Beating Broke

Personal Finance from the Broke Perspective

Why You Should Let Your Teen Make Money Mistakes

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Why You Should Let Your Teen Make Money Mistakes

As parents, we want to help our children avoid the mistakes we made.  This is especially true with money mistakes as they can set people back years from achieving their financial goals.  (Sad to say, but some adults never achieve their financial goals.)  However, there are several reasons why you should let your teen make money mistakes.

My Biggest Money Mistake

Teen Money Mistakes
Photo by Sincerely Media on Unsplash

I made so many money mistakes when I was young!  Probably the costliest one was transferring to a university for the winter semester and choosing a dorm room.  I called my future dorm roommate just to say “hi”, and she was so rude and gruff!  Because I was shy and fearful about living with someone, I backed out of staying in the dorm, but I couldn’t get a refund on my money.  I paid for that dorm for four months, and I never lived there!!

My mom never said anything; she let me make my own choice, and that decision was certainly one I learned from.

Watching My Son Make Money Mistakes

My son is now 15, and while he used to be a great saver, over the last few years, he’s become a spendthrift.  If he has any money in his pocket, he will try to find a way to spend it, often on items he doesn’t even need.

I live in fear that he’ll move out, get a credit card, and rack up incredible debt, which will take years to pay off or cause him to file for bankruptcy.

Why You Should Let Your Teen Make Money Mistakes

As hard as it may be, as parents, sometimes the best thing we can do is step aside and let our teens live their lives as they inch closer to independence.

Better They Learn as Teens Rather Than Adults

Keep in mind, it’s better to let our teens make money mistakes now than as adults.  My son is trying to save for a school-sponsored trip to visit some college campuses.  However, he’s struggling with this goal because any time he makes some money, he feels compelled to spend it.

The worst-case scenario here is that he won’t be able to go on the trip.  As an adult living on his own, he’ll face much more serious consequences if he can’t save his money. The worst-case scenario may be that he doesn’t make rent and is evicted.  I’d much rather he miss the trip this year and be envious of those who did get to go.  Hopefully that will motivate him in the future to save for large goals.

Experience Is the Best Teacher

While our toddlers soaked up every word we said and thought we were the experts, our teens our cynical and eager to break free from parental control.  Simply put, they don’t like to listen to us.  Sometimes as parents the best we can do is not say anything and let natural consequences take their course.

Think back to your own teenage years.  Did you learn best from your parent lecturing you or the experience of making your own decisions and dealing with the consequences?

When your teen stumbles after a money mistake, don’t swoop in with an “I told you so!”  No one appreciates that.  Instead, be a sounding board and encourage them to make smarter decisions in the future.

Watching our teens make money mistakes isn’t easy, but as they crave more and more independence, letting them experience life, and fail sometimes, is exactly what they need.

Building Financial Sanity From The Ground Up

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There’s a term that describes the state where you can make decisions from a position of strength instead of one of weakness, and from a position of powerful confidence instead of a position of fear. This term is known as financial sanity, and it’s one of the most sought-after things for so many people who aren’t currently possessed of it. The trick is, a lot of the time, financial sanity isn’t something that can be possessed, the way one can own the contents of their bank accounts.



Financial sanity is an entire mindset, and it’s one where you’re able to make assessments over the long term instead of simply doing things for today and this instant. When you can make plans that will stick over the long term, you can get far ahead not only of your competition, but of your previous self. While it might not seem that important to defeat who you used to be, this is a vital part of getting ahead in any endeavor in life.

Building Financial Sanity From Madness

For a lot of young people, and even for professionally trained ones who can handle all kinds of problems in the academic world, there are a lot of real-world problems that can be downright intimidating to go through. When parents get sick, when a car accident leaves you with an injury and no car, or when the job market for your set of skills just isn’t what you signed up for, it can become terrifying, as well as disheartening. It might even be tempting to just dive into a bottle.

It’s crucial to fight the self-destructive impulses that will inevitably crop up. In the end, deluding yourself into believing you don’t have problems is one of the biggest issues you can find yourself getting into. The best way to overcome problems is to become a great problem solver, and this starts with thinking critically and avoiding panic.

