Last weekend my wife and I browsed a local farmers market. At one stall, Kris found a necklace that she loved. “Will you buy this for my birthday?” she asked. When I learned that the necklace in question had been hand-made by a 14-year-old girl, and that this was how she was raising money for college, the deal was sealed.
This young woman is making money from her hobby. She’s also helping her parents to know whether they should provide financial support for college. (My guess: seeing how industrious this girl is, they’ll be happy to help with what they can.)
I am a sucker for kids selling things. It’s not just that I think it’s cute — I also like to reinforce positive behavior. Developing the courage to sell cookies or lemonade or magazine subscriptions or jewelry is an excellent thing. It’s one of the best ways to teach children the nature of money (and valuable social skills).
Connie Proulx, of Lafayette, Colo., sent her 13-year-old daughter, Elaine, to Money $ense, a day camp operated by the nonprofit Young Americans Center for Financial Education (www.yacenter.org), in Denver. Elaine also attended the center’s Be Your Own Boss camp and now runs a small jewelry-making business. She has put some of her money into a certificate of deposit and contributes a portion of her business profits to charity. “All my friends talk about how they’ll work for her one day,” says Connie.
The center has two five-day finance camps: Money $ense, starting in late July, is for kids who’ve finished sixth or seventh grade and covers budgeting, investing, credit and taxes. Junior Money Matters, in late June and early July, is for youngsters just out of second or third grade. The younger children learn the history of money and play games, such as banking bingo. Everyone spends time running the center’s mock town. Each camp costs $175 per child, and sessions are held at facilities in Denver and Lakewood, Colo.
For teens 15 and older, there’s Finance Challenge Camp at Westminster College, in Salt Lake City. The one-week session, which runs from July 9 to July 15, costs $600 — or close to $1,000 including airfare. Find more finance camps at www.mysummercamps.com and www.campchannel.com.
Why is it so important to instill good money sense in kids? Take a look at Scott Burns’ simple recipe to become a millionaire:
- Work four summers, starting at age 16.
- Save the income in a Roth IRA account.
- Invest in a simple, low-cost equity portfolio.
- Simmer slowly for 47 years.
- Serve ungarnished (and untaxed) at age 67.
I love this advice. It demonstrates again how compound returns favor the young. If you are in high school — or college — resist the urge to party with your peers. If you can exercise the mental fortitude to save money for just a few years, you can practically guarantee comfort in your retirement. A short burst of dedication in your youth can prevent an adulthood of struggle. (A Kiplinger article outlines six steps to becoming your own boss, a sort of how-to guide for young entrepreneurs.)
Get Rich Slowly hasn’t covered entrepreneurship much yet, but it’s an important aspect of personal finance, one I plan to write about more in the future. It has been demonstrated repeatedly that going into business for yourself is one of the best ways to provide for your future. There are many books available on this subject (The Millionaire Maker is a recent popular example). Ramit Sethi’s I Will Teach You to Be Rich frequently covers entrepreneurship.