Kids Make Great Entrepreneurs: Here’s How To Teach Them About Business And Life

If you don’t fancy the idea of your children spending all their holiday time watching TV and down the skate park, what should you get them to do? One idea that is becoming more and more popular among parents is getting kids to start their own businesses. Not only is this a good idea, given the direction that the economy is going, it’s also beneficial for helping kids develop confidence and people skills.

Here’s how to help your kids achieve their business goals.

Let Them Pursue Their Passion

Kids find it really difficult to focus on things that they aren’t interested in. This is why getting them to go to school can be such a mission: smart children hate the fact that they have to sit in rows all day, doing things which are boring.

Kids Make Great Entrepreneurs: Here's How To Teach Them About Business And Life - lemonade stand image

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If you want their new business venture to be sustainable, take a step back and ask them what sort of business they’d like to run. Kids who love animals will probably be quite happy to set up a dog-walking business or even a pet sitting business. Children who are gifted in music or acting could hold their own after school classes. The possibilities are endless.

Tony Hsieh, the founder of Zappos, set up a worm farming business when he was a child, selling worms to passers-by at the tender age of nine. His goal was to become the number one worm farmer in the world.

Introduce The Concept Of Money Management

Because parents provide all the resources that kids needs, many children grow up with the impression that money is infinite. The reality of business soon teaches them that it is not. In fact, it shows that it is often very hard to come by. They’ll soon find out that most companies have to go through lenders, like Colbeck, in order to make ends meet, especially for the first few months and years. Teenagers, for instance, can do things like calculate profit and loss, and how much they would have to repay to a lender every month at a given interest rate. Younger children can practice things like counting up how much money they have in the till and what they’d need to spend to expand their business.

If your children are particularly adept, you could even hold your own investor meeting, where members of the community come to hear the business pitch and commit small sums of money if they like the idea. This will get children used to the fact that they have to offer value to investors in order to receive money in return.

Teach Them About Customer Service

Being able to listen and communicate with people is an essential entrepreneurial skill. It’s what forms the building blocks of all entrepreneurial careers. One of the key skills children need to learn is how their business idea can actually benefit other people. Why do people want to have somebody sit their dog, for instance? Getting children to understand that people want problems to be solved (like the fact that they are worried what their dog will do to the house if it gets distressed while they are out) is the key to giving them good “business sense.”

Useful Tips For Financial Success From Parents To Their Kids

Management of finance is an important aspect of one’s life and as parents, you should make sure that your child starts learning about it from a very young age. Listed below are a few steps that you can take to teach ways of effective financial planning to your children.

1) Use the piggy bank method

It is perhaps the most interesting way by which your child learns about money  management. There is no point in telling him about the usefulness of saving money, or about the ill-effects of overspending when he is too young, for instance 2 to 5 years old. Therefore, use the piggy bank. Give him a dollar or two each day and ask him to deposit it in the bank. As he is rewarded with a large sum of money at the end of the month or so, he automatically will be inclined towards saving more for the coming days. Therefore, the first lesson of financial planning, i.e., the “usefulness of saving” is learnt.

2) Set Financial Goals for him

As your child grows a little older, say 7 or 8 years old, start setting short-term financial goals for him. Continue giving him a certain amount of pocket money and ask him to save up for an expensive toy or a short holiday trip that he wants. In case of the holiday trip, you can ask him to save enough money so that he can sponsor the lunch at one of the most well-known restaurants of the place you are visiting. Setting short-term financial goals from a young age always helps. In this manner, your child is slowly prepared to set long-term financial goals (like higher education) and save money accordingly.

3) Show Him the Way

Only setting monetary goals and asking your child to work on them will not be sufficient. You have to guide him as well. For instance, if you are asking him to save up for a bicycle, keep dropping hints on how he can cut down on his expenses. Ask him to cover the way to school on foot (if he can) instead of taking a cab. He does not really have to live on abstinence. However, you can definitely advise him to cut down on his entertainment costs, or his expenses on food (keeping in view that it does not harm his health) until he buys the bicycle.

4) Prioritization of goals

When your child reaches his teen, you should gradually start teaching him about the importance of prioritizing his goals. He might have got whatever he wanted as a little child but now is the time to bring about a change in his thinking. In future, there will be times when he will have to make grave choices as far as fulfilling his own wishes are concerned, for instance between an expensive car and an equally exclusive holiday trip. Therefore, start preparing him for these types of situation in life. Advise him to spend wisely. Today, if he is given a choice between keeping aside some money for his higher education and spending the same amount for a short trip with friends, he should be able to judge which is more important for him.

