Whether you openly discuss your personal bankruptcy in your home, or you prefer to keep that information between you and your spouse, your children are soaking up information about your finances like a sponge. If you think you are hiding your personal bankruptcy from your children, think again: between the stress and anxiety you’ll be experiencing – not to mention your negative attitude towards money – your children are learning that money is something to be feared or hated.
Let’s face it: no parent wants to expose his or her children to the intricacies of personal bankruptcy. However, there is a way that you can pass the lessons you have learned from personal bankruptcy onto your children. This will help them avoid the financial mistakes you made in your younger years, as well as encourage them to talk openly and honestly about money, which in the past was a hush-hush topic in America.
So how can you pass the lesson of personal bankruptcy to your children? Take a look:
1. Stress to your children that a lack of savings or unexpected financial emergencies resulted in your money woes, not money itself or just bad luck. If you discuss your personal bankruptcy with your children, let them know that failing to plan for unexpected expenses caught you off guard. Then stress that declaring bankruptcy is a way to start over again, and it provided you the chance to prepare better for the future.
2. Tell your children that they should not avoid debt at all costs. Now, this might seem a bit backwards, particularly as debt might have caused you to declare bankruptcy in the first place. But there is a difference between not knowing how to handle debt, and using it in a way to build a very healthy credit score and financial portfolio. Take the lessons you have learned from your credit counseling classes and use them when talking about credit cards with your children. Some parents may even want to give older children a secured credit card, which only allows them to spend up to the value of a cash deposit. This way, they can start building credit early in their lives without making debilitating mistakes when they are adults.
Passing the valuable lessons you have learned from declaring personal bankruptcy on to your children can result in helping them secure a healthier and happier financial future.