Teach Kids About Money by Igniting Their Entrepreneurial Spirit!
February 12, 2010 by Sharon Lechter
- The average high-school student thinks they will make $145,000 a year.
- Only 34 percent of teens understand credit card fees.
- The bankruptcy rate among 18- to 24-year-olds has increased by 96 percent over the last 10 years.
Shocking! You probably agree that we need to start teaching our kids about money. Why don’t parents teach this important subject to their kids? Could it be that they don’t want their children to know that they, too, are in financial trouble?
Our approach to teaching our kids about money—how to earn it and how to spend, save and invest wisely—should be intentional and proactive. But, too often, we either forget that schools don’t include money management in their curriculum or we feel ill-equipped to teach the financial basics. Case in point: I’m a CPA, I’ve got the money thing down, but when my oldest son went to college several years ago, he quickly found himself mired in credit card debt. That was a wake-up call for me, so I began developing resources and tools to help my own children understand money management.
In this changing economic environment, it’s critical that we teach our children not only how to handle their money, but how to earn it and what the benefits of being an entrepreneur are. Teaching kids financial responsibility takes practice, but it can also be fun. Here are ideas that can help ensure that your children become money masters, not slaves.
Have Your Kids Pay Your Bills
Our kids are with us when we spend our money—“Just charge it, Mom!”—but they are not typically with us when we are earning our money or paying the bills. Involving your kids in paying the bills is a great first step to helping them understand the living expenses we face each month and how credit cards work and their role in our lives.
Turn a Simple Trip to the Store into a Business Road Trip
The next time you are at a store or fast-food restaurant, start a conversation about all the ways the business makes money and what their expenses are. This is a great way to create a fun dialogue about what is involved in a business, from advertising to paying employees, as well as the phone and electric bills.
Let Them Work and Create for Things They Want
So often, parents just give their kids what they want. Next time they ask for something, have them write out their goal, post it around the house and discuss ways they can earn extra money to achieve that goal. Have them create a business concept for the item they want. This will ignite their entrepreneurial thinking. Ask them to think of who might help them achieve their goal, like a local business owner. You will be amazed at how creative your kids become. For instance, they may want to sell lemonade or make cookies to sell at a local store. Loan them money to buy supplies for what they want to sell, as well as flyers or signage to advertise their business, on the premise that they will pay you back from their earnings. This will show them the real process involved in starting a business. It also gives them a goal to work toward. (Want some help? Check out my step-by-step YOUTHpreneur BIZ Kit that will help you walk your child through the process.) Make sure you celebrate with them when they reach their goal! It is an incredible self-esteem builder.
Volunteer with Your Kids and Teach the Importance of Giving Back
True understanding of money often comes from helping people around you. Your children will become more aware of what they have and more thankful when they are able to help those less fortunate.
About the Author
Sharon is co-author of the best-selling books Three Feet from Gold and Rich Dad Poor Dad. As a member of American Institute of Certified Public Accountants’ Financial Literacy Commission and the President’s Advisory Council on Financial Literacy, Sharon is dedicated to improving financial literacy across the nation. Visit payyourfamilyfirst.com to learn more about Pay Your Family First, an organization Sharon founded to teach children about money.