Is an allowance a good teaching tool or is it ultimately limiting for children?
I have been rattling this question around in my brain for the last few months. I have several big concerns around giving kids an allowance. My first concern is that by tying allowance to the completion of menial, repetitive, and monotonous tasks, we train kids to be card carrying members of the rat race. Yet, If we do not attach allowance to any effort on behalf of the child I think this breeds laziness and a sense of entitlement. I also wonder if by providing an allowance, it limits kid's creativity when trying to figure out how to create cash-flow.
Conversely, I definitely see some benefit to providing children with an allowance. If you gave your children a flat rate at regular intervals you could use this money as an opportunity to teach specific financial lessons. For example, you could give your children a $200 per season allowance which they can only spend on clothing. This will teach kids how to plan and budget. Additionally, if the allowance is tied to some kind of task to be completed this will help kids to understand that they need to work in order to get money and that it isn't just given to them.
After weighing this out I have come to the conclusion that granting children an allowance is not the worst thing you can do, but that it really does not help your child to be innovative and creative. I feel that anything that trains children to be employees erodes creativity and limits a child's initiative. If kids know that they only have to do the dishes and they'll get the money they need to go to the movie - they are less likely to take the initiative and do something unique to earn the money they want. If they can get their immediate desires satisfied by the path of least resistance, then there is no need for them to be creative.
So how do you encourage your child to be a little more creative in how they make their money? Here are some ideas on how you can accomplish just that!
Encourage your children to start a business:
When I was a kid, two other girls and I started a driveway sweeping business. For $5 we would sweep your driveway. Our real stroke of brilliance was that we, three adorable little girls, would appear on your doorstep and rap: "We are the driveway Sweeping Team. We'll sweep your driveway nice and clean!" I believe that we even had a little dance number that went with it . . . but I digress. My point is we took the initiative to assess the needs in our neighborhood (dirty driveways) create a sales pitch (our rap) and provided a service (we swept the driveways). This resulted in us making a killing in exchange for a little effort and entertainment.
Having your kids start a business doesn't have to be an expensive, complicated, and time consuming activity. It can be as simple as discussing needs in the community, suggesting how the needs can be met and then encouraging kids to go out and meet those needs - for a fee of course!
If your child is interested in starting a business and you would like a little more guidance as to how to help them do that - see TrueSmarts' Advanced Kids Business activity, for some worksheets which will help your child get the creative juices and cash flowing!
Teach your children that there is always a way to make the money they need:
In later life it will be very comforting for your children to have an arsenal of techniques to make money. I am thinking of when your child is a young adult starting out, living on oatmeal and apples and trying to figure out how to balance the things they want against what they can afford. Teach your kids that they can always afford the things they want by showing them there is always a way to make money.
Showing your kids different ways to make money could be as simple as teaching them to turn in their pop bottles - or collect the neighbor's pop bottles and return them. Collecting spare change whenever they find it, rolling it and taking it in to exchange for bills and so on.
Or it could be a little more complicated, teach them to make extra money off of their particular skills and talents. For example, your son or daughter is a talented artist - they could make a couple dollars selling their art or drawing portraits. Or your son or daughter is really good at Math, Science or English they could make money tutoring other kids. There are a ton of ways that kids can use their talents to make money. By encouraging them to think this way you will be demonstrating to them that they will always be able to make the money they need to get the things they want.
Teach your kids to be smart consumers and save their money when they can:
A key aspect to always having enough money is being a smart consumer and learning how to save money when you purchase products. Being a smart consumer means that you have an eye for a bargain, you shop around, you research brands, analyze best value for dollar, and you are always looking for ways to save money on the things that you buy. This is a valuable skill to teach your kids as the secret to wealth is not just how much money you bring in, but how well you use the money that you have.
Show kids that if they do a little research, are a little patient and make a little effort they will need less money to buy the things they want and they will have more money left over for future purchases - or better yet savings!