Critical Thought

The big secret of critical thought is to evaluate why things happen the way they do. When you can think about why a situation is as it is, you can begin to understand it. You’ll find that as your understanding grows, your level of anger and fear diminish, and you feel a lot more at peace. When you’re at peace, you can think clearly about what you want to do, given the variables that are at play.


When you engage with the Student Loan Hero program, for example, you have the option to take charge of your student loans in a practical, pragmatic fashion that allows you to make longer-term decisions. This month’s payment is almost irrelevant. The real issue is, how will repaying your student loans be doable over the long term, while you’re able to accomplish your future goals as they come up? You can do just about anything you can put your mind to in a calm, clear-headed fashion.

Image source: Pixabay.com

Debunking Myths about Filing for Personal Bankruptcy

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If you’re thinking about filing for personal bankruptcy (either chapter 7 or 11), then the most dangerous adversary you face at this time isn’t an army of aggressive creditors: it’s a horde of devastating myths!

Indeed, there is arguably more misinformation floating around online and offline about bankruptcy than there is reliable information. That’s the bad news. The good news is that you can arm yourself with facts so that you can make informed decisions that are best for your current and long-term financial interests.

To that end, let us debunk the most enduring — and potentially catastrophic — myths about filing bankruptcy:

Myth: Filing for bankruptcy is an admission of financial irresponsibility or incompetence.

Fact: Across the U.S., more than 1.5 million individuals file for bankruptcy protection each year. The vast majority of these people aren’t thrill-seeking spendthrifts. They’re regular, ordinary people who fell into a debt hole that became a debt trap. For some, it happened slowly over time. For others, they were financially sideswiped by unexpected medical bills, home repairs, job loss, divorce, and the list goes on.

The message here is simple: if you decide to file for bankruptcy, then be assured that it’s nothing to be embarrassed about or ashamed of. Unsustainable debt happens. Filing for bankruptcy is a legal process designed to help people get out of debt and start fresh. It’s a protection, not a punishment.

Myth: Filing for bankruptcy will destroy your ability to get a loan in the future.

Fact: Yes, it’s true that filing for bankruptcy will damage your credit score (the actual number depends on where your credit score is right now — the higher your current score, the larger the drop).

However, it’s not true that filing for bankruptcy will permanently destroy your ability to get a loan in the future. Within months of filing for bankruptcy you can start rebuilding your credit score by applying for secured credit cards, and paying all of your other bills on time and in full. Within a year you’ll be eligible for a car loan or personal loan (you could actually get a car/personal loan sooner, but the rates will be sky high), and in a couple of years you’ll qualify for a competitive-rate mortgage.

Ironically, many people who file for bankruptcy end up surpassing their old credit score ceiling, because in their new post-bankruptcy life they are in control of their saving and spending, and are far more aware of the dangers of only paying the minimum amount on credit cards, buying “too much car” or “too much house,” and so on. They’re like people who, after getting a serious health scare, end up taking their health and wellness to unprecedented levels. They go from couch potato to marathon runner.

Myth: To save money, you should represent yourself in bankruptcy court.

Fact: If you have a legal background — and this doesn’t mean a few law classes in college or a neighbor who was once a paralegal — then you might be fine representing yourself in bankruptcy court.

However, if you’re like most people — i.e. you couldn’t write a book on how to correctly and safely file for bankruptcy — then do yourself an immense favor and consult a bankruptcy lawyer. You’ll not only avoid potentially costly mistakes, but you’ll save a great deal of time and stress. Why stress? Because once you file for bankruptcy, you want to ensure that everyone else around the table — from the court-appointed trustee, to all of the creditors who want a piece of the settlement pie, and even to the judge who is a human being and can make errors — behave in a legally compliant and appropriate way. A bankruptcy attorney ensures this happens.

The Bottom Line

Arming yourself with bankruptcy facts — and debunking myths — will help you make an informed decision on whether moving ahead in this direction is in your best financial interest.

If so, will it be a walk in the park? No. But it won’t be a trek through a minefield, either. With the right information, guidance and support, you’ll make it through this phase and into your new, better financial life ahead.