At What Age Should A Child be Exposed to Financial Management?

Financial management is one of those ever important life skills that in some parts of the world, few education administrators incorporate in their curriculum for children, much to the disadvantage of the youth in their society. If parents are not skilled enough, do not have the know how, and cannot access resources to teach this to their children, a sad cycle can form.

Of course in some societies, you'd see little children with innovative businesses: setting up cookie stalls and lemonade stands, writing and publishing books, managing their own little kitchen gardens and then selling the produce in their community, etc.

In some countries, parents invest in stocks for their children and guide them through the steps of investing until they come of age. Some children are even exposed to games that teach them to invest and trade.

This is not a universal exercise, however. And it is sadly far more pervasive that children genuinely know nothing of budgets, have no exposure to or appreciation for business, and have never even dreamed of investing and earning passive income. And in this subsection of society, the expectation is often to survive. If you make it to a stage where you do more than this, then you would have beaten the odds. This is, of course, all my personal opinion.

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When I was 14 years old, I worked during one of my vacations in a bakery.

At the time, I was placed in the office and given clerical support duties working for the manager who was responsible for accounting.

Of course, my time in the bakery was very short because the vacation ended school reopened, but in that brief encounter, I was able to develop an appreciation for finance and for business in general. I actually went on to study business at secondary school, and it has always been my dream to become an entrepreneur myself.

Because of this exposure, I also saw the value in the concept of giving young people exposure to the work in environment, not in an abstract and theoretical way, but in a real hands on way in professions where it was safe to do so and where it could be accommodated, giving them the opportunity perhaps during their vacation to appreciate what goes into building empires.

Of course, in my country, providing employment of any sort to children under the age of 16 is deemed to be illegal, and so some businesses shy away from running afoul of the law. And I understand why this law is in place and the risk we can face of some persons abusing child labor if there were no such protection mechanisms, but even so, because of this blanket rule, at least in my country, I think that young persons can be cheated of an opportunity to learn hands on if there is not a proper support system in place at home. Am I being unrealistic here?

Last year, my son took part in a financial management course, courtesy his godmother, where he was taught about the elements of business, investing, aspects of trading, and even bits about cryptocurrency. At 13, he was the youngest participant in the program which targeted older teens.

At the end of the program, to graduate, participants were asked to develop a business plan including a SWOT analysis, competitor analysis, a risk assessment matrix, budgets and projections. Of course my son was struggling to keep afloat and he kept coming to us for support which we provided in areas where we could and tapped into our networks for help where we couldn't.

In the end, my son developed a business plan for an online store.

It was during the pandemic and there was a high demand for electronic devices at the time. Arguing that innovation will continue to shape our world in the future, my son decided to create an online store for his peers to access accessories for electronic devices. Not an out of the box idea, admittedly, but it was one that he felt he could have undertaken on his own. And he did.

Since then, he has been running a simple operation, selling accessories and phone cards to his friends. As parents, his father and I try to encourage him for we believe that it is a valuable exercise. In business, he must budget and he must ensure that he has a sufficient supply to meet his customer's demands. We haven't gotten into the whole branding aspect of it as yet and managing customer relations though that is something we would like to expose him to in this coming year.

In terms of his success as a business person though, he's breaking even and so sometimes he's discouraged, but we try to encourage him, reminding him that empires can take a very long time to build, and so he must be patient.

And maybe his empire isn't going to be built on selling devices, but we think the life lessons are valuable.

In fact, my son is very meticulous now when it comes to managing his finances. He calculates everything. It's funny the way he knows how to budget.

It Can Start With Any Generation

We never had a business of our own, I am just trying to get one off the ground myself for the umpteenth time. Our parents didn't have businesses. This does not mean that our children cannot.

We want a better and brighter future for our sons and so we believe that financial independence and responsibility is one of the first steps to securing that goal.

In our culture back in the day, if you didn't have access, we were raised to be good employees, and so for the most part, we were taught to work for money. This view is changing, I think, in younger generations.

I have been told by a good friend who is a successful businessperson with three or four profitable business ventures, you don't work for money, you make money work for you. And, of course, I know it's not his original saying, but he lives by this mantra: make money work for you.

Today, my old brain grapples around the edges of getting a business off the ground, managing finances in that process, navigating through the forming and storming stages of operations, establishing realistic short, medium and long term expectations as I build a brand that is loved by consumers. My son, however, already has a ledger and is calculating profit and losses for his business. He's just 14 years old this year. By the time he gets to be my age, I expect he will have a stronger appreciation for an entrepreneurial and even investing life.

And so, this brings me to my question, my friends, at what age should children be exposed to business and investing, and the possibilities of having multiple streams of legitimate income, and even the value in making money work for them? I'd love to know your thoughts.

Have a great Thursday, everybody!