Some ways that kids could save money could include looking for group deals on sites like groupon.com or livsocial.com - often you can get products or services for 50%-70% off. Also encourage kids to shop second hand or where possible at dollar stores. Show kids where to find coupons (either online or in the newspaper) and also demonstrate that the price of a product usually drops after it has been on the market for a little while.
Teach your kids to get their money to work for them:
It never hurts to teach your kids about investing at an early age. An investment could be in stocks and bonds and the like, but it could also be about putting money into things that will increase in value or into a small business that will bring them a profit. Essentially you want to teach your kids how to put a little money in, to get a lot of money back. This will allow your future adults to work smart, not hard!
If you choose to teach your kids about the stock market be open about how and why you invest. Show your children what you are investing in and why as well as how you chose your investments. Show your kids statements from your investments which demonstrate how they increase in value. If they show an interest in and an aptitude for investing in stocks direct them to Wall Street Survivor. This is an investing simulation game where kids are given $100,000 in virtual cash to invest. This site is also jam packed with educational resources. You and your child could both set up an account and compete to see who can turn the biggest virtual profit.
Another way you can teach kids to invest is by showing them how to put money into something so as to increase their profit. For example, if they are going to start a business tutoring people in computer repair, they should invest some money into their education (books, a subscription to Lynda.com, a class etc). The education increases the value of their service and will help them turn a profit.
They could also put money into materials for a business they are starting, maybe a gumball machine, to again increase or create cash flow. Direct your children to the Rich Kid Smart Kid website for a computer game called Reno's Debt Dilemma, it gives a great visual demonstration about good debt (investment), and bad debt (loss). Don't missout on the resources for kids and teens k-12 in the "Grown Ups" section of the Rich Kid Smart Kid website there are all kinds of educational goodies in there.
Money is a very powerful motivator, attitude shaper and teaching tool. When considering an allowance it is important to consider what attitudes, outlooks and lessons you would like to pass on to your child. Once you have prioritized the important skills, provide an allowance in a hybrid approach. Encourage kids to find interesting ways to create cash flow which is independent from your wallet, but also provide target specific allowances to teach kids key skills like budgeting and planning.
Edgar Dale originally developed the Cone of Experience in 1969.
Since then, many variations of the cone have been created, but one of our favorites is from Robert Kiyosaki‘s book Financial IQ. Robert's Cone of Learning states that after two weeks we tend to retain:
- 10% of what we read
- 20% of what we hear
- 30% of what we see
- 50% of what we hear and see
- 70% of what we say
- and 90% of what we say and do.
Regardless of the specifics, we intuitively agree with the general premise.
Impact on TrueSmarts:
Because kids and adults alike retain more information when they say and do something, rote learning is practically nonexistent within TrueSmarts' activities.
We believe that it is important that kids get out and do things in order to fully integrate the important financial and business lessons that you are trying to teach. That's why we have aggregated a wide variety of say and do type of activities which you can use to instantly engage your kids and maximize their understanding.
Check them out and start today!
Tags: TrueSmarts Inspiration
Summer is rapidly approaching. The weather is heating up and so is your kid's yearning for the latest summer fashion, gaming device, or technological advancement. It is the perfect time to help your kids start their very own summer business so they earn the money they need to buy the thing(s) they want.
What follows are some great ideas on how to help your child decide what summer business to start, plan for their business, implement their business and then analyze their business for greater success next time.
What Business Should They Start?
Summer offers a myriad of season specific start ups. Some examples could include any type of yard work, lawn mowing, gardening or neighborhood cleanup. Kids have two whole months off from school which opens up possibilities for child care, summer day camps and so on. With the nice weather comes hot opportunities for outdoor events and entertainment. Kids could plan and host an event like an outdoor movie, theatrical production, concert, or a skateboard competition.
Don't neglect the old standby - Lemonade Stands! These can be particularly effective if you get your kids to set their stand up near an outdoor sporting event on a hot day! You could also help your kids to put a new spin on an old favorite. Some ways they could accomplish this include: strapping on some roller-blades and offering a delivery service, offering a 2 for 1 deal or coupon, or giving a portion of their proceeds to charity.
