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Kids, Money and Business
By Amanda Bennett
Copyright 2003 Amanda Bennett
What child has not wanted to have a lemonade stand to earn money, or asked you what he/she could do around the house to earn some money? Chances are, you know a child that fits this description, and have to smile just recalling these episodes. While we have had more than our share of fun money-making ventures when the children were small, we are working now to prepare them for a successful life as adults, with academic preparation as well as providing a sound and practical financial education.
While we learn about so many things in our early years, there are a few things that I wish I had learned about when I was younger. Things like the importance of saving money (the power of compound interest), how to get the most out of each dollar, what does it mean to earn or pay interest on money, what is debt and what does out family think about it? All of these questions, and they aren’t typically addressed in many families across the country. The children are exposed to a limited degree in high school economics, and perhaps they begin to figure out taxes when they earn their first paycheck as an hourly employee (WHY are they withholding all of these taxes, Mom?!)
When I look back on how little we knew when my husband and I got married and bought our first house, life insurance, a car, etc – I am determined that our children will have more knowledge than we did as they make such important decisions. We had no idea of what was involved in buying or selling things of value, of what it meant to have a 15-year mortgage instead of a 30-year mortgage, of the importance of making our money work for us for the future. We were clueless when it came to making business decisions, understanding contracts, the importance of finance, and so much more. We had never been taught these things in school, or by our parents. I guess that everyone figured that we would learn on an “as-needed” basis – yikes! We were determined that our children were not going to have to face these same decisions without an idea of how to make good financial and business decisions.
When we began homeschooling, we focused first on their academic lessons. As time went by and we became more comfortable with a lifestyle of learning 24/7, we worked to incorporate some financial lessons into their learning. In addition to the family game nights of Monopoly and the Farmers’ Game, they learned about portioning their earnings or allowance into categories such as church, savings, and spending.
We started talking about some of our financial choices and decisions as a family, so that the children could listen to our reasoning and how we arrived at our conclusions. The children learn from us all of the time, whether we are discussing the science of gravity or the concept of earning interest or investing wisely – we are their models, in both our actions, words, and thought processes. From the simple ideas of saving money for something that they would like to purchase and the importance of comparison shopping, to the complexities of the time-value of money and understanding how to make money work for you, we have a tremendous opportunity as homeschooling families, to provide our children with a sound financial education.
To get them started on the road to financial wisdom and hands-on learning, consider some of the following steps for each child when they are old enough to handle the responsibility:
· Checking account - joint, in both the child’s name and one parent’s name
· Savings account – joint, in both the child’s name and one parent’s name
· Give them a gift of a share of stock to help them begin to learn to read the financial page, interpret the columns of data, and have some fun in the process, watching their stock change in value. Our favorite stock to give them has been a share of Wrigley Company stock (Wrigley Gum manufacturers!) Not only has it been a good investment financially, it is a company with familiar products. As an added dividend, the company sends each shareholder a gift box of Wrigley product(s) at Christmas time each year!
· US Savings Bonds – which can be purchased at your local bank. They can begin to see how money has a time-value, watching the date of maturity on the bonds, and developing an understanding of saving for the long term.
These steps also provide the opportunity to teach your child how to develop goals – saving for next month’s museum visit versus saving for a college education or capital to start their own business. After helping them develop some short term and long term goals, you can sit down and help them devise a plan to meet these goals. Between allowance, earning money by helping others, or perhaps a part-time job, they can begin to realize their goals and appreciate the value of work and accomplishment. There is a helpful website that calculates how to reach certain goals at:
Reach Your Goals by Saving!
http://www.asec.org/ycalcs.htm
We have an older game, called “Stock Market” that we play together as a family. There are many types of games like this available now, teaching the idea of money, finance, risk and wise decisions, all in a game format that the whole family can play together. The two newest on the market are based on Robert Kiyosaki’s Rich Dad Poor Dad, and they are called Cash Flow for Kids and Cash Flow 101. They provide an excellent way to learn the very important basics of sound money management and learn key principles of business. His books and games also encourage education for entrepreneurship, which I also strongly encourage!
