OUR MONTESSORI FAMILY–HELPING CHILDREN LEARN ABOUT FINANCES AND MONEY: THE CHILD’S FIRST BUSINESS

As we talk about finances this month we, of course, need to cover one of my favourite topics: children and entrepreneurship. Lemonade stands, lawn mowing, dog walking, baking, and so many more. My first job was baby-sitting at 12; what was yours? I bet it was probably something entrepreneurial. *Before continuing, depending on where you live, you may need to file for a permit, a license, or there may be other legal requirements for your child’s business. How the times have changed, haha.

Businesses are such a great way to learn about a different aspects of finances. There is so much more to learn when earning money through a business versus an allowance from your parents/grown-ups. While some parts of personal finance and business finances may be similar, there are additional prospects to consider, like taxes. However, we don’t want to burden the child with too much information, so you may want to be mindful of how deep you go into business finances (I know many adults who still find the tax side to be rather daunting; I know I sure feel that way at times). As with personal finances, business finance knowledge can begin with he child’s interests and built upon. Start simple and with the basics.

Take lawn mowing for instance. You mow a lawn and get paid, that’s the basic idea. But that’s not all. Money needs to be set aside for lawn mower maintenance and gasoline. To be safe, we’d put aside 25% for taxes. (Financial coach tip: talk to a tax professional as your child may be eligible to set-up a retirement account (yay, for a Roth IRA). Many don’t know this is a possibility, but it only applies to earned income–allowance not included, according to many professionals.)

A banking account should be opened with separate shares for taxes, savings, and expenses (a few months worth saved).

With T, at 10, it would be appropriate to talk about services and how much should be charged. What amount needs to be set aside for maintenance or rental, how much is 25% for taxes, and how much we should keep aside for emergencies (a few months).

When it comes to how much a child should charge, please don’t allow them to be taken advantage of. I know we pay a little more than others would to have a neighbourhood child mow our lawn because we’ve heard negative comments about it, “You pay a kid ___to mow your lawn?!” Absolutely! He’s not just “a kid,” he’s turned his service into a business. He does an amazing job and deserves to be paid accordingly. Please, do not take advantage of someone just due to their age or allow this to be done to your child. It’s highly disrespectful and just plain wrong. The only reason he doesn’t earn the same as our neighbour’s provider is because he doesn’t have employees, the same overhead (insurance and the like), or do the exact same service (weed whacking and edging). Keep this in mind when you and your child are deciding on prices. To some children a dollar is a lot of money, but they are worth more than that if they are mowing a lawn that takes them an hour. Their product is worth more if they are juicing the lemons by hand versus stirring a mix with water. So please make sure they and their time is respected and charge accordingly. (Thank you for attending my Ted Talk.)

In expanding upon their business and turning it into different homeschooling lessons, it can include studying marketing (art/science–studying the psychology behind marketing, some parts more for the second plan child and older) and advertising (here’s a really great handout on how to deconstruct print advertisement–while some questions may be made appropriate for younger children, it’s more for the second plane child and older). And lets not forget about customer service (practical life: grace and curtesy).

If your child’s gift and business is baking, there are so many enjoyable math lessons to be had.

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