Are your children learning the money skills they need to succeed in life? Did you know that according to Forbes magazine a large percentage of teens believe that they will make an average starting salary of $154,000 per year? It’s no surprise that the higher their expected salary the less likely they see the need to manage it. So how do we impress good money skills on our emerging adults in a way they will hear?
Many parents assume the school system is teaching our children the money skills they need, yet only 5 states require a financial literacy course for graduation in America. Even homeschool families often overlook this subject and curriculum lists rarely include this critical life skill.
It doesn’t appear parents are bridging the gap at home, either. Only 5% of teens surveyed said their parents have taught them any financial skills. The top three reasons parents gave for this were:
1. Lack of time
2. Lack of knowledge
3. Lack of confidence to teach what they don’t practice
How Can We Impart Financial Wisdom To Our Emerging Adults?
A job can teach teens money skills, but typically the money earned from these jobs burn a hole in their pocket.
Some parents wisely stress the “give some, save some, spend some” philosophy. This is a great start right now, but as you know, it won’t carry you through most of life’s financial challenges.
The Value of Entrepreneurial Education
Entrepreneurship offers a hands-on approach that brings the importance of good money habits home. Running a business is unique in its ability to effectively impress reasons and methods for managing their income.
Budgeting, giving & saving, creative sourcing, bargaining, sales ability, record keeping, public speaking, critical thinking and problem solving are just some of the skills that a teen can learn from running a business.
Our children can read about money management, watch YouTube videos, even take a consumer education class, but we know that experience is the best teacher. We can urge our teens to save for a rainy day, but entrepreneurship can teach the hard lesson of WHY. The finer points of financial literacy can be learned from a book but become relevant once they have experienced the realities of income and outgo from their own business!
Can I Teach Entrepreneurship If I’ve Never Had a Business?
Parents, you don’t need to have business experience to get started. Learning alongside your teen is a great family project and a great excuse for spending time together. Thanks to the internet, there is a wealth of free information available to get you started.
Teach Them Values Not Materialism
Some parents fear that young entrepreneurs are learning materialism. Think about it. This may be the only time that your emerging adult will hear that business is more than profit or loss. You’ll have the chance to stress the importance of offering superior value, honest advertising, being a fair employer, giving back to the community and other values rapidly disappearing from the marketplace.
Even if they have no intention of ever having their own business, they’ll learn many other life skills. And they’ll be equipped if by chance they change their mind!
Entrepreneurship Makes Better Employees
Understanding an owner’s side of the business will help them be better employees and consumers. Teens that have run a business have a better sense of working for the betterment of who they work for, rather than simply punching a clock.
Sole entrepreneurs and small businesses are credited with our country’s economic success boasting the production of over 50% of both our GNP and US jobs, yet a whopping 80% of small businesses fail within 18 months. You can help your young adult avoid failure by learning what it really takes to be a successful entrepreneur. When teens run their own business they discover it can be glorious, exhausting, exhilarating, frustrating, and even profitable – when managed right.
Entrepreneurship is more than another boring class in school that is soon forgotten and will show your teen how subjects like Money Skills, Math and English are relevant in everyday life. It also looks great on a resume or college application!
In the coming weeks we’ll be going over how you can teach 5 practical money skills with simple entrepreneurial projects you can do at home – without starting a business! We’ll also include some great online resources we’ve found along the way!
You’ve got me thinking. How much input did you give, as a parent, into what type of business your child started?
That’s a loaded question! I always wanted my kids to make many of the decisions, but the amount of input really depends on their age and maturity. Obviously, if they want to start a rock band to make money may not be practical, but if they love music, they could give lessons.
We would always try to praise them as they used their gifts and things they were good at as well as do what we could to help them improve in it. A cake decorating class, an apprenticeship with a repair or lawn service are all ideas to refine their skills.
We would always create a very simple business plan with them to make sure their business idea was both needed and potentially profitable. Instead of their parents telling them their idea won’t work, they’ll see on paper that it was a good idea or wasn’t worth the investment.
Finally, making it a school project will give you more input and will help you offer structure to their attempts. Remind them that failure isn’t bad if you can learn from it, but rushing into a venture blindly isn’t wise and often leads to failure of even the best ideas.
Hope this helps! Good luck!
I can’t wait to see the resources for teens.