Friday, November 21, 2014

Youth Financial Literacy & Entrepreneurship: Watching Seeds Grow

When we consider education, we focus on our children being well-read, able to figure out the area of a triangle, knowing who won the Civil War, and knowing what Ag stands for on a periodic table.  We provide little formal education on how to make money and what to do with that money once you have it.  But as a former business education teacher and a parent, I’d argue that financial literacy is just as important to our children’s success.  Or least, for us to successfully get them out of our house as functional, independent adults (the whole goal of parenthood, right?)

What I learned about money (at least before I went to college and actually majored in finance) was from my parents, with money earned through part-time jobs and allowance.  As a teenager, I babysat.  Many of my girlfriends did the same; the guys cut grass and shoveled snow.  We told people we were available to do the work, decided the fee, did the work, collected payment, and figured out what to do with all that money.  We didn’t think about it then, but these tasks are the essentials of being an entrepreneur.  I’ve reviewed the same steps with my little group who are involved in one of the largest youth business operations around – my Girl Scout troop and their cookies.

Watching Seeds Grow is a guide about entrepreneurship for young people written by son and father, Keith Greer and Peter Greer (President & CEO of HOPE International), which offers simple, easy-to-understand lessons for youth about financial management.

The book opens with a few stories of youthful entrepreneurship, starting with Keith’s (the son) haphazard beginning in business, selling beans in a Rwandan market when he came across a few handfuls of leftover beans.  The stories highlight product-related businesses (beans, candles, tacos, donuts), but children should also be reminded that service-related endeavors, such as tutoring, shoveling snow, and painting friends’ nails, also require the same steps.

The second part of the book lists for parents ten steps of entrepreneurship.  Even for the child who has no interest in running their own business, they are important lessons which can be scaled to the appropriate age: understanding finance and the concepts of hard work, ownership, investment, and generosity.

For instance, Step 2: Start a Savings Account.  For the youngest child, the parent can begin this lesson with a simple bank at home – a jar, a plastic piggy bank, an envelope – and the discussion of putting away a little bit of whatever money the child gets for birthdays or holidays or A’s on the report card to save for the future.  Perhaps start with a tangible goal, like a particular toy or activity that’s relatively expensive, but reasonable.  As the child gets older, you can discuss more about short-term (that new iPhone) and long-term (college) savings goals.  Additionally, as the child gets older, parents can introduce them to the process of putting their money in the bank and earning interest (even if it is just a little bit), and then later the concept of investing (Greer’s Step 6).

An interesting parenting issue which Greer includes in the discussion on teaching children the value of hard work, is the debate about allowance.  Should allowance be tied to chores or other required activities or should it be given, no strings attached?  Greer suggests that by relating allowance to chores, parents teach children the concept of working for their money. Parents might even offer the opportunity to do additional chores to make a few more dollars.

The last section of the book is worksheets for the child who is considering their own business, even as simple as their own lemonade stand.  Applying the ten steps of entrepreneurship, the worksheets lead the child and parent through developing a business concept, considering expenses and setting a price, planning marketing and promotions, and selling the product.

Watching Seeds Grow is an easy-to-read guide which breaks down information about financial management into tangible, actionable steps for the young entrepreneur, the kid working a part-time job, or the kid getting an allowance for taking out the trash.

Peter and Keith Greer, Authors of Watching Seeds Grow

A complimentary copy of Watching Seeds Grow was provided for review; all opinions and comments are my own.

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