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Stress from debt can trickle down to kids

Kelly Dilworth

Parents thinking about charging toys, vacations or other nonessential expenses to their cards may want to hold off if they can’t afford to repay those purchases in full.

According to a new study in the journal Pediatrics, charging more than you earn to an unsecured card could have a negative effect on your children’s social and emotional well-being — even when those charges give your family a short-lived boost.

“If a family takes on a great deal of unsecured debt, the children may feel the consequences of that debt,” said study co-author and Dartmouth University professor Jason N. Houle in a news release.

The study evaluated survey responses from mothers of roughly 9,000 children between the ages of 5 and 14 and found that children whose parents carried a large amount of credit card and other types of unsecured debt were significantly more likely to exhibit new behavioral problems, such as breaking rules, showing anger or being sent to the principal’s office.

To help determine that growing amounts of debt, rather than other environmental causes, were a likely driver of the kids’ unusual behaviors, the researchers followed the same families over time and evaluated what happened when they drifted in and out of debt.

Over time, the study found, the more unsecured debt a parent carried, the more likely kids were to act out. Less expensive forms of debt, by contrast, appeared to have the opposite effect: Kids whose parents acquired large amounts of student loan and mortgage debt were more likely to be well-adjusted and well-behaved — perhaps because those parents may have had more resources to fall back on.

“Debt is a ‘double-edged sword,’” said study co-author Jason Houle in the release. “Debt can bridge the gap between your family’s immediate economic resources and the costs of goods and therefore can be a valuable resource, but at the end of the day, it has to be repaid with interest and sometimes with a great deal of interest.”

When the cost of that debt becomes too much to easily handle, the stress parents feel over their debt can trickle down to kids — especially if the stress affects their parenting.

Because it’s so expensive, “unsecured debt may induce stress, anxiety or other adverse indicators of psychosocial functioning for parents, each of which is associated with poorer quality parental behaviors, which are, in turn, negatively associated with child well-being,” wrote Houle and study co-author Lawrence M. Berger of the University of Wisconsin-Madison in the report.

In addition, the lifestyle changes that can occur when parents take on more debt than they can afford may also have a negative effect. “Both having limited access to economic resources and experiencing a decline in economic resources are associated with greater stress and harsher parenting practices as well as poorer physical and social environments, parental mental health and parent-child relationships,” all of which can take a long-term toll on kids, wrote Houle and Berger.

“Socioemotional well-being in childhood is linked to a range of adverse outcomes throughout the life course.

Your bottom line
Get help if you need it. Houle and Berger recommend that pediatricians screen patients’ families for financial difficulties and encourage them to seek counseling or other forms of assistance so that financial stress doesn’t negatively affect their parenting.

If you feel overwhelmed by your debt, try contacting a credit counselor or other financial professional who can help you put together a plan of action and regain a sense of control.

If you don’t already have a large amount of unsecured debt, try to avoid it if you can. Your mental and financial health and good relationship with your kids is a lot more important than the short-lived boosts you might receive from memorable vacations or trendy purchases.

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