Financial Training Wheels

Teaching our children about money is a very important responsibility. Nicole Mustard, senior vice president of strategy at Credit Karma, weighs in on teens and credit cards saying:
"Think of prepaid credit cards as training wheels in the world of credit. They are best for teaching teens to control spending and the conveniences of how and where to use a credit card, without the risk of falling into debt".
This makes a lot of sense if you embrace the idea that indebtedness is a fact of life. If you think that way then you feel a need to train your children about how to "borrow responsibly". It is all very logical except that the need to borrow money is not a fact of life. I suggest these two training wheels, left and right, for your kids:
  • Train them to conquer their lust: Many have taught their kids, by their living, that it is okay to pay for their lusts for houses, cars, clothes and other things with credit cards. In doing so they teach their kids to yield to the power of their lusts. And they leave them powerless to defeat the lust that will make them slaves of debt.
  • Train them to be generous: In a sense the flip-side of lust is generosity. Lust is focused on getting things for ourselves while generosity accentuates the need to sacrificially share with others. When we are sacrificially generous we embrace the welfare of others and declare our freedom from our own lusts.
Granted there is much more that can be said about teaching our kids about saving money and avoiding credit. I would be interested in hearing your thoughts on the subject.


  1. Bob,
    this is very good. Good practical sense, and it is biblical.

    Would you tweak this a little as not just parents teaching financial principles, but as the husband and wife / mom and dad modeling it themselves, and then let me publish it on my blog as part of the guest post series I'm running on Sundays? It's good.
    Family Fountain

  2. Love it. very good advice. It is making the sucker's choice of saying that our kids will be in debt. In a similar tone, I guess we should teach our kids to get a little drunk, or use swear words just a little bit, or look at just a few adult films.......

  3. AMEN. I wish someone had stressed to me the Bible instruction to "owe no man anything but to love him" and I would have been spared MANY years of working to pay off debt and I would have taught my children likewise. It's never to late though :o) and we are working hard to that day. owe no credit cards, do not owe on our house but still paying off our HHR Chevy :o( !!! We are staying away from debt now.

  4. I am nonplussed at the conclusions drawn by those who have commented on this article.

    Nicole of Credit Karma is right on the money. I hate to state what should be obvious, but there is no such thing as a “prepaid credit card”. The proper name is “prepaid card”. For example, here is VIAS’s version: “AccountNow Gold Visa Prepaid Card”. Anyone who uses a prepaid card cannot EVER go into debt. A prepaid card is the exact opposite of borrowing and debt. It can be used to teach teens about card convenience and how to not spend money they don’t have. If they attempt to go into debt, the card stops working.

    The next paragraph, which begins with, “This makes a lot of sense if you embrace the idea that indebtedness is a fact of life” is a non sequitur. I think reading comprehension may have gotten lost here, as Nicole is attempting to teach teens to avoid dept.

    Next, there is a diatribe describing the desire for material things as “lust”. This belief is not only incorrect, it is downright dangerous. The other day I saw an elderly couple ahead of me in a brand new Cadillac, with a “wounded veteran” tag on it. I thought to myself, “Good, I hope they enjoy it!” If an intelligent ambitious person wants to work and provide a fine home, nice car, and a pool for himself and his family, without going into debt, I say let him go for it. It’s called Capitalism, you know, the thing that has created the greatest civilization ever?

    We are rapidly falling into a Marxist “dream” society where wealth is looked on with suspicion, where rewards are not earned by “merit” but by being handed out according to “need”. The new philosophy of “hope and change” says an individual’s earned wealth must be taken away from him and “redistributed” by brute governmental force. It is a road to absolute financial disaster. America will cease to be, and I hate to see the Christian Church leading the way.

  5. There is no question that there are Biblical admonitions against the love of money (1 Timothy 6:9,10; Matthew 6:24). But this needs to be put in perspective. It is not wrong for people to have nice things. It is wrong to be so consumed with our need for nice things that we go into debt, neglect our families and make obtaining them the chief goal of our life. There needs to self control exercised to keep things from dominating our lives. This does not mean they cannot have an appropriate place, looked on from the proper point of view.

  6. @leahey. I'm as capitalist as you get, but what comes of gaining the world when you have lost eternity. I think that's the Lust Bob is discussing. We are a fallen world where an equal portion does not work, but our reward is the same in eternity.

  7. @leahey - Interesting how you turn lust and indebtedness into a good thing and generosity into a Marxist tendency.

  8. Bob, nowhere did I imply that indebtedness is a good thing. It’s something you just made up out of thin air in your own mind.

    And “lust” is your term, not mine. The pursuit of the American Dream, with all its material trappings, is an admirable thing. If you choose to label that as “lust”, so be it; however it is a severely misguided condemnation with good intentions, but with disastrous consequences.

    As for generosity, I have no problem with it. If anyone wants to take a vow of poverty and give away all his income to charity, I say great! Unfortunately, we are experiencing unprecedented change where “profit” has become a dirty word and the solution to all problems is to “tax the rich”. If your definition of generosity is to have the government take away the fruits of a man’s labor by force, then yes, that is Marxism, and it is both evil and destructive.

    But your whole post was based on a clear misinterpretation of what Nicole Mustard said. In fact, your take on it was 180 degrees contrary to what her statement said. I believe most fifth graders could see the error.

    No on caught this easy to see blunder; not Warren Baldwin, not jrcharrd, not Susan, not Scott McCrae, no one. So what was the response to this post based on an unthinking misinterpretation? Splendid accolades agreeing with it! Even when the error was pointed out - no mention of it by anyone.

    There is no way to fight misguided posts like this. No way - but it can’t be said I didn’t try.

  9. @leahey - My thinking was that you missed my point about going into debt to satisfy our lusts and you were somehow inadvertently endorsing the idea that indebtedness was okay. Glad to hear that you also think it a bad idea.

    I suggest that when Nicole speaks about "prepaid credit cards" (her words not mine) she is speaking about cards that parents put money in and then the kids take it out. In these cases the parents become the creditors but the teen never repays the money (with interest) and don't really learn anything about debt. In the rare case that the teen (instead of the parent) prepays the card then I would have to agree with you and fifth graders who also have that understanding.

    My statements about lust were all in the context of getting in debt to fulfill those lusts.

    I think that your idea of the American Dream and mine are quite different. Unlike Gordon Gecko I do not believe that "greed is good". Unlike Ayn Rand I do not think that altruism is bad. And I do not think that the American Dream is all about buying things that you cannot afford just because you can. I am sure that you mostly agree - except for Ayn Rand's perspective on altruism.

    I said nothing about the government in my suggestion concerning generosity. All I said was that we should train our kids to be generous.

    Always good to dialog with you old friend. We are going to have to get together and discuss these things some time when I am in Florida or you are back in KC.

  10. The first time we took our kids to Disney, it was non stop "can I get this/can I get that". You know, typical kids stuff --- where the parents were forced to say yes or no.

    Next time, we gave them all "vacation money" that we would hold onto. (A prepaid card without the card!) This time, when they cried "can I get this/can I get that" we said "Sure, you have vacation money" to which they replied "I don't really want that".


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