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Teaching Our Children about Financial Freedom

If you’ve ever used a deck of cards to make a house (note to Gen. X readers: it’s something we used to do to pass the time back in the days before video games and movie rentals), you know that you can spend a lot of time building a stunning house of cards, only to have the whole thing collapse when you place one card in the wrong spot.

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I find myself thinking about that phrase a lot lately: “House of Cards.” I thought about it when I heard that a newlywed couple I know just bought two expensive new cars recently….less than a year after their wedding and their purchase of a $300,000 house. Neither of them has an exceptionally lucrative career, but with the widespread availability of credit these days, this couple’s lifestyle is not uncommon for their income level.

I also thought about it when I went Christmas shopping at the mall, where I drove up and down rows and rows of expensive SUV’s and luxury sedans in search of a parking spot, and as I watched my fellow shoppers spend hundreds of dollars at a time, putting it all on their credit cards.

I believe today’s U.S. economy is a house of cards. There are an awful lot of people living at a much higher standard of living than their income would normally allow. Their financial foundation is based on credit; unfortunately, cracks are beginning to show in that foundation. Consider that:

  • The number of foreclosures on U.S. homes in 2006 (through November) was 68% higher than over the same time period in 2005.
  • Among households with at least one credit card, the average credit card balance in 2004 was over $9300.
  • Americans save -0.5% of their disposable earnings each year; in other words, the average American spends more than he earns.

If we were to have a recession severe enough that a fair number of Americans lost their jobs, how would they make their monthly house, car and credit card payments? What would then happen to our economy if the rate of bankruptcies, foreclosures and repossessions were to skyrocket? And how will we feel if any or all of those things happen to our adult children someday?

Our children are growing up in a time when many people believe it’s not just permissible but actually a good idea to buy whatever you want with borrowed money. This was not so in the past, but today things are different. If we’re not diligent in teaching them sound financial principles, our children could end up overwhelmed by debt someday.

Most homeschooling parents work hard to prepare their children for adulthood by teaching them what they need to know to get through college and establish a career that pays enough to support a family. That’s a worthy goal. But it doesn’t matter how much your child earns someday if he doesn’t know how to handle money. Like my young newlywed friends, our children will spend their adulthood saddled with debt if they haven’t been taught how to handle money and credit responsibly.

Owing large amounts of money limits your choices and requires that you stay employed at all costs so you don’t fall behind on your payments. It seems incongruous that we parents would work so hard to give our children educational freedom now, yet not prepare them to have financial freedom as adults. Homeschooling parents have the time and opportunity to teach their children to handle money responsibly so that they can continue to enjoy their freedom throughout their lives.

Today’s young people are ready and willing to learn about this subject. Last year, I taught a workshop called “Aiming for Financial Freedom” to a group of homeschooled teens, and it got such a good response that we added a project based on that workshop to the new, second edition of my book, Life Prep for Homeschooled Teenagers.  Many of today’s youth want to know how they can keep from being encumbered by debt so that they can choose their life’s work based on what fulfills them, and not just on how much a specific career pays. They want to learn how to handle money wisely so that they have money for the things that are important to them. They’re also very interested in learning how to save up money so they can finance their own businesses; many of them already understand that having an entrepreneurial bent is one of the keys to success in the new global economy.

Our young people are raring to go: all they need is some help in learning how to achieve financial freedom and keep it. It’s up to us as homeschooling parents to help them, so that if and when the “house of cards” falls, they won’t be among those who lose everything.

Copyright 2007 Barbara Frank/Cardamom Publishers; used by permission

Barbara Frank is the mother of four homeschooled-from-birth children ages 14-23, a freelance writer/editor, and the author of “Life Prep for Homeschooled Teenagers, “The Imperfect Homeschooler’s Guide to Homeschooling,”and “Homeschooling Your Teenagers.” To visit her Web site, “The Imperfect Homeschooler,” go to 

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