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When we look at our kids, we don’t typically think of them as mini business moguls. But maybe we should. After all, children are naturally smart about money; it doesn’t take them long to figure out that the world is full of things they want and that many of those things include a price tag. Where parents often struggle is in balancing providing for their children with teaching them how to provide for themselves. Rather than just giving them the money to buy whatever their little hearts’ desire, some parents might be surprised to learn that the answer may be teaching them how to earn it—and starting young.
At least that’s what Gail Haynes, author of The Lemonade Stand Millionaire: A Parent’s Guide to Encouraging the Entrepreneurial Spirit in Your Kids, believes. In fact, she suggests that teaching and encouraging entrepreneurship in kids right from the get-go is part of a sound financial education.
Don’t worry—we’re not talking about a hard-driving campaign to make your toddler the next Mark Zuckerberg. Instead, it’s about helping kids build the confidence to do anything, no matter where their interests lead them into adulthood; and, ensuring they have the money skills to keep them from landing where so many adults have fallen before: broke, in debt and out of options.
Why should you nurture little entrepreneurs? Here are a few key reasons why it’s fundamental to any child’s financial education:
You’d be hard pressed to accuse any kid of a lack of creativity. Just try asking a group of kindergarteners for business ideas. Chances are you’ll get some silly ideas, some surprisingly good ones, and of course, some totally outlandish suggestions. But no matter what that group of kids comes up with, you can bet that they will be so totally into their ideas, they will barely be able to contain themselves. Now, think if you asked adults the same question. Not exactly the same kind of enthusiasm.
‘With entrepreneurship, it really is about nurturing creativity,’ Haynes said. ‘When your kids come to you with business ideas, even if they sound totally impossible, talking to them about what they love about that idea and encouraging them is important. Thankfully for all the things in our world today, at least somebody at one point believed they were possible.’
With all the things you have to painstakingly teach kids to do, creativity is one key life skill you can sit back and allow to unfold. According to Haynes, encourage those creative ideas and help kids develop the confidence to turn them into something more.
Haynes’ financial philosophy sprung from her own experience when she suddenly became a single parent, leaving her and her kids in a very tough financial spot.
‘I realized that even though I had my own business and worked hard, I didn’t do smart things with my money. I didn’t want my kids to find themselves in the same financial position. We were literally heating our house with a wood stove and living by candlelight. It was not a fun time. So I started to teach them about what they could do,’ Haynes said.
What she found is that the more she taught her kids about how they could earn money and spend it wisely, the more they looked for ways to do it. In other words, understanding how money works may help kids develop the sense of ambition it takes to earn, save and invest it in the future.
‘They started thinking about what they could do to earn money. That turned to lemonade stands and then when they were ages 7 and 9, they started their own business selling rabbits.’ (A business that is still thriving—and debt free—more than seven years later.)
3. Money Management
So how exactly does Haynes encourage the business drive in her kids? To start, she treats them a lot like adults. They do chores, they negotiate jobs around the house, and if they complete all the work they’ve agreed to do, they get ‘a paycheque.’
‘I call it a paycheque, not an allowance,’ Haynes said.
That, in itself, according to Haynes, encourages kids to look for ways to earn money, rather than just asking for it. As an extension, Haynes believes that some kids will follow this with a natural desire to be entrepreneurial, such as through a lemonade stand or mowing the neighbour’s lawn.
For more reasons why you should nurture the entrepreneur in your kid, click here.
Think back to before you were a mom. Remember how you’d purchase a latte or a new pair of shoes without batting an eye? How you used to grab drinks after work without feeling guilty about your self-indulgent spending? You probably never thought twice about simple purchases like these, so why are you punishing yourself for even considering them now?
According to a recent survey by BabyCenter of more than 3,000 moms, women are encountering increasing amounts of money anxiety after giving birth. This includes an overwhelming fear of guilt about spending and apprehension over improper saving habits.
Granted, raising kids can be extremely expensive. As such, it makes sense for new moms to have their minds on their money and their money on their minds. However, many moms are reporting that their money anxiety is interfering with their emotional health.
If your bundle of joy is making it virtually impossible to banish money stress, rest assured you’re not alone. Here are a handful of issues that were uncovered by the BabyCenter study, as well as some tips to help alleviate your penny pinching obsession.
1. Feeling guilty about personal purchases
According to the BabyCenter study, more than 57 percent of new moms feel guilty when they spend money on themselves. The source of this anxiety is threefold: first, as a new mom, you’re still adjusting to the fact that you’re no longer your number one concern. Second, you probably have less money now that you’re a mom; and third, you’re still struggling to adjust your finances to handle a growing family. These factors combine to create an overwhelming sense of fear when it comes to spending money, even on the smallest of personal purchases.
Having a baby is certainly a financial shock for any family; however, your new addition doesn’t have to blow your budget completely off course. Sit down with your spouse or a trusted family member and seriously sort out your financial responsibilities. While you’re at it, build in some spending for yourself. Try and set some money aside to spend on “extras” including entertainment, shopping, and that morning latte. It’s always easier to spend on yourself when it’s a planned purchase, so don’t be hard on yourself. If there’s room in the budget, give yourself a salary. You’ll more than deserve it!
2. Obsessing about spending on baby
While moms are hesitant about spending on themselves, they apparently have no problem splurging on the newest edition to their family. Stats from the BabyCenter study found that 90 percent of moms are more likely to purchase something for their child than for themselves. What’s more, mommies tend to spend 61 percent more on their child’s clothing than on their own.
Spending money on your new child isn’t just fun, it also gives moms the high of shopping without the guilt of spending on personal items. What’s worse, it’s easier to rationalize a purchase for your child if it’s a toy or gadget that might build her brain or make her laugh.
Moms often find themselves living in a child-centric, materialistic society that’s constantly pushing parents to buy, buy, buy. Failure to live up to this standard often leaves moms feeling as though they’ve failed as a nurturer. On the flipside, if you’re constantly overindulging your children, they’ll never learn the true value of money.
When it comes to curbing spending on your kids, it pays to learn the power of saying ‘no.’ This will not only teach your children how to tolerate not getting everything they want, but it will also help you to avoid irresponsible spending decisions.
3. Money makes being a parent easier
Many moms feel that having money—and more of it—is a necessity for raising kids. In fact, 68 percent of moms that responded to the BabyCenter survey felt that having money made parenting easier. Close to 62 percent also felt that they needed more money in order to feel secure about their child’s future.
From daycare to healthcare and higher education, raising a baby through to adulthood can cost hundreds of thousands of dollars. As such, it’s crucial to have a long-term financial plan. This might include making some hard decisions concerning your lifestyle. Ask yourself, what’s more important: living in a big house, paying off your student debt or growing your family? Sometimes opting to live a simpler life is all it takes to better care for your children.
Mom needs a splurge, too
Moms don’t have to be misers. Take the time to manage your family finances in a responsible but relaxed manner. Splurging every now and again, both on yourself and your new baby, is perfectly acceptable. After all, what’s good for mommy is often what’s good for baby, too!