Learning debt the hard way. Family story.
Once upon a time, eBay was the newest craze, and Terri and I had some fun bidding and fighting for things on eBay. One day, my wife noticed we had won a laptop and a cell phone. Neither one of us remembered bidding on or wanting to buy a laptop or cell phone, so we thought we had been hacked.
Being an IT guy, I started to dive into the situation. I called eBay a couple of times and exchanged messages with the seller, letting them know I was investigating what happened and that our payment might be delayed. Well, to save you all the details of the investigation, it turned out to be one of our sons. We were hacked by our own eight-year-old son.
He was open about doing it, but because bidding and closing can take days, he just placed the bids and then went on being a kid. We did the honest thing and paid the sellers.
Terri and I talked about the punishment, and the best we could come up with was to turn this into a teaching punishment. We are going to learn about debt. So, we created a debt chart, and it became a fixture on the refrigerator wall until the debt was paid off. And no, he didn’t get the laptop or cell phone.
Now how does an eight-year-old pay off debt? We had a plan to support him in getting out of debt. Here is what we did.
Extra chores: we provided a list of extra things he could do around the house and the amount that would be removed from the debt.
Things or debt choices: Do you want this "thing," or do you want us to remove that amount from your debt? This was not a forced choice, so sometimes he still chose the "thing," but most often he made the choice to reduce the debt. He wanted that debt chart removed from the fridge. A life lesson for all of us: get really motivated about something and other things become less important.
Motivation in clubs and activities: He was involved in several clubs and sports teams. With certain accomplishments, he could reduce the debt. This motivation drove him to score more goals and make more baskets. Also, at the time, he was in Cub Scouts, and he could earn debt reduction for merit badges and rank advancements.
It's fuzzy how long it took him to remove the debt chart as we look back on this years later, but it was about one year.
This was one of the greatest events in our family to teach and learn about debt and how debt can cripple you financially and limit your options.
Do we wish this had never happened? Yes. I think this son agrees with us too. None the less, a forever lesson about debt was learned by everyone in our family.
This one lesson might have changed our family tree forever when it comes to consumer debt.