EASY Debt Example to teach your "almost grown" kids


Money and "stuff" are the granddaddy of all motivators.  Calling Santa . . . !

Thrill of Victory (the purchase) AND Agony of Defeat (the debt)

Movies, books, gas, electronics.  Where's that big guy in the red suit?  Well, he's not around, but those wishes for "stuff" ARE. Even if you aren't a believer in credit cards, and you prefer debit cards or cash, nearly everyone has a credit card or so it seems to your child.  They are soaking up illustration by illustration of credit cards in real time.  It's like an action movie but instead of Tom Cruise being the hero, it's a credit card.  

At JG we want things made easy.  Last lessons are sometimes difficult to teach but today you can learn how to teach DEBT in a dramatic and easy fashion.  Just an fyi, we are not against credit cards.  We ARE against credit card debt and credit card abuse.  More on that another day.

Please watch the 4 minute video if you can.  We actually show you how to do this easy math but this summary will cover the high points.  


  • Be ready for the conversation with your child about buying something they really want.  You and I both know it is likely to come up soon - - - and often, right?  Find out how much that widget costs or just use my illustration if needed.  
  • Then when they ask for "it", you are *ready* for your teachable moment.


  • Either use your widget cost or use my example of a cell phone that costs $1000 (ok, it's a great cell phone, ha). 
  • Find out what your credit card company charges you, your APR (Annual Percentage Rate).  Calculate your monthly rate for this example.  Let's say your annual charge is 15%.  Your daily charge would be .15/365 = .00041.  Then put it on a monthly calculation for our example  (.00041 x 30) = .01232.  So for that $1000 cell phone, the minimum payment for the first month is $12.32
  • Note:  these days most credit card companies also charge a fee for your balance in general.  Some use 1%, so let's use that for our balance of $1000.  That is $1000 x .01 = $10.  
  • The minimum 1st month payment for our $1000 cell phone at 15% APR and 1% balance charge is $22.32
  • Some credit card companies have a minimum that must be paid.  So if the calculation we just computed was only $18, and the minimum "must" pay balance amount is $20, you'd have to pay $20.  Sorry for the confusion on this, but you need to know.
  • In short, credit card companies use many methods to calculate your APR and balance % amounts and minimum fees, so you MUST check your credit card statement.  This example is a fairly good representation, however.


  • By now your mini you is thinking, "wow, I can get a new cell phone for just $22 bucks per month.  Sign us up, Mom."  
  • It's at this point that it might be easier to google "credit card payment calculations" and use online calculators to help carry you through paying off the entire cell phone bill.  
  • I used https://www.bankrate.com/calculators/managing-debt/minimum-payment-calculator.aspx    Hat Tip:  BankRate.com          There are many of these calculators online but I like this one because it helps you calculate based upon not only your APR but your overall balance fee, too.  Again, each credit card company is different.


  • Now you can come in for your teachable moment.  
  • IF you just paid the minimum balance each month until the cell phone was paid off (thanks to BankRate.com calculator for this ease), it will take 
    • 106 MONTHS to pay off this cell phone
  • Everybody all together now . . . that's almost 9 YEARS.
  • Does anyone think they will keep their cell phone that many years?  Few will.  Technology alone entices us to put those cell phones in the dust bin and buy the new latest and greatest.


  • Your amazing teachable moment isn't done.
  • How much does that cell phone REALLY cost, you ask your child?  Gosh Mom, weren't you listening, $1000.  
  • Well, honey, not really.  Try $1729.  Yes, ALMOST DOUBLE the original price AND the thing is obsolete MUCH sooner than the 8 years.


Your teachable moment includes:

  • APR (Annual Percentage Rate)
  • Minimum Balance
  • Looking at credit card statements for this information.
  • The overall concept of planning for expenses and buying only when you can pay for the whole item in full.  

We can help our kids from being DEBT-istated!

Feel free to use my cell phone example, or study up the cost of their big wish and its' cost.  

Have a GREAT WEEK, and as we say . . . 

You CAN Have Success in the Middle of it ALL

Till next time,

Pam and Holly


PS 1: Like This?  Help us stay AD-FREE
If you found this helpful, would you mind hitting the "like" button?  We intend on keeping our educational content (videos, blogs, podcasts)  all ad-free and those "likes" help tremendously.  We do occasionally offer educational courses over and above our parent development information offered freely and as regularly as possible.  Commercials with crazy stuff can easily distract, so it is our desire to self-fund and stay ad-free.  So thank you so much for your support, your comments, and your "likes".
PS 2: Free Parent Guide
We've put together a free "8-Step Parent Planning Guide" that is chock-full of information you might want to teach your "nearly-flown" child.  It's a parent time-saver, and gives you concrete lessons to use at your discretion.  Developed by parents previously in your shoes, we know you will find it super helpful.  
Here's the link for it: 8-Step Parent Planning Guide
Who Is JellyGeneration?

Pam Hardison, MBA, BBA in Finance and Business Education, has created and co-owned a national mail order catalog which at one point was the 21st fastest growing customerbase in the nation.  As a mom of two college-post college daughters, considers it a privilege and to meet other students and parents along the same road.   After teaching high school and college students for years, her commitment to helping them with topics most schools can't cover is the light that drives her.  

Holly Powers, Attorney-At-Law (Jameson & Powers, P.C.) has been actively practicing law since 1985 and is a shareholder with the law firm of Jameson & Powers, P.C.  The firm specializes in transactional law, health care law, and general business law.  Holly has taught students precepts concerning the legal world for over 10 years.  With 4 children, she understands what teens need to know and has a passion to help others faced with teens and aging parents.  




Stay connected with educational updates!  

Join us and other parents just like you, ready to learn all the latest in reaching their young adult with vital information to help them launch as successfully as possible. 
Don't worry, your information will not be shared.

Count Me In

50% Complete

Two Step

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.