One of the best ways to equip your children to handle financial trouble – and avoid it if possible – is to teach them wise spending. Not all, but much , financial trouble comes from overspending

It isn’t easy to keep within your budget in a nation of overspenders and avid consumers. Children are urged to buy things every time they watch television. Advertising promises them the world and it’s hard to resist.

Although it’s natural for children to respond to these enticements, we have to educate them about the hazards of buying everything they want, especially if they are going into debt to buy those things.

According to Debt Settlement USA, a leading debt settlement company, the amount of outstanding consumer credit grew by more than $31 billion in the second quarter 2008, and nearly $137 billion since 2007.

Watch carefully how your children spend their money. Perhaps they overspend on gifts to buy friendship, or maybe they spend to cheer themselves up.

To help your children become wise spenders, help them learn a few techniques for curbing excess spending:
 

• Before your children spend, have them list what they intend to buy and how much they want to spend. After each purchase, have them record what they actually spent and compare what that did to their intentions.
  
  
• Many overspenders tend to be more tempted in certain predictable places. In my family “I want, I want” increases in a mall. If you must go to the mall, make sure it’s not just for fun, but to make a specific purchase.
  
  
• Help your children identify a medium-term goal that’s not too easy or hard to achieve. Make sure they really want the rollerblades or bike. Have them carry a picture of the desired purchase and remind them to look at it when the impulse to purchase strikes.
  
  
• The more time an overspender has to think about a purchase, the more likely they’ll give up the impulse. Set cooling-off time limits based upon the cost of the item. If they want to buy a $20 product they must wait a week; $50 wait two weeks and so on. With a little time and distance your children will probably avoid making unwise purchases.
  
  
• Encourage overspenders to shop with a conservative friend who will reinforce their spending plan. It’s hard to resist spending when you are with another overspender.