How to Teach Children About Money to Prevent Financial Abuse
Financial abuse appears in many different forms and can be hard to identify as it’s an invisible form of abuse. Financial abuse is a method that an abuser can use to trap their victim in a relationship or domestic space. Teaching your children about money and abuse will prevent them from being taken advantage of.
Signs of Financial Abuse
Most financial abuse occurs in the parent/child relationship. If you foster children or co-parent, there may be an adult influence in their life that doesn’t have their best interests at heart. It’s important to teach children the signs of financial abuse.
In these situations, the parent is exploiting the child, either by taking their money for themselves, or opening accounts and credit cards in their name. This can destroy their future, as their credit score hurts with the debt the parent leaves on the child’s credit account.
The Importance of Internet Safety
While internet safety is valuable in so many ways for your kids, no matter their age, it’s especially important in preventing financial exploitation. Identity thieves will target children as they are more vulnerable. As an adult, the best protection you can take is to monitor your children’s time online, having them ask for permission before downloading anything, and only allowing them to be in chats with people they know.
Additionally, teach your children to never give out personal information to others both online, and in person. Remind them that keeping this information private is for their safety, and that not everyone is trustworthy with those details. Encouraging your children to have open communication during their time on the internet will help keep them safe.
Teens: What to Watch Out For
Talking to your teens isn’t always the easiest, so be encouraging and remind them that they are not in trouble, and that their safety is important. While teens can encounter identity theft from online, and parental abuse, they can also experience financial abuse in their relationships as they begin dating.
In abusive relationships, teens may be forced to pay for dates, gifts, or expenses that aren’t reciprocated by the partner. They may be forced to ask for permission to spend their earnings, or their partner might require access to their funds. Ensure that your teen knows these are not healthy rules or “boundaries” to have in a relationship, and that someone who loves them would not control them, including finances.
How Abuse Changes with Age
As they enter adulthood, share with your teens how financial abuse changes as you get older. Partners may keep them from accessing their accounts and stop them from getting a job to keep them under control. An abuser may coerce them into getting a credit card or loan with them and ruin their credit score. Any financial choices should be their own.
If they do find themselves in a financially abusive situation, know that they can regain independence. An FHA loan is the best option for those rebuilding their life, as it has a lower credit score requirement, and more flexible debt-to-income requirements, which can keep a lot of people recovering from financial hardship from buying a home. Recovery takes time, but they are likely to qualify for an FHA loan and get their own space sooner after such a life event.
Educating your children on abuse can begin at any age. Ensure your children know that you’re always a safe person to come to, confide in, and ask for help at any age.