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.