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Debt Management

Credit Counseling

Youth and Money

Don't let your children get squeezed when debt puts pressure on your marriage

By Pat Curry

May 12, 2000 -- Howard Dvorkin has vivid memories of his childhood and how money troubles took their toll in his circle of friends. "I grew up in a pretty rough area," Dvorkin says. "I've seen where my friends' heat was turned off and they couldn't afford clothing. That stays with you."

What does debt do to children in a family? Experts agree that the impact on the kids depends entirely on how the adults handle the situation. "There are two or three different ways this affects children," says Dvorkin, president of Consolidated Credit Counseling Services in Fort Lauderdale, Fla. "One is psychological -- debt puts a heck of lot of stress on interpersonal relationships and (the children) see that ... The psychological scars these children will carry around forever are extremely disturbing. They need to learn so they don't repeat these mistakes."

But, parents should also realize that children who don't have everything they want are not disadvantaged, says Dr. John Gray, author of Men Are From Mars, Women Are From Venus and Children Are From Heaven. One lifelong value they may learn if parents handle the debt problem carefully is how to be happy when they don't get everything they want, a skill missing in a lot of families. New York Law School professor Karen Gross, who specializes in bankruptcy and consumer finance, has counseled debtors in Legal Aid clinics and taught financial literacy to welfare mothers. "There's no question that debt carries, with the economic price tag, an emotional price tag," she says. "It affects how the debtor feels about herself and no doubt affects her ability to function comfortably and happily at home. The psychological literature is clear on how a parent's emotional well-being affects children, and debt impacts that."

The Golden Rule

If there's one absolute the experts lay down, it's this: Parents should never, ever blame their children for the family's financial difficulties. "Parents are the adults, and they must assume the responsibility for financial errors," says Dr. Michael Hurd, a psychologist, psychotherapist and author of Effective Therapy and the forthcoming Grow Up America! "If kids pressured them to buy more things, we have to remember that they are kids. The children needed the parents to set limits, and the parents failed at this task." As with almost every difficult time, a family's debt situation can actually have some positive effects. If the parents act responsibly and work to pay off their debt, the children will learn the value of money, the work ethic needed to earn it, accountability for their own actions and the money-management skills to avoid repeating their parents' mistakes. "Sometimes a family hardship can be good," Dvorkin says. "They learn what kind of stress and difficulties come when you spend recklessly and what to do about it. There's lots of millionaires out there who started with nothing. They know how to live with money and they know how to live without money."

Spend time, not money

Parents may learn a few other things, such as it's more important to spend time with their children than it is to spend money on them. "Parents need to understand that some of the most well-adjusted children grew up in poor families," says author Gray. "Wealthy parents often will give a child whatever he wants so he doesn't ever have to experience being deprived, feeling frustration, disappointment and the fear that comes with not getting what you want. "When you don't have a lot of money and your child wants something, instead of trying to quickly solve the problem, a poor parent tends to be more compassionate and empathetic and listen because that's all he can do. He says with love in his heart, 'I wish I could get it for you, but I can't,' and the child will feel completely loved. "Children need the opportunity to experience sometimes not getting what they want, being unhappy, and having someone listen to them with empathy and compassion. As a result, the child will discover an incredible ability to be happy even when you don't get everything you want when you want it. This important skill is often missing in children who grew up in wealthy families. It is no coincidence that so many successful people grew up in poor families." So, in good financial times or bad, make sure your children know that they're more important than money to you. And make sure they are.