Why parents create “loan agreements” with their children

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Why parents create ‘loan deals’ with their kids after buying them expensive gadgets like PlayStations and TVs

  • Nicola Adams, mother of three, created a loan agreement with her two sons
  • The New Zealand woman said she was never too young to learn about loans
  • The boys, aged 12 and 9, wanted to buy their own electronics
  • But they didn’t have enough money after saving so mom made them a deal










A young mother of three has explained why she created “loan contracts” for her two sons to learn about the value of money, interest and credit scores.

Nicola Adams, who lives in New Zealand, opened up about her money-saving strategy on Instagram, noting that her sons Jordan, 12, and Tawera, nine, were looking to buy electronics but had no not enough money on their own.

“Two kids wanting to buy a PlayStation each at $425 and one also wanting to buy a TV at $65,” she wrote.

“After months of saving money for chores, Christmas money and birthday money, both children’s bank accounts are down to $350.

Nicola Adams, who lives in New Zealand, opened up about her money-saving strategy on Instagram, noting that her sons Jordan, 12, and Tawera, nine, were looking to buy electronics but had no not enough money on their own.

“As parents, my partner and I were faced with two options for teaching our children life lessons.”

She said the first was to simply explain to them that they didn’t have enough yet and to keep working hard to save until they had the right amount.

Or they could teach them about loans, loan repayments, and credit scores if money is paid back on time without any problems, “and the serious matter of extra interest and even debt collection.”

They opted for the second choice and went to Cash Converters to buy the items their young son wanted.

“My partner drafted the contract and the boys signed it. At this point the boys are in debt with the understanding that for the next X weeks they will do their chores to pay off their loan repayments,” Nicola continued.

“We explained the additional details of interest with loans, but decided not to include interest in their contracts.”

“My partner wrote the contract and the boys signed it. At this point the boys are in debt knowing that for the next X weeks they will be doing their chores to pay off their loan payments,’ Nicola continued.

Nicola reiterated that it’s never too early to start teaching your children about money and the modern world.

“Just last night Tawera sold his computer to our daughter Russia for $160 to pay off his loan faster and Jordan is considering selling his old PlayStation for the same reason,” she said. .

“I love it for them. I feel like growing up I personally didn’t know anything about this stuff and my credit rating reflected that at the age of 19.

While she acknowledges that some may disagree with this particular style of parenting, it works for their family.

While she acknowledges that some may disagree with this particular style of parenting, it works for their family.

While she acknowledges that some may disagree with this particular style of parenting, it works for their family.

“My partner and I are preparing our kids for the real world,” she said.

‘Such a great idea. I didn’t know much about money and loans when I was younger and wish I had been taught from a young age. It would have saved me from having to learn a lot of hard lessons later in life,’ one woman replied to the thread.

“I think it’s a great learning experience. Kudos to the parents! I understand there are pros and cons to this, but it’s better to learn with the parents than to find hard truths when they get older,” said another.

A third added: ‘With the number of under 20’s I see with destroyed credit and heavily in debt, I wish there was more education from an early age about the importance of it all’ .

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