouldn’t! Oh, I know, you are going to argue that they need them to build a good credit score so that they can qualify for a mortgage at a better rate.

But, what if I told you that I believe it is also possible for our kids in the future, to purchase their first home debt-free? In fact, there are many people today, Millenials, single moms, couples, making the sacrifices to save up cash and purchase a home.
If you don’t believe me, just check out the story of Kumiko Love, this amazing single mom better known as The Budget Mom. She worked like crazy to pay off her debt and then she decided to buy her first house with cash. And she did it!
How Could Our Grown Children Pay Cash For A House?
Let’s suppose that our bright children are interested in high demand careers like technology or engineering and that when they graduate from college, they get a job making $50,000 per year.
Debt-free, with a car, and at 22 years of age, how much do you need to live off? I believe they could comfortably live with 50 percent of their salary, and save the rest. That means that they would have about $2,100 per month to do life. It is perfectly affordable for one person, especially if they live with a roommate to save in rent.
If they stick to a budget and understand the opportunity cost of being in debt, versus the opportunity of saving about $20,000 per year, or $100,000 after five years, believe me, you will get their attention.
After four or five years, they could have saved up enough money to pay cash for a starter home, condo, or apartment. Saving this much is very doable in a mid-western city. Of course, this plan is not suitable for Los Angeles, Dallas, or New York residents. But we all have the choice to live where we want to, or can afford to live.
I live in the Wichita, Kansas, metro area, and here, it is possible to make that much as an entry-level engineer and to find an affordable starter home for around $100,000, all along becoming homeowners and remaining 100% debt-free. They would not need to use credit cards to build up a credit history and improve their credit score.
Conclusion: Should You Teach Your Teenagers To Never Get In Debt?
I believe that as parents, it is our duty and responsibility to teach our children a variety of possibilities. Most of us did not learn these principles. Therefore we did not consider alternative paths to debt in our financial journey.
Now we have new information. Now we have better information, and I have a hunch that many of us would have chosen the debt-free way. If we continue to follow the herd, who is going to show our youngsters that there are different ways to live life?
I will continue to talk to my kids about the possibility of living 100% debt-free because they deserve to know it is possible. And because since I know, it is possible, it is my responsibility to pass this information to them.
Nobody said it would be easy, but with a plan, drafting different scenarios, and taking baby steps in the right direction, I believe we can avert the next financial crisis. Reckless would be to allow our children to follow the herd to the financial slaughterhouse. And if we don’t start to teach them differently now, they will have zero chance of giving debt-free living a shot.
Related Articles to Staying Out Of Debt:
- Debt Freedom Challenge
- How To Pay Off Credit Card Debt For Good
- The Debt Snowball Method
- Living Debt Free, is it Possible or Wishful Thinking?
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