A Child’s First Attitude-Changing Loan

Main Message

Middle school student learns harsh realities of a personal loan. 


A friend shared a personal story about his first “loan” experience. He was in middle school and wanted a new, expensive bicycle – like his friends had. He had some cash, but needed more to buy the bike. With the summer approaching, he wanted the bike now.

So, he convinced his father to loan him the money. But instead of handing over cash, the father insisted on a weekly repayment plan that included interest. They agreed – in writing – the bicycle would be taken away if one payment was missed and returned when the loan was current. The bike would be sold if two payments were missed.

My friend never missed a payment, he said. But he recalled that his fancy bike was not so cool after a couple weeks. The weekly repayment commitment really stung when his friends decided to go to the movies and he couldn’t go along because of his bike obligations.

It sounds like a tough bargain with difficult choices for a 12-year old boy. But it certainly made an impression on my friend who vividly recalls it 20 years later.

Money Moment

A child asking for money to make a special purchase has created several Money Moments™.  Topics include: comparison shopping, loan programs, earning the extra cash with chores, plus discussions around wants versus needs.

About Chuck

Chuck is a publisher of financial education materials, an entrepreneur, and journalist.
This entry was posted in Borrowing, Spending and tagged . Bookmark the permalink.

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