Blog

How Parents’ Debt Affects Children

By Amanda Reaume on November 15, 2016 No Comments

While they might not always show it, children are incredibly sensitive to everything going on in their parents’ lives. It’s therefore not surprising that the stress that a family experiences from dealing with debt could have an impact on kids.

A recent study by Lawrence M. Berger of the Institute of Research on Poverty at Dartmouth, found that certain kinds of parental debt can affect kids’ socio-emotional well-being.

The study found that parents who had more unsecured debt like credit card debt, payday loans, or medical loans were more likely to have children that acted out and displayed negative behaviors. This is likely because higher levels of this kind of debt can cause significant amounts of stress and anxiety – something that children pick up on. It might also leave parents with less time or ability to parent their children properly and that can lead to children misbehaving as well.

Surprisingly, parents with higher levels of student loan debt or mortgage debt had children with fewer socio-emotional problems and those kids were less likely to act out. The researchers believe that it might be because such parents are better educated and potentially of higher socio-economic status which means that they can create a better environment for their children to thrive and learn healthy behaviors. Despite this, it was found overall that those who had the greatest amount of debt – regardless of the type – were more likely to have children who acted out.

So, does this mean that if you have debt your children are destined to have behavioral issues? Not exactly. The study didn’t find a direct cause and effect relationship between debt and behavior issues. The researchers believe that the big difference between the households was in how parents reacted to debt and how they parented their children.

Canadian Families Drowning in Debt

Canadian parents are drowning in record amounts of debt. According to Statistics Canada, Canadians have $1.97 trillion in consumer debt – $585.8 million of which is consumer debt and $1.29 trillion of which is mortgage debt. That’s $21,580 in non-mortgage debt each and around $1.68 in debt for every dollar in disposable income that Canadians earn annually.

Given the results of the study, you might be wondering how it’s affecting your children and what you can do about it.

What You Can Do

If you are in debt and you’re worried about how that debt may be affecting your children, there are steps you can take.

1. Go see a financial advisor:

A professional will be able to help you come up with a plan for getting out of debt. This won’t just help you get out of debt faster, but it will likely also help reduce the stress that you feel about your debt. This will create a happier atmosphere at home and allow you more time to spend with your children creating an environment that is conducive to their healthy growth.

2. Go see a counselor:

If you’re overwhelmed by your stress and anxiety, it makes sense to see a counselor to speak about your feelings. By speaking about the source of your stress, you can come up with solutions for how to tackle it. You can also talk to a counselor about your children’s behavioral problems. They will likely be able to offer you suggestions for how to deal with them. If you’re worried about being able to afford counselling, ask your doctor about free or low cost options in your community.

3. Protect your children:

If your children are acting out and you think it might be related to your stress about your debt, make a conscious effort to protect your children from discussions about money. Children don’t understand something like debt, but they do understand when they see their parents stressed out or anxious. Try to avoid discussing money around your children if you can’t do it without your anxieties bubbling up.

4. Talk to your kids:

If you think your children are concerned about your debt, talk to them about your financial problems and reassure them that everything will be okay. This will help them feel more secure and comforted and could go a long way to helping to fix their behavioral issues.

If you’re in debt, this study is a great reminder that your children are listening and watching and that your actions have an impact on them. No one wants their children to suffer because of stress about debt or money. By protecting your children and taking actions to reduce your stress around your debt, the whole family will feel better.

Image Credit: korycheer

Amanda Reaume


Amanda is a freelance writer and the creator of the blog Millennial Personal Finance. After graduating from university with no debt, and $40,000 in savings, Amanda wrote the book The Complete Guide to a Debt-Free Education. She is also the author of a personal finance book aimed at Millennials called Money Is Everything.

10 Personal Finance Bloggers Share Their Best Money Advice

By Alyssa Davies on February 20, 2017

Every financial situation is unique and unlike others experiences, which is why every piece of information you can absorb during debt repayment will help. I know, I know, you’re tired of hearing the same old instruction from the same old places. So instead, we decided to see what others (who have been through similar circumstances)…

My Guide to a Frugal and Fun Winter

By Jordann Brown on February 7, 2017

When you’re in debt repayment mode, cutting down on your variable expenses is an important way to free up extra cash to pay off your debt quicker. I did it, and it was a key part of my debt repayment strategy. Cutting down on variable expenses is as simple as ditching any expense that you…

Valentine’s Day on a Budget

By Jordann Brown on January 31, 2017

When you’re on a budget, the most mundane holidays and events can cause financial distress. Does your friend have a birthday coming up? You’re probably already stressing about being able to afford the dinner she invited you to. The same concept applies to holidays, including Valentine’s Day. Listen, I understand. No one wants to be…

TFSA vs. RRSP: Where to Start Saving for Retirement

By Rubina Ahmed-Haq on January 23, 2017

After landing your first full time job the advice is often to start saving for retirement. Now it can be hard to convince a young person to put money away for an event that’s 40 years in the future. But what can be even more difficult is understanding where to save that hard earned cash….

No Comments Leave a Comment  

Leave a Comment

Free Savings Estimate

How much do you owe?

$100,000

$5,000
$100,000
Live Chat
Welcome to our Live Chat
Agents are not available at this time. Please leave a message. Thank you.
First Name
Last Name
Phone
Email
Postal Code
Debt Amount
 
PHP Live! powered