Have you ever thought of financial loans and onions in the same sentence? Jacob makes the correlation and gives us great strategies for teaching our kids some valuable life lessons surrounding loans.

Scripture

The rich rules over the poor, and the borrower becomes the lender’s slave.

Proverbs 22:7

Reflect

Do you like eating onions?  I love adding onions to my food or meal because they add lots of flavor and make what I’m eating really enjoyable.  There is just one problem I have with onions though.  Several hours after I eat them, my breath stinks…and bad!  Financial loans are a lot like this.  They immediately add lots of flavor and make our life really enjoyable.  The only problem is that several days, months and years later – they stink…and bad!

Financial loans can be helpful in some areas of life but overall, I would strongly discourage using them!  It can be helpful to have some loan experience in order to build credit but the only loan that I would recommend to anyone is a mortgage. 

Below are some helpful tips to start teaching your kids about the importance and/or dangers of financial loans: 

1. Experiment. – I can imagine that right now your kids want to buy something that they don’t currently have the money for (don’t we all).  Communicate to them that there is a way for them to be able to buy what they currently want…a financial loan.  Write your own loan agreement and present it to them – detailing the amount of money you will loan them, how much interest you will charge and the timeline they have to repay it.  This will allow them to experience the good and the hard of financial loans while learning the responsibility to repay them.
2. Put the numbers in front of them. – If/when it comes time for your kids to drive or go to college – put the financial numbers in front of them.  Walk them through the details of the loan so that they are able to see the total amount they will be paying, including interest.  For example, a $10,000 car loan at 4% for 48 months will require paying just over $1,100 in interest.  When your kids see these numbers, it will provide you an opportunity to speak into the good and bad of using financial loans.
3. If possible, stay away. – Financial loans can be used appropriately for the purpose of building credit or buying a home.  Outside of these purposes, I would highly recommend parents and kids staying away.  We must make clear to our kids the burden that debt is.  This can even lead to spiritual conversations around the debt that we have as sinners and the way that God has allowed us to live free from it.  If God has freed us spiritually to enjoy relationship with him debt free, why would he not want us to do that with our material possessions?

Financial loans can be used appropriately but those settings are limited.  Help your kids understand the dangers of using loans and the burden that comes with them.  You can teach them these things in the safety of your home and at any age!

Camper Corner

What is something you want to buy right now but don’t have the money for?  How much money do you think it costs to go to college?  How do you plan on paying for college?  What can you be doing with your money right now to help with expenses later?