5) Career Tips

As parents, you possibly can’t decide the career path to be chosen by your child. It will depend on his choice, talent, and his ability to make the most of the opportunities presented to him. All you can do in this case is motivate him to follow his dreams and make sure that he gets the right kind of training that is required to transform his dreams into reality. But it would be advisable if he understands that he should choose a career that is fulfilling (in terms of job satisfaction) and lucrative as well. Only saving up money for future will not do. He should earn sufficiently as well to invest in profitable schemes so that his savings are doubled or tripled.

Marie Nelson is a passionate blogger with expertise on financial matters. The global economic crisis has been the subject of most of her recent write-ups and at present, she is writing exclusively for United Finances.

6 lessons to teach your kids how to stay away from debts in future

Many parents are not particularly inclined to discuss their debt and finance related issues with their kids. As an invariable result, kids remain unaware of crucial financial factors like debt management, savings, account dealings and face severe difficulty to handle these matters in the long run. There are certain skills and habits which every child needs to learn and develop from an early age. Financial discipline is one of them. If your kids come to know how to effectively spend, save and survive today, they can surely attain a better financial future tomorrow. Follow the instructions given below and provide your children the basic knowledge required to stay out of debt in future.

  • ‘Children need models more than they need critics’. The first lesson of money management to kids starts when their parents are not even aware of it.  Kids follow the footsteps of their elders blindly. Manage your finances well and spend your money wisely to set a perfect example to them. To stay out of debt spend within your limits. To teach your kids the difference between wants and needs, live frugally. Being frugal does not mean spending no money at all; it means think before you buy, and wait to buy until you can afford it.
  • Discuss your financial issues with your children. No matter how complicated your financial status are, attempt to make some simple bed time stories with them. Do not evade or ignore any of their queries, answer them clearly. Show them how you pay your due bills and how the ATM, checking accounts or credit cards works.
  • Make your children financially responsible by letting them spend money on their own. Of course, you are there to guide them but, make sure your child grow up making some of their own financial decisions as well. Let them commit mistakes and learn the lessons from them. If needed, confide in them your financial blunders in the past. In this way you may not be able to stop them completely from making any mistakes but at least they will be less likely to repeat these mistakes as adults.
  • Take into account your kid’s feedback and suggestions while you are planning your budget. This will give them an overall idea about the price list and monthly expenses. Make sure it should not make them feel guilty or upset for costing you so much.
  • Young kids love to collect and save pennies, present them with a piggy bank to indulge in this habit. For teen kids you better open a savings account and let him watch it grow. It will generate a sense of interest and excitement in them and they will put more efforts and hard work to save in these accounts. Excitement and anticipation both are essential to make your child keener to save money.
  • Start giving your child a weekly or monthly allowance from an early age. Instruct them not only to manage their weekly expenses within limited means but also to save a portion of it. Trigger their emotions by teaching them to donate a portion of their savings to people who are less fortunate.

All these above mentioned points are lifelong ways to teach your kids about money management. When your child becomes old enough to ask for toys or candy, it means they’re old enough to learn some lessons of financial awareness as well. As soon as they learn to count, you can start imparting your basic lessons about spending and saving. Remember the sooner they learn these lessons and apply them to their lives, it is better for their financial well being.

 

Money management – attitudes start at home

In the wake of the economic situation, Credit agency Equifax believes that it is more important than ever that future generations are taught financial skills. This belief is reinforced by the findings of recent research* conducted by Equifax amongst parents, where 35% said they don’t think their children have a good understanding of the value of money and 94% believe financial education should be part of the national curriculum.

“Young people now live in a world where debt is a fact of life and research has found that student debt has topped £5,000 for each year of study” says Neil Munroe, External Affairs Director for Equifax. “This makes it absolutely imperative that, as early as possible, young people understand how best to manage their finances. It is therefore very encouraging to see the work of My Money Week, which aims to help schools teach children more about managing money in a way that is practical and relevant to them.”

More than a third of parents who responded to the recent Equifax research on finances amongst young people, believe that their children have a good understanding of the value of money. But almost the same number think this is not the case. When it comes to children’s understanding of money management, 73% of parents said they felt their own parents’ attitude to money and finances had influenced how they now manage their finances.

“Clearly the right attitude about money management starts at home” continued Neil Munroe. “But we believe the school curriculum can play a very important role in preparing young people for the challenges of the 21st century. And that includes being in control of their finances and managing debts more effectively than the generation before them.”