Teaching Kids About Earning Money
At some point in most every child’s life, he or she will attempt to make money in some way. From a roadside lemonade stand to shoveling the neighbor’s walk in the snow, children naturally seek out opportunities to make money. These opportunities can be cultivated, and every child can learn how to be an effective salesperson through the teaching of a few easy lessons.
The Value of Money
Obviously, if a kid is to be successful in selling items and making money, they first need to recognize the value of money. This can be taught to kids in a variety of ways. Anytime children recognize that in order to get something they have to give in return, they begin to understand the reciprocal nature of finances. Whether it is having a chore list that needs to be completed in order to earn an allowance or the ability to earn money for achieving certain grades, children learn through these experiences. In fact, it is recommended that children begin earning an allowance as early as age three. In this way, money begins to be appreciated as something that must be earned.
After learning about the value of money, the next logical step is teaching children to be accountable for the spending of that money. One method to help children learn this responsibility is to teach them that spend, save, give, and invest are the four uses of money. Likewise, it is helpful to help children recognize the importance of a budget. Open a bank account with a child, let them complete the physical act of paying for groceries at the store, or play bank or store at home. Doing these activities will help children recognize fiscal responsibility and help to assure these children are not one of the two in five adults that do not understand personal finance.
After the financial groundwork has been laid, children should be taught to recognize the opportunity to make money. Begin teaching children how to do this by having a dialogue with them about the money they earn at home. Instead of just assigning chores to children, insist that they come up with potential problems (for example, too many leaves in the yard) that they can help solve (rake the leaves). Extend this further to have children brainstorm potential business opportunities. Whether the artistic child decides to make jewelry or the tidy children recognizes the ability to organize sheds, children should learn to create opportunities to sell based on skills and needs.
Once the opportunity has been recognized, children should be taught to set goals for their business. After having learnt the importance of money, children are better capable of setting these goals themselves. Maybe the child wants to go on a trip with the French Club to Paris or to save enough money to afford his own car. Once these goals are recognized, the scope of the business can be set, and children can set goals.
More Family Finance: