Generational debt affects your child’s future; follow these tips to resolve it
The National Debt Counsellors’ Association shares advice on ensuring your debt doesn’t affect your children.
Concerns about high debt can affect entire families, and children growing up in financially stressed households are more likely to inherit poor financial habits and anxiety about money.
This is according to the National Debt Counsellors’ Association (NDCA), which represents SA’s largest and most experienced debt counsellors and wants South Africans to deal positively with their debt.
NDCA member data shows that the most financially stressed age group is 35 to 54, typically the age of parents with school-going or university-aged children. Approximately 77% of respondents aged 35 to 44 and 76% of those aged 45 to 54 reported experiencing anxiety or stress related to their finances.
NDCA chairperson Benay Sager says industry data indicates that over 60% of South Africans aged 45 and older use more than 40% of their income to repay debt, leaving little room for savings, education or retirement.
“Not only does this put immediate stress on families living hand-to-mouth and unable to invest in their children’s futures, but a lack of retirement savings can pass this stress on to the next generation.”
He says breaking the stigma around financial stress and seeking help early can break the cycle of generational debt. With both Youth Day and Father’s Day in June, this is the best month to seek help to break the cycle of this debt.
“Debt counselling is a proven, structured, legal and responsible way for parents or caregivers to regain control of their finances, reducing the burden on them and protecting children’s financial futures. It can help families shift from survival to long-term financial stability.”
Industry statistics bear this out. The number of consumers who completed debt counselling has increased 11-fold since 2016.
NDCA members report that people who complete debt counselling are more likely to recommend it to family and friends, creating a ripple effect of family empowerment.
“When parents are financially stable, children benefit from less household stress, better emotional wellbeing and greater opportunity.
“In this context, debt counselling is not just about managing debt but creating a healthier home environment and a more secure future for the next generation,” says Sager.
