What does national debt mean for our kids?
In the shadows lurks the national debt. As long as we don’t look at it we keep it at bay. But what does our national debt mean for our children and grandchildren?
Let’s start by looking at some of today’s numbers, some very scary numbers.
As I’m write this blog our national debt is more than $16,204,611,000,000. I can’t even type fast enough to get the whole number at one time! Check it out and see for yourself.
$141,000 The share of national debt for each American taxpayer.
This is almost three times the $50,054 median salary in 2011 when the national debt at the beginning of the year was under $14 billion.
This income downturn continues a trend that started in 2007 when the median salary was $54,489. Meanwhile the national debt has increased from $9 trillion in 2007 to over $16 trillion today.
$7,600 The amount your household owes to China.
Forget cheap Chinese imports. What happens when they send us the bill?
$51,501 Amount of national debt owned by today’s newborn baby.
That’s about the price of two years of college!
$1.5 million Lifetime share of national debt for a baby born in 2012.
Now, wouldn’t that be a nice nest egg for that baby’s retirement?
Fortunately, the taxman is not at the door demanding payment today, but future effects can put the squeeze on everyone, especially your children and their children.
As that red number grows so do the possibilities of frightening financial outcomes..
Less available tax revenue
Because more tax revenue has to be paid as interest on the national debt less is available for the services for our government to provide. Over time, this shift in expenditures will cause people to experience a lower standard of living.
Rising prices of products and services
Eventually, companies will raise prices, causing people to pay more for goods and services. Inflation results with your dollar worth less while prices go up
Increased cost of borrowing money
Higher borrowing costs will also increase the cost of borrowing money to purchase a home. With more downward pressure on the value of homes, the net worth of home owners will be reduced.
Loss of our country’s social, economic and political power
This in turn makes the national debt level a national security issue.
What can you do?
Voting makes your opinion heard and counted
2. Contact elected officials
Let your local, state, and federal government officials know what you think. Show up at local government and school board budget hearings to show your interest.
3. Show your opinion
Organize like-minded people and politely write or visit your elected representatives to voice your support, suggestions, or criticism of spending decisions
4. Evaluate your saving and spending
When the amount of American savings and investing goes up, it helps in the long run. Involve your kids in your spending decisions and explain your rationale.
5. Eliminate personal debt
Household debt leads to poor financial status and increases financial costs for you. Be aware of your personal debt and makes choices to reduce it
6. Teach your kids to manage money starting today.
With my book, The No-Cash Allowance, parents can set up an easy to use money management system to help kids learn how to manage money. With this approach kids are responsible for keeping a written or digital record of all transactions. This teaches them how the manage money as number.
As we can see with the national debt, numbers can get big and scary if we don’t pay attention. Children who learn to manage money early will be better prepared to survive in an uncertain financial future. Parents who help their children learn money management through hands-on practice at home provide kids an essential life skill.