Raising Cash Smart Kids

Following on from last week’s conversation about “helicopter parenting”, I was thinking about some of the other, unintended consequences of pouring so much energy and effort into making life easier for our kids.

Kids are far more savvy than most of us give them credit for. If their parents are running themselves into the ground, pouring all their energy and focus into providing every possible opportunity and advantage for their kids, the kids know that they are darned-well expected to return that investment in the form of material success – getting good marks, getting into the right college, getting a good job, even marrying the right kind of spouse.

The more effort the parents put into their kids at the cost of pursuing their own interests and dreams, the more pressure the kids feel to follow the path their parents have laid out for them, whether or not that path is a good fit for them.

Even when the path is a good fit, and the young person would have chosen it of their own volition, pressure to perform can leach the joy and self-expression out of what might otherwise have been a satisfying and fulfilling career.

Kids can feel this pressure in their business activities, as much as in their schooling.

If you are encouraging your kids to branch out into business, or they have started of their own accord and you are supporting them, it is vitally important that you, the parent, do not get focused on results and accomplishment.

The greatest value from running a business is not the income, or the accolades, or the value it adds to a resume. The greatest value from any business journey is the fabulous growth and learning opportunities which arise from the journey – and the confidence and self-reliance that result from making use of those learning opportunities.

Just as your child can benefit from a few years of ballet training, even if he or she doesn’t ever progress beyond the end-of-year concert at the local church hall, because of the habits of good posture, grace, and core strength it develops, your child can benefit from a few years of running a business, even if that business never makes more than nickels and dimes.

Focusing on the journey, and the lessons learned along the way, will free your child from the burden of parental expectations, and allow him or her to blossom according to their own design. It is this freedom which the children of helicopter parents do not have, and it is this freedom which we yearn for when we look back to the time when kids were left to be kids while parents got on with their lives.

Our kids can have the best of both worlds – interested, involved, protective parents and the freedom to make their own choices and learn from their own mistakes. As long as parents are aware of the downsides of anxious hovering, parents can curb their tendencies to overprotect and work on checking the training wheels and then letting go.

Photo: carf

PR: wait… I: wait… L: wait… LD: wait… I: wait… wait…

Ben Casnocha posted an interesting link on his blog last week, to an essay by Joseph Epstein. Epstein is a university professor, and in his essay he was reflecting on the shift in parenting styles among middle-class parents, and the effect of that shift on the behaviour and attitudes of the “Millennials”, or Generation Y – the kids currently in high school, college, and up to about age 25.

Those kids have grown up with an unprecedented level of parental attention and involvement, and they continue to expect a high level of attention, praise and affirmation from other adults as they enter college and the workplace.

Epstein’s observations echoed those in that fabulous ode to the kids of the 50s, 60s, and 70s – the kids of yesteryear who had lead-based paint on their toys, rode in the back of station wagons without seat belts, and went out to play on the weekends – unsupervised – without a mobile phone or any expectation that they would be dropped off, picked up, or in communication between leaving home after breakfast and returning at sunset.

Epstein’s essay also evoked a longing for those simpler times, when parents were just parents, and weren’t expected to also be their kids’ chauffeur, best friend, counsellor, performance coach, careers advisor, and lender-of-first-resort. Back before the advent of encounter groups and “inner child work”, kids got on with their lives and adults got on with theirs.

I’m not advocating a return to that lifestyle – there were some major disadvantages to living in families which simply never discussed or acknowledged emotions.

One advantage of those times, however, could be reclaimed.

We could return to thinking of kids as capable.

The pendulum has swung so far in the direction of protecting and nurturing kids that there is a reasonably widespread phenomenon called “helicopter parenting”. This refers to the form of anxious hovering and over-helping which flowers, in the fullness of time, with parents phoning their college-aged kids who are living in dorms to wake them each morning so they are not late for class.

The message kids get from this type of parenting is not that they are loved and respected. The message they get is that they are incapable, and that the world is too much for them to handle on their own.

One of the greatest benefits to my kids from their business activity is the sense it gives them of being capable – of being able to do adult tasks in way that adults respect and acknowledge.

Business activity also breeds emotional resilience. Kids who have active businesses have all tried things that didn’t work out, processed the disappointment, and moved on to try something else. In most cases, they get accolades for trying, whether or not they ever make much money.

Who is better placed for a life of accomplishment – the child who has tackled adult challenges, and learned that failure and disappointment are part of life, and part of the process, or the child who believes they are incapable of getting out of bed without outside assistance?

