How To Balance Debt And Saving, And Teach Your Kids The Same


March 4, 2017

Though our America Saves Week spotlight interviews focused on saving, “debt” came up just as often. I can’t say I was surprised, since it is another tool which gives us access to cash we otherwise wouldn’t have access to; but debt can also become an impediment to saving.

Our parents lived without debt during their early adult years. It used to be much more difficult to get access to credit cards and loans, then. Life is more expensive today and our money can’t buy as much as it did during their times. We live in a world fueled by consumption instead of one that knows how to balance it with preservation and growth; yet, listening to Shelly, Amanda, Arthur, Holly and Simone, can’t help but think more about how we can learn to balance debt and saving through some of the lessons they shared with us, and how we can start teaching the same to our kids:

Only take what you need – It might be tempting to get multiple credit cards and a bigger loan, but if you really don’t need it, don’t do it! It is so tempting to spend the money once you have it, and then you will be stuck paying for it for a very long time. Do your research, plan it wisely, be honest with yourself about how much you really need, and then choose the best option for you (preferably the one with the lowest interest rate). Simone Tchouke learned that the hard way, but she committed to paying off her credit card loans and succeeded, and is now working on paying her student loans.

How to teach it to your kids – This specific life lesson might be a little tricky to address directly, but there are ways to start forming your kids’ attitudes and behaviors around greed, sharing and gratefulness. Firstly, set a good example! Our kids learn so much from watching how we behave and react to things, so it’s important that we model what we want to teach them. Help them learn patience though fun activities and reward them when they are patient. A big part of not having everything at once requires patience.

Make lifestyle adjustments and weigh your choices – Most of us would love to eat out at the best restaurants every day, wear designer clothes and to be able to graduate from IV League schools; but with all those things comes a price tag that will dissolve your temporary “in-the-moment” high, because the bills will be knocking at your door before you know it.  Assess your lifestyle and find ways you can cut your spending; for example, start planning your meals and cooking at home, and buy things on sale or second hand. It’s amazing how much we can save when we try. Holly Parker always found ways to save and cut her expenses, the best example of that was when she sold her college meal plan and decided to cook her own meals instead, and Simone Tchouke proved that if you really want something, adjusting on lifestyle can help you achieve it.

How to teach it to your kids – Young children might find it a little difficult to understand what sacrificing a certain lifestyle entails, but there are so many activities you could involve them in while showing them the difference it makes. Try figuring out how much a homemade lunch would cost and compare that to what school lunch costs. During the holidays, make homemade decorations instead of buying them. For kids, the best part is being able to deposit the difference into a special coin box that shows them just how much they saved because of these decisions.

Think for yourself, be contrary – It’s so much easier to follow the masses, go with the flow, and to choose things that are popular; but, that might not be so smart. We are adults, after all, and we can and should be thinking for ourselves, right? So why do we fall into the mainstream without taking a moment to assess what we truly need and what works best for us? There are many reasons for it, including human beings’ psychology and a need to fit in, but take a deep breath for a moment (or two) and think about what works best for you. Arthur Parker relates this to investing where people panic when stock prices fall and end up selling, and they buy when stocks are doing well and climbing to higher prices; but, he said that the best way to do it is the opposite way: Buy low, sell high. The same can apply to lifestyle and spending decisions.

How to teach it to your kids – Handle with care! There is a fine balance between teaching your kids to be contrary in terms of doing things they believe in and want to do as individuals and being contrary with you and others for the sake of it (a common stage of child development where the word “no” seems to be the only one your child knows). There are various things you could do to help your child explore their individualism and independence, starting with exposing them to different activities and experiences while encouraging the skills and interests that emerge from them. Also, independent play helps kids realize that it’s okay to spend some time with yourself instead of always having to be with friends and groups of people. Ask them for their opinions and advice on small issues to show them you value what they think and that it is important to you. Mostly, be patient throughout the process, be observant and be their cheerleader.