If none of these are to your child's liking then use the Discover Your Business worksheet from TrueSmarts.com's Advanced Kid Business activity. This worksheet will help your child use his or her own interests and talents to devise a start up which is tailor made for your child.
How Should Your Child Plan?
I don't think that you need to sit your child down and make him or her crazy with executive summaries and marketing reports, but it is a great idea to have your child complete a basic plan for his or her business. You can make it as simple as answering the following:
- What are you doing?
- When are you doing it?
- How will you get the materials you need?
- How much will you charge?
A thorough answer to all of the above questions will give your kids the bare bones basics for planning their business.
If you would like your child to do a little more planning for their small business. There is a kid's business planning worksheet in the Advanced Kids Business activity called Plan Your Business. Though simplified, these worksheets will help your child create a complete and comprehensive plan for starting his or her business.
How Should Your Child Analyze The Results?
Once your kids have created and run a small business, take some time to perform a retrospective with them. A retrospective could be as simple as a discussion of how their experience went, whether or not they made a profit, if the experience was what they had anticipated and what they learned or would do differently the next time.
If your kids have started one or two smalls businesses in the past you may want to get a little more involved with the analysis portion of your child's business. Take a look at the Analyze and Improve Your Business section of the Advanced Kids Business activity which includes a simplified excel Balance Sheet and Income Statement. This is a great way for your child to begin thinking about how to maximize his or her profits, decide if there was anything to do differently next time, and reflect on his or her experience.
Reward Their Efforts
Regardless of how successful your kid's business was, you should reward their efforts. Positive feedback is an incredibly powerful reward for kids. A simple, "I am so proud that you started up your own business", goes a very long way!
You could also have a tangible reward. Some ideas for a reward could include: an outing to a favorite restaurant, an afternoon doing a favorite activity, getting to pick the movie on movie night, or you could create a small photo album with pictures from the day they ran their business.
Anything that you can do to create a positive memory around creating a business will drastically increase the likely-hood that your child will try to do it again. If you want to foster the courage, ability, and desire to become an entrepreneur in your children, make sure that you take the time to reward any and all efforts your child makes in this direction.
Every Journey Starts With a Single Step
Starting a summer business is a fantastic way for your kids to learn how to assess neighborhood needs, assess their skills and talents, plan a business, advertise, provide a service, create cash flow, budget, analyze a business, and so much more.
It is also a wonderful way to help your kids to be confident, independent, community minded individuals with the daring to step out and take a risk.
Howard Gardner's theory of multiple intelligences proposes that when you judge someone's level of intelligence you should not base your analysis on one general ability, but on a range of abilities. The intelligences do not exist in a hierarchy, and it is generally considered important for a person to exercise and exhibit a multitude of different intelligences for them to be viewed as talented and well rounded.
The intelligences that Gardner identified are as follows:
This area has to do with logic, abstractions, reasoning and numbers.
This area deals with spatial judgment and the ability to visualize with the mind's eye.
This area has to do with words, spoken or written.
The core elements of the bodily-kinesthetic intelligence are control of one's bodily motions and the capacity to handle objects skillfully.
This area has to do with sensitivity to sounds, rhythms, tones, and music.
This area has to do with interaction with others.
This area has to do with introspection and self-reflective capacities.
This area has to do with nurturing and relating information to one’s natural surroundings.
Why does it matter to us at TrueSmarts?
Multiple intelligence theory is a large part of how we have organized TrueSmarts. We think it is important for children to develop in a variety of different ways in order to be adaptable, flexible and well rounded.
There are other advantages to approaching your child's learning from the multiple intelligences vantage point. For instance, if you teach your child in a way that appeals to a dominant intelligence it will help to hold a child's attention. Conversely, teaching a lesson in a way that exercises a weaker intelligence helps a child to stay challenged and to be more flexible and well rounded.
Additionally, we know that traditional education has a strong focus on Linguistic and Mathematical intelligences and usually neglects the other intelligences for lack of time and/or resources. Therefore, TrueSmarts was built as a resource which will help you expand and encourage your child's different intelligences.
