Why Four Year Old's Have No Debt

debt free boy

I took a quick survey of my sons friends and turns out none of them have debt. Not a single credit card or mortgage balance between any of them. Now this is amazing since the average household with credit card debt has over $16,000 in credit card debt. It made me think how is this possible. Was it just my small sample size? So I started asking more people I knew and it turns out all their kids had no debt either. I knew I was onto something.

At first I thought perhaps they were all rich. I mean in today’s society that’s what you need to do right? Get rich and then you’re set. But get this… None of the kids were rich. I mean one had a lawn mowing business and was bringing in a few bucks and another had a candy racket buying in bulk and selling to his buddies and family (future entrepreneur that one!). But generally, most of these kids income was coming from a small steady paycheck, or allowance as they called it.

So I dug deeper and get this. All of their basic expenses were paid for. Shelter, food, clothes just given to them. Their parents were giving them all the stuff that they needed to live.

But the real secret? They didn’t have a credit card. They couldn’t get into debt to buy the latest Jeep Power Wheels, because their parents thought their Hot Wheels bike was just fine.

It turns out if you can afford the basics to keep you alive and don’t have access to debt, you can’t get into debt.

I wonder what the world would look like if adults didn’t have credit cards. If all of us had to live within our means instead of having a little hunk of plastic that could make all your short term dreams come true. And only at the cost of 18%+ interest… Sure we may have a few pairs of pants with grass stains, but I bet we’d have a bigger smile on our face while we’re pedaling that sweet bike.

kid biking