Raising Responsible Children

A parent made an offer to her six young adult children.  She would lend them $10,000 each at 5% interest.  Payments would start in five years.  Formal contracts were produced and signed by all parties so there would be no misunderstanding about the expectations for repayment.

Four of them accepted the offer. Two were unwilling to go into debt and declined.  She advised the four they invest this money in something that would help then produce future income - which they did.

At the end of five years, three of the adult siblings started repayment.  The fourth had invested his money in education and achieved a greater earnings potential than the others.  However - not willing to downgrade the 5G cell plan, skip Starbucks, or forfeit the gym membership or the car  - he made the loan his last priority and never made a payment.

Ten years after the loans were made, Aunt Bea died.  She had left the six children $2,500 each in her will, a total of $15,000.

The mother announced she was taking the $2,500 from the indebted child - AND from the three who repaid their loans and the two who never borrowed - and applied it all towards the (now) $15,000 debt of the one delinquent child.  The indebted child said it was fair, mom was fully repaid, and the protests of the other five were completely ignored.

So the children all learned financial responsibility.  A wise parent, indeed.  A great example for us to follow.  It just happened to all of us.  Thanks, Uncle Joe!

–Stacy Spink, Castro Valley