Start today, make a plan and stick to it – You might be feeling overwhelmed with all the payments you need to make against loans, credit cards and just general expenses of life while feeling the need to figure out how to save enough and enjoying life; but if someone like Shelly Wolf was able to prove that she can start a career and start saving in her 40s and retire debt free with plenty left over to enjoy life, then we all can start somewhere and we all can make the decision and take the first steps to start today. Assess your own situation and choose the best way for you to plan and manage your money. You can start small with a plan to save a certain amount each month or year, use a budget and work towards bigger goals, automatically send part of your paycheck to a savings account, and so much more. There are plenty of tools online and offline to help you. The point is, it’s never too late to start.

How to teach it to your kids – Goal setting activities with kids can be fun! Have them choose something they really want (or suggest a grand prize), and help guide them in figuring out how much they need to save for it, for how long and what they need to do so. Another thing you can do is to choose an event such as a holiday or birthday that you could ask their help in planning for. Make a detailed list of what you need, how much it costs, and work on a plan together. You could even do that for a fun sleepover with their friends, or to plan something special for your spouse, a grandparent or one of their siblings.

Reward yourself – Didn’t buy that Gucci purse, or skipped eating out at your favorite restaurant and cooked for yourself instead? Calculate how much you would have spent (or the difference between the more expensive and the cheaper option) and put that amount in your untouchable savings account. Amanda Steinberg believes that not only do you reward yourself with using that money towards your savings, but then you can visually see what your alternative decisions might have cost you. Win-Win.

How to teach it to your kids – When our kids make good choices and act in a positive way, it is important for us to finds ways to reward and encourage them. Whether you choose social or material rewards, it is important to explain to them why they are being rewarded by describing what you liked about that behavior. A fun example for the young ones might include rewarding them for remembering to turn off the lights when they aren’t in the room as an effort to save energy and using badges or special stickers as incentives. For the older kids, involve them in making more cost-efficient decisions for the household could result in adding some of the money saved (or all of it) to their saving or spending funds.

America Saves Week focuses on the importance of saving, and through our newsletters, we gave you tips for yourselves and ways to include your kids in the conversation because they are easily influence by our behaviors and attitudes toward money as they watch us from a very young age. I know my family influenced mine.

We also included some quick tips on how you may be able to teach your kids the valuable lessons learned from the interviews. Because we realize how important they are, we promise you to further develop each lesson in the next few weeks to create a more comprehensive approach that includes even more activities and games you could use.

I am now developing a series of play experiences specifically focused on helping parents teach their daughters money skills in a fun way so they can grow up to become financially independent and smart women.

Do you have a daughter in K-5 and would like to help? Join my private Facebook group of an extended network of bright parents to help inherQuests gain insights, feedback and ideas from you, and for your to be the first to test out our product as we develop it.

Article by Dina Shoman

Dina Shoman Dina Shoman is a banking veteran who comes from a long family history in banking. Having built a successful career in the industry while still in her 20s, she became the youngest and first woman Executive Vice President at Arab Bank, holding board seats on the boards of multiple bank and nonprofit entities. By 2012, she was listed as the 3rd most powerful Arab business women in publicly owned companies in 2012 by Forbes Middle East and was nominated as a Young Global Leader by the World Economic Forum in the same year.

Dina is the founder of inherQuests, a company that creates fun financial education products for kids. The company’s first products (Financial Fun Boxes) are focused on teaching girls as young as 5 years old financial literacy through money games for girls built as a curriculum of educational standards aligned to Common Core and which uses the experiential education and game-based learning models.

Dina served as Executive Vice President and Head of Branding at Arab Bank from 2006 to 2012 and served as a Member of its Board of Arab Bank plc in addition to other related entities such as Arab Bank Switzerland and Arab Bank Australia, as well as several reputable NGOs in Jordan like the Abdul Hameed Shoman Foundation, the Jordan River Foundation and INJAZ. She currently holds advisory positions to startups, and volunteers with nonprofit organizations such Junior Achievement, Global Teacher Prize Award, and the International Youth Foundation.

Dina was born and raised in Jordan and educated in the United States. She holds a BS in Finance, and an MBA from Bentley University, as well as a Professional Certificate from Georgetown University in Organizational Consulting and Change Leadership.

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