When I began writing unit studies for publication, the children were very interested in the publishing process and how the business worked. As they grew older, they would occasionally accompany me to speaking engagements. There, they would help with setting up the tables, selling books, and learning to have fun while working.
Growing up in a homeschooling household also gave our children the opportunity to see just what treasures books can be! They joined in on shopping for special books at garage sales and library sales, and what an education they received from these outings. One of our children developed her own used book business, offering the books for sale on her self-made web page! She experienced success at this business, and learned how to create web pages as part of the process. She then went on to build her own small business developing web pages, and still has this income resource when she finds free time while attending veterinary college.
We are firmly committed to helping each child discover and utilize their unique God-given gifts and talents, and what a blessing this has been! One of our children developed a deep appreciation of the outdoors and plants. While he was still a child, he began reading and learning about plants, wildlife, and life in the country. When we moved to the farm, he finally got to pursue his dream – planting trees for a business of his own. When I walk into his room these days, he is surrounded by all kinds of college-level books on woody ornamental trees, plant propagation, business basics, and botany books. As a senior in high school, his whole life is before him, and he has already moved light-years ahead in preparation for his future. His business is now on the Internet (www.sheltering-trees.com), and he has been immersed in learning about business law, practices, and financial management. He enjoys reading books by Robert Kiyosaki (Rich Dad, Poor Dad), the Uncle Eric series of books by Richard Maybury, and other books on personal financial management.
Where do you begin with your own family? First, I would recommend that you locate some of the Uncle Eric books, which are written for grades 7 – 12. These books share so much basic knowledge about money, business and economics in a very un-intimidating manner. I’m not sure who has learned more from these books at our house – the parents or the children!
A list of our favorite books on business
and finances for the whole family can be found at:
Books to
Teach Kids About Money
Next, take some time to read the book Rich Dad, Poor Dad, by Robert Kiyosaki. We found the audio book version of this, also – and listen to it while running errands. Then everyone gets to chime in with their thoughts or ideas. I’ve learned so much from this personally, and I know that the young people around here can stand on their own two feet with most financial decisions that they might face. They have learned about the value of money, the importance of using it wisely, the concept of interest and time-value of money, and so much more.
Whether collecting baseball cards or books, the ideas of business and the wise use of money go hand in hand. The learning adventure, once again, becomes a fun-filled family adventure. With the advent of eBay, the market place for collections and collectibles has made the world of business available to families around the world. EBay offers a free online tutorial in how to use the EBay marketplace. Take the tutorial as a family, and then begin to visit garage sales and library sales, or whatever it is that interests your family or children. This can provide an educational experience as well as a profitable one for the clan. Start with small items, so that the lessons learned are basic, and to make sure that mistakes made in the beginning are small ones.
What do YOU think about money?
How comfortable are you with your knowledge of business, finance, and economics?
Consider forming a family finance education plan for the next few years, taking the children up through high school. Here are a few helpful links:
Teaching Kids About Money
http://www.cccsatl.org/teaching-kids-money.asp
Teaching Kids Economics – Free Federal Reserve Bank
Materials Online
http://www.frbsf.org/education/curriculum/
Rich Dad Poor Dad
http://www.richdad.com
Cash Flow 101 and Cash Flow for Kids (click on “Games” on
the left hand side)
https://secure.richdad.com/Category.asp
Well, now we’re off and running for a whole new year. I hope that you and yours enjoy a happy and prosperous new year!
Until next time,
Amanda
PLEASE NOTE: This article
is copyrighted, and may NOT be used or copied
without written permission of Amanda Bennett. It is NOT in the public domain,
and is protected by copyright laws.
Thanks for your cooperation & understanding!
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