Incurring debt is easy and anybody can do it. Managing debt is complex and anybody can do it.
Borrowing money happens for all sorts of reasons. Some financial, some lifestyle, some necessary, some wasteful.
The goal is to give our children the tools so they can manage their debt :
- How much will it cost me to borrow the money ?
- Can I manage the repayments even if my circumstances change?
- Can I manage the repayments if interest rates go up?
- Am I borrowing to buy a financial or a lifestyle asset?
- Am I borrowing to buy a liability?
- Being mindful of credit card purchases, high interest compounding and the danger of minimum payments.
- Is it a want or a need ?
- Spending less than I earn!
A financial education will give them these tools.