Introducing Entrepreneurship Early Encourages Financial Intelligence
With financial literacy month wrapping up, many of us are still wondering when it's appropriate to introduce the lessons we've learned around financial literacy to children. We know financial literacy is particularly important in Black communities, but when is it appropriate to start schooling kids?
"Lessons should begin before age seven, because research shows that money habits and attitudes are already formed by then," said Sam X. Renick, co-creator of Sammy Rabbit, a children's character and financial literacy initiative, in an interview with Forbes.
He's not alone in that opinion. Entrepreneurs (and their parents) agree that it's important to introduce financial concepts early and their connection to success in entrepreneurship and financial intelligence later in life. These parents have learned the skills of entrepreneurship and they have a few important tips.
Ownership Is Power
Kayann Comeaux, mother of CEO D-J Comeaux who is the CEO of AfroBot Youth Collective, says that parents should start introducing entrepreneurship to children around 5 years old. Her son, now 15, started AfroBot Youth Collective when he was only 11.
"Teaching CEO D-J the importance of trademarks and owning his intellectual property is one of the first and best tools he grew up knowing," says Comeaux. The idea that ownership is power teaches children to start thinking differently about money before they become employment age. This can likely disrupt the idea that you have to go to school to get a degree to work for someone else. Instead, Comeaux says children can turn "natural hobbies and curiosities into viable businesses." For her, this meant teaching CEO D-J that "his thoughts and creations were not only fun to him but a wealth building tool to create a legacy."
The ideas of ownership and legacy are often articulated in financial literacy curricula and tied into specific financial products and plans. Learning to invest for example is a concept that emphasizes ownership, while long-term planning related to retirement or estates touches on the topic of legacy through a different lens. Early entrepreneurship makes these lessons practical and reflexive.
Find a Service To Provide, Make Money
Some lessons about entrepreneurship may not have a direct relationship to the management of money taught with lessons specific to financial literacy, but may have an impact on your ability to make money which is important.
With the rate of inflation at 8.54 % as of March 2022, issues around money might not be resolved by simply learning to save more, but by learning how to make more. Learning early how to start a business gives you the power to earn more in addition to saving.
Dr. Malcolm Adams has been a parent for almost as long as he's been an entrepreneur and says that around the age of 4 children can fully understand the concept of earning a reward and should be introduced to entrepreneurship at that time. As the founder and CEO of Purposeful Economist Inc., he says that he wished he'd learned certain lessons as a child. Dr. Adams prioritizes "leading with service and finding a problem to solve.
"There is no such thing as a free lunch," he says. "In a world of scarcity, life is about opportunity costs and making trade-offs." Learning to identify a need and provide a service around that need is an inflation-proof skill set that can generate income regardless of market conditions. You can't manage money you don't have.
Always Get Paid for Your Work
Tiffany Grant, who started her first business at around 5 years old is now the owner and financial wellness facilitator of Money Talk With Tiff.
"It's important to introduce your child to entrepreneurship as soon as possible and encourage them to pursue their endeavors," says Grant, who grew up around entrepreneurship and side hustles. "So many dreams and ambitions get cut short or halted at a young age. I am grateful for being allowed to explore and I afford my children the same. Introduce, encourage, and be involved if you can."
Not only can entrepreneurship teach a child the value of money but it also can teach them the value of their time. In society that has programmed many to view trading their time for money as being the only way to generate income, Grant says that learning the value of money early on helped her to understand that if she provides a service she should get paid for it. That early lesson served her well throughout her career and life.
Options Make a Difference
Anthony Hartzog, owner of The Hartrimony, is a new parent and shares that although entrepreneurship was introduced to him early, it wasn't done intentionally so he didn't really understand what it was. It's not enough to talk about entrepreneurship to children in a roundabout way. Introducing entrepreneurship as a viable option gives them more freedom to choose their desired path or at the very least try it out.
"When children know there are options, they will seek to understand their options and what it could do for them," Hartzog says. "One thing I plan to implement with my child is thinking for money. For example reading books you get paid, helping the family you get paid."
This is not to say that introducing entrepreneurship alone will always result in the creation of new entrepreneurs but knowing that it's an option early on allows for young entrepreneurs to get a taste of applied financial concepts like budgeting, operational expenses, taxes and write-offs, and what profitability looks like, rather than being introduced to those concepts early and then waiting until adulthood to apply them.