| February 17, 2016

How Does Your Debt Impact Your Children?

New study finds families with credit card debt have kids with more behavioral problems.

For the most part, parents tend to try to keep children out of dealing with family financial issues. Even as families struggle to stay afloat, they will scrape together what they can to make holidays and birthdays the best for kids, bending over backwards to give them what they want.

Still, as much as we try to shelter children from family financial challenges, a new first-of-its-kind study finds the debt that parents hold may affect a child’s socioemotional well-being. So while parents may try to protect their kids from feeling the burden of financial difficulty, it still has an impact that could be unavoidable.

Impact depends on type of debt

Interestingly enough, the data seems to show that not all debt has a negative impact. In fact…

“Children who had parents with higher levels of home mortgage and student debt had a greater socioemotional well-being with fewer behavioral problems than children whose parents have less mortgage and student loan debt.”

Essentially, any type of debt that helped advance the family to a better socioeconomic status resulted in a more positive outlook for how children of that family fared. So if you’re taking on debt to get your family to a better place, then the affect on your children will generally be positive. On the other hand…

“Children with parents that had either higher levels of or increases in unsecured debt (credit card or other types of debt that is not tied to an asset, such as medical debt and payday loans) were likely to experience poorer socioemotional well-being.”

The researchers attribute that difference to the fact that high levels of unsecured debt may create overly stressed parents who are hindered from exhibiting good parenting behaviors due the anxiety they’re feeling. In other words, as much as parents may try to shelter children from financial challenges that the family is facing, kids pick up on it. Even if they don’t understand why you’re stressed, they know something isn’t right.

Teaching the right lesson with credit card debt

If the result of this study are correct, carrying credit card debt over from month to month could be making for a less happy home for your children. The emotional burden and mental toll of having that kind of debt could be weighing you down even if you’re attempting to protect your children from the financial issues your household may be facing.

“While struggling with credit card debt month after month may not be doing your kids any favors,” says Gary Herman, President of Consolidated Credit, “taking that often difficult but important first step to ask for help is one of the best financial lessons you can teach them. You can show them asking for help is not a weakness while eliminating stress over debt that may be holding you back from being the best parent you can be.”

If you’re struggling with credit card debt, don’t let it impact your family and your life at home! Call Consolidated Credit today at to speak with a certified credit counselor or take the first step to get the help you need by completing an easy online application.

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