Money Lessons Your Kids Can Teach You

  • 7 Money Lessons from Kids

    Us adults like to think we have this spending and saving thing down pat, but sometimes it takes the sage words of a 9-year-old to inspire us to do even better. Unlike their adult counterparts who are saddled with credit card debt or retirement worries, kids today are taking charge of their finances more than ever, using their unique way of seeing the world to launch successful small businesses, give back to their communities and save their pennies for a rainy day, or at least a cool bike. “Adults think that kids don’t have money values and that [discussing them] is something to do later in life, but your kids do have money values that they learned from their family and just from the sheer force of advertising,” says Rudy DeFelice, a father of three and the CEO of Kidworth, an online service where kids and parents can set and share their financial goals. MainStreet asked a few youngsters for the best money advice they would give to their parents, ranging from time-tested wisdom (“only buy what you love”) to small business savvy (hire your friends). We think you’ll find these seven nuggets of wisdom all useful in their own way. Photo Credit: Getty Images
    Buy What You Need
  • Buy What You Need

    Whether you’re earning your dough from a lemonade stand or your 9-to-5 grind, the following time-tested, kid-approved money rules apply to all parents who want to improve their bank accounts. Elizabeth Tiedt, 9, says parents should "only spend money on your family, not on stuff you don’t need," and Christina Smith, 6, agrees, encouraging parents to “save up to buy a house” and (obviously) “buy your kids a present.” As we’ve noted before, all parents should know what they value, or need to get by, and develop their budgets accordingly. Photo Credit: Getty Images
    Buy What You Love
  • Buy What You Love

    If you’ve bought what you need and have money left over, parents should use the discretionary cash to buy something they’ll truly cherish, says John Parsaie, 15, who uses a Gold Star Saver account to sock away funds. “I’ve learned it’s important to spend my money on things I really want,” he tells MainStreet, unlike adults who tend to be “more impulsive with their purchases.” His first big-ticket item took five months to save for, but he knew the hard work was worth it when he bought “a high-end gaming laptop that he can use to do anything.” Photo Credit: Getty Images
    Do Your Homework
  • Do Your Homework

    “Doing a lot of research is important when making purchases,” says Parsaie, “and I think adults should use the Internet more because it shows you where to get the best value.” The Sudbury, Mass. native has a point: There are deals to be found all over the Web, some of them even for free. Parsaie recalls finding laptops priced upwards of $4,000 when he was shopping around on the Web, but he knew he score a deal when “with further online research, I found a smaller vendor that gave me everything I needed … for the awesome price of $1,400.” Parsaie’s homework paid off and he was able to make the “greatest investment of my life.” Photo Credit: Getty Images
    Small Biz Tip: Have a Plan
  • Small Biz Tip: Have a Plan

    Sebastian Dominguez, 11, and Lydia Mendez, 12, know a thing or two about setting up and running a successful small business. Last year both kids participated in Lemonade Day, a nonprofit initiative that helps kids around the country learn how to “spend a little and give a little” the old-fashioned way, with a lemonade stand. The first step to launching a small business, Dominguez tells MainStreet, is mapping out a plan before you open up shop. This year, he decided to relocate his stand outside a Berry Pop ice cream store, a place that’s sure to attract steady foot traffic, especially in the springtime. “I know more people will come because who doesn’t love Berry Pop?” he says, adding his stand might net Berry Pop some profits, too. “They might want to come and get some lemonade and with that, a Berry Pop.” Photo Credit: Getty Images
    Small Biz Tip: Hire Your Friends
  • Small Biz Tip: Hire Your Friends

    Mendez knew going into the Lemonade Day program that running her Lydia’s Homemade Lemonade was going to be “hard, fun and stressful,” so she made things easier on herself by enlisting her friends and family to do some of the manual labor and help with creating a delicious recipe. “[My friends] helped me prepare for my opening day by squeezing lemons,” Mendez says, “and my aunt helped by making the simple syrup and teaching me the mixture for the lemonade.” Mendez also landed some sponsors to help with supplies, a move that propelled her Houston-based venture into first place for the Best Tasting Lemonade contest. “After winning, I knew that I was going to have a successful business after all,” she says. Photo Credit: Getty Images
    Small Biz Tip: Give Back
  • Small Biz Tip: Give Back

    After two years of running Lydia’s Homemade Lemonade, Mendez is branching out, imparting her small business wisdom to others, which she feels is important. Not only does it feel good to help others, she learns as she teaches as well. “This year I will be helping one of my cousins run her own lemonade stand along with my own,” Mendez said. She also donates a portion of her profits to the worthwhile causes she believes in, including a charity that promotes breast cancer awareness. Photo Credit: Getty Images
    Small Biz School of Hard Knocks: Learn from Mistakes
  • Small Biz School of Hard Knocks: Learn from Mistakes

    Running a lemonade stand, or any business for that matter, isn’t just hard work—it’s hard, period, says Mendez, who moved her stand to a different location last year and watched in dismay as her drink sales declined. You have to accept the bad as a lesson learned and be grateful for the good, knowing “it’s not all about winning, but having fun,” she says. For example, last year Mendez “was not upset that my business did not do great or make a lot of money,” she says. “I had a lot of help from one sponsor,” and that could help her business grow down the line. Photo Credit: Getty Images
    See the Big Picture
  • See the Big Picture

    Parents talk about money “way too much,” says Parsaie, when what they ought to be doing is enjoying it, or finding a way to parlay their hobbies into hard capital. For more creative ways to do this online, check out MainStreet’s round up of the 10 best sites that can turn your passion into profit. Photo Credit: Getty Images
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