Monday, March 19, 2012

How Mickey and Shamu are Teaching My Child about Loans and Debt Repayment

My 11 year old is learning about loans and debt repayment from Mickey Mouse and Shamu the Whale.  Not your standard financial literacy experts, are they? 

Photo by Brittany Whitlock

Here’s how the situation came about.  The sixth grade class at my son’s school has an optional two night field trip to Orlando, where they will be visiting Epcot and SeaWorld.  The field trip comes with a price tag of $300.  With a family of six, one of whom will be starting college this fall, an optional activity with that kind of cost is not in our family budget.  So…we told our son that he could go on the trip…if he pays for it himself.

He wants to go.  After a thorough discussion, we have decided to loan him the money, but he must repay it.  I helped him list his sources of income that he could use to repay the loan.  His goal is to have it paid off by September 1st.

His Sources of Income:
  • Allowance:  He gets $5 a week. 
  • Jobs for relatives:  Our kids spend time with their grandparents and other relatives during the summer.  They often have odd jobs that the kids can do, such as washing windows, gardening, washing and waxing cars, etc. 
  • Extra jobs around our house:  Once the regular chores have completed, we occasionally have extra jobs at our house that we will pay our kids to do.  These have included:  steam cleaning upholstery, painting, washing/waxing cars, website testing and photography for the blog.
  • Sell items:  This particular son has had success in selling some of his items in the past.  He sold his Nintendo DS for $75 and sold several games and toys in our yard sale.  He will be going through games/toys and will be selecting some items to sell this spring.
  • Gift money:  His birthday is coming in a few months.  We are giving him an option of putting “cash” on his wish list.  He can opt to use some (or all) of the gift money to pay back the loan.

Keeping track of the loan payments:
We created a unique account in his MoneyTrail account to keep track of his loan repayment.  Anytime he has some income, we will credit his Epcot & SeaWorld account.  Being able to check his progress on a regular basis and record it easily  will help him stay accountable for his commitments.  He had some allowance and cash already to start knocking down the loan amount.  Here is what his account looks like right now:

Paying for their own extra trips is not a new concept to the Whitlock children.  Our daughter and oldest son have both done this in the past.  It takes some planning and dedication but the lessons are so important.  They seem to appreciate the trips more because they do not take them for granted.  They also learn that when you borrow money, you must be committed to paying it back.  I hope that they will remember these concepts when they are faced with loans as adults.

Shamu at Seaworld, Texas
From The Jacobin's photos on

Have you loaned money to your children?  Were they able to successfully repay the loan?


  1. I think some people may find this over the top, but I like the idea. You are teaching responsibility at a good age and that is a lesson lacking in far too many people (especially Congress!).

    1. Thanks, Thad. With four kids, we literally get faced with thousands of dollars a year in potential, extra-curricular trip opportunities for our kids. For example, the marching band went to New York City and the cost was around $1300 per student. He chose to opt out of this trip.

      We pay for a lot of activities for the kids --- sports fees, honor choruses, band, instrument lessons, etc. We just had to draw a line for what we will fund and optional trips (although fun and memorable) just didn't make the cut. The kids have done very well with repaying their loans.

  2. How about the older kids? Were they very good about repaying their loans?

    6 months seems about the right time-frame for a younger child; keep us updated!

    1. The older kids have been wonderful about paying off their loans. I think knowing the expectations from the very beginning helps them to be successful. They have have had no regrets.

      Our daughter, a senior, has had 5 - 6 opportunities this year alone to go on various trips through clubs and organizations. She has become very selective and only goes on the ones that are most important to her.

  3. This is such an awesome idea to teach kids about loans and paying them back. I've never loaned our daughter money yet, but I'll try your way out if I ever do. Thanks for sharing this, Pam. :-)

  4. This is a great way to teach Kids and make then feel responsible. This would make kids confident of themselves which is very important