Image: silver.and.gold

PR: wait… I: wait… L: wait… LD: wait… I: wait… wait…

Alexa Kitchen became the world’s youngest professional cartoonist at the age of five. Alexa Kitchen, age 8, promoting her book Drawing Comics Is Easy (Except When It’s Hard), Alexa Kitchen cartoons, Alexa Kitchen photos.

Molin Upper Elementary School Principal Dave Archambault asked faculty and the business community a simple question: “What happens when you inspire more than 75 fifth-grade students to create an invention or new business idea?”

On Friday, Archambault was pleased with the answer.

“This is great — we have a lot of great ideas,” Archambault said.

From eyeglasses fitted with windshield wipers to clear one’s view in a rainstorm to a “sweet flavored gum” that was claimed to have the ability to bring about world peace, the second annual Young Entrepreneurs Contest showcased students’ creativity.

The contest, sponsored by the Newburyport Education and Business Coalition as well as teachers Ellie Bailey, Mary Ann Daley and Carol Snow, included special exercises for students to go along with teaching students about business and sociology.

David Strand, president and owner of Strand Marketing, was brought into the Molin School to assist in creating and presenting the ideas that inspired entrepreneurship and encourage fifth-graders to come up with their own ideas about business.

Read the rest of the story in The Newburyport News.

I love hearing about initiatives such as these.

Gradually, ever so gradually, the traditional education system is being infiltrated by little bursts of entrepreneurial spirit.

These kids participated in simulations, where some of them played the role of bankers, some the rols of suppliers, and others represented retailers. Once a supplier had “won” the business of a retailer, the young retail entrepreneurs then had to persuade the bankers to finance their purchase of the stock.

These simulations are a fantastic way to provide kids with a solid learning experience when it comes to business concepts. We encourage the families in our Cash-Smart Kids program to engage their kids with “mini” business situations and simulations whenever possible.

Kids are remarkably creative – I loved the description of one young inventor’s product, the “my-Cod”. This fish-shaped contraption would allow swimmers to listen to their iPods through a swimming “fish” broadcasting when placed in a swimming pool.

I really think that one would be a goer!

Companies are always on the lookout for new customers, and they know that the younger they can get a consumer, the more likely they are to keep them for a long time. Particularly worrying for parents these days is the way cell phone and credit card providers are targeting teens.

Even debit cards can cause problems – my fourteen-year-old saves half of her earnings religiously into a high interest account. Once she had a debit card, though, and was being paid by direct deposit, she found that she had overspent her budget without realising, and didn’t have the full amount left that she had meant to transfer into her savings account.

Cell phones just chew through money, a few cents here and a few cents there for text messages or listening to voicemails, and suddenly the bill is enormous, or the prepaid card runs out long before the end of the month.

Credit cards are the worst of all, because it is so easy to build up a debt that you can’t repay all at once, and the interest rates on those things are so high it’s amazing they are legal. Once you get behind, you just get further and further behind.

Load up a high school or college kid with a cell phone and a credit card or two, and you can undermine the foundations of their financial life completely.

Student loans are bad enough, but many kids just shrug and add a bit of credit card debt on top, figuring “in for a penny, in for a pound”. We live in an instant gratification society.

Credit cards have become a fact of life on college campuses. With a reported $13 billion in discretionary income, college students represent a huge market for credit card companies (Kara, Kaynak, & Kucukemiroglu, 1994). Students often receive incentives, such as t-shirts or mugs, to apply for cards, and requirements, such as previous credit history, are often waived (Kara et al, 1994). Due in large part to these marketing efforts, a recent study reported that approximately 70 percent of college students possess at least one credit card–a number much higher than previously thought (Manning, 1999), while another study reported that 93 percent of college seniors have acquired at least one card (Markovich & DeVaney, 1997).

With companies lining up to seduce our kids into debt, the only protection we can offer them is a good, solid financial education, and a grounding in good money habits.

Images by PT, The Consumerist and B Francina.

Divyank Turakhia, of Mumbai (Bombay), India, started internet consulting at the age of 14, and started his domain registration and site-building company two years later with $600 borrowed from his parents….

British designer Romero Bryan started designing clothes at the age of thirteen. In 2003 he was listed number 5 on the Bank of Scotland Rich List 2020, with the prediction that he would be worth 30 million pounds by then.

Dominic McVey started importing motorised scooters to the UK at the age of 13, earning an estimated fifteen million pounds by the time he was fifteen.

Donny Ouyang, of British Columbia, Canada, built several successful internet businesses before turning sixteen. His ventures, which include kinkarso.com, christianavenue.org, battleforums.com, and live.tv.ws,…

Shropshire teenager Louis Barnett, like many successful people, struggled at school. At the age of 11 he was diagnosed with dyslexia and dyspraxia in combination with a high IQ, and withdrawn from the…