We encourage you to browse TrueSmarts.com for the current list of activities for each intelligence:
Tags: Logical-Mathematical Intelligence TrueSmarts Inspiration Bodily-Kinesthetic Intelligence Interpersonal Intelligence Naturalistic Intelligence Musical Intelligence Intrapersonal Intelligence Spatial Intelligence Linguistic Intelligence
We're happy to announce that you can now get timely updates about TrueSmarts' latest content through the following RSS feeds:
In addition to using your favorite RSS Reader to subscribe to a feed, all of TrueSmarts' feeds also have the ability to deliver updates by email.
Tags: TrueSmarts Site News
The Story Behind TrueSmarts.com - a Website to Enrich Kid's Financial Literacy, Leadership Skills, Emotional Intelligence and more
In this inaugural blog post, I wanted to share the inspiration behind the site.
The idea for TrueSmarts.com came as a result of the intersection of two events in my life: choosing a school for my daughter and the reading of Malcolm Gladwell's book, Outliers.
Choosing the Perfect School
I have two kids, and the oldest was about to enter grade one. My wife and I were trying to decide which school we were going to enroll our daughter in. We needed to determine whether to continue with her current Montessori school, send her to the public school that is walking distance from our house, or choose one of the many charter and private schools in our city.
It was this decision that caused me to ask myself the question "what knowledge and skills do I want my daughter to possess as a result of her education?" I was confident that any one of the schools would provide a quality foundation in reading, writing, mathematics, and the other subjects defined within a typical curriculum. However, as an entrepreneur, I started to reflect on the knowledge and skills that I currently possess that I wish I'd had a better grasp on as a child. I then realized that regardless of what school option we chose, none of them would provide a comprehensive foundation in the knowledge and skills of the working world.
Knowledge and skills such as:
- Creative Problem Solving
- Sales and Marketing
- Customer Service
- Financial Management
- Business Ownership
- and so many more that I have found invaluable!
The True Story of Success
The other event that occurred at the same time as this insight was the reading of Malcolm Gladwell's book, Outliers, The Story of Success. The book argues that success is not just about innate ability, but rather, ability combined with a number of key factors such as opportunity, meaningful hard work (10,000 hours to gain mastery), and your cultural legacy.
The Birth of TrueSmarts.com
In a moment of clarity, I realized that my wife and I could provide our kids with what I perceived as a meaningful advantage if we could actively cultivate knowledge and skills of the working world through opportunity and meaningful hard work.
I began searching the internet for anything that could help us in our new found mission. I quickly discovered that there is an incredible abundance of useful articles, games and resources for parents and children that touch upon the knowledge and skills that I was after.
But a new problem emerged: it was incredibly time consuming to locate relevant resources, evaluate their potential contribution, and then convert them into meaningful lessons or activities I could share with my children. I needed a mechanism to aggregate the content, and then quickly sort, categorize and filter what was important to me and my family. I needed a site which would provide quick access to impactful activities which would help me teach my kids key skills at opportune moments while keeping it fun. My wife and I also desired an active community of like-minded parents and children with whom we could pool our efforts . A forum where we could swap ideas about what approaches seem to work, other ways to approach a topic as well as to point us toward previously unknown books, videos, games or websites. But this kind of community was also nowhere to be seen.
After failing to find anything that came remotely close to fulfilling our needs, I decided to build a website to help not only my own family but other families that were heading down the same path. Over the last 12 months, myself and the expert team I've assembled have been actively developing such a site.
I'm now very proud to lift the veil and finally announce the arrival of TrueSmarts.com. Through this site, we endeavour to enrich the entrepreneurial, financial, and business intelligence of children through games, crafts and other fun activities. Currently, the site has an ever-growing collection of activities presented in an easily digestible format. Activities are for kids and teens aged 4 to 18, and each activity is categorized by age, type (craft, game, book, etc.) and tag (creativity, cash flow, communication, assets, stocks, time management, etc.).
Remember to check back with us because TrueSmarts.com is ever-evolving and in the near future we plan to roll out some very exciting enhancements.
Thanks for reading,
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