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Empowering today’s youth
Do you want your kids to be employees or employers? Cameron Herold thinks you should take advantage of the opportunity to teach your kids how to become employers.
I recently watched a TED talk from Cameron Herold titled “Lets Raise Kids to be Entrepreneurs.” Herold is a father of two and was COO of 1-800-GOT-JUNK, before he moved onto mentoring young entrepreneurs in his business, BackPocket. In the video he shares many of the business he has had throughout his life and the lessons he learned from each. For example, starting at age 7 he collected wire coat hangers from the neighbors, then sold them back to dry cleaners for the negotiated price of 3.5¢ each.
One of the valuable suggestions is to not give your kids a regular allowance. Herold says kids can start to become dependent on a regular paycheck. As Herold points out, entrepreneurs don’t get a regular paycheck; therefore entrepreneurial kids shouldn’t get a paycheck in the form of allowance either. Instead, he recommends that kids look for things that need to be done around the house or yard and then negotiate a price for their labor. That way they are looking for opportunities to make money, an essential skill of an entrepreneur. They’ll also practice negotiation, which, in his personal experience, earned him an extra half cent per hanger.
Herold says his kids have two piggy banks, one for saving and one for spending. I would suggest adding a ‘share’ piggy bank. If your kids don’t have a piggy bank, help them make one. Save a shoe box, coffee can, or oatmeal tub. Use construction paper, scissors and glue to decorate your new budgeting tool.
The key takeaways
The main lesson here is the importance of teaching your kids about money at a young age. Herold has some excellent nontraditional ideas, so please consider what is right for your family. There are many benefits to regular allowance too, such as budgeting. The regularity can help them plan savings goals and track how much they are spending. Whatever form your money lessons take, here are a few tips to help make it valuable:
- Set ground rules, and stick to them.
- Be consistent. Whether it is how you negotiate or a consistent schedule.
- Talk to your kids about money and let them help make the decisions.
- Use annual reviews to track your progress and talk about how to earn more money.
Watch Cameron Herold’s 20 minute video here:
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