"Mind Your Own Business": Teaching Financial Literacy and Entrepreneurship to Our Children

Gimme Yo' Lunch Money

 I found it when I was nine. Farrah Gray, author of Reallionaire and Get Real, Get Rich found it when he was seven;  my third grade students found it last year.

The relationship between good financial hygiene and the pursuit of endless possibility. 

In fourth grade, I rented out my erasable pens for $0.25 each as the class transitioned from writing in pencil and in print to writing in script and in pen. By the time I was eleven, I had moved on to peddling posters from Right On magazine for $0.50 and $1.00, for small pictures and pull-out pictures of the then-hottest celebrities, respectively. Farrah Gray, the African-American mogul that become a millionaire by the age of fourteen, started selling home-made lotions door-to-door in the projects of Chicago's Southside. Last year, each of my third-grade students received a piggy-bank, which I expressly remarked was exclusively for contributing to their college funds. 

Awakening Their Financial Genius  

This proclivity for financial awareness and understanding of the benefits of entrepreneurship are direct indicators of financial literacy. Expert accounts of American households with average amounts of credit card debt as high as $9,000 in 2007, increases in the rental of shortage units, and the surge in the interest and number of housekeeping reality shows, however, point to the glaring levels of financial illiteracy throughout this country. 

Despite the severity of  this widespread and ever-deepening social problem,  mandatory financial curricula continue to be absent from most primary and secondary schools' core educational priorities. This means that teaching our children about money, entrepreneurship, and healthy spending habits has to begin at home:

1.   Watch television and flip through magazines with them to analyze the role that commercials and advertisements play to encourage 'group-think' and mass consumption.  Children and young adults in tune with much of pop culture turn a blind eye to the reasons why they buy certain labels at certain times.  They honestly believe that they purchase them  from their own volition. If at this stage in their development they profess their individuality and autonomy, why then, do many strive to look, dress, smell, and posture in identical manners to their peers? The manner in which they conform, that is-- what they consider worthy of buying, wearing, drinking, saying, and driving --comes from social cues orchestrated and controlled by seemingly innocuous suggestions and subliminal reminders of what should constitute their external identity and internal values. 

2.  Identify symptoms of  impulse buying and implement strategies to thwart its influence.

Many of us, including children and young adults, experience an increase in heart-rate, sweaty hands, and a trance-like state when we are overcome to buy on impulse. While it is important to acknowledge the sensation, it is of greater importance to implement impulse-related rules of engagement to spare your future of financial difficulties: Walk directly out of the store and to your car. Repeat your favorite money mantra.  Keep all ATM cards and credit cards in house before you leave the house. Give yourself a 48-hour rule: If there is a purchase over $20 that you want to make, think about for 48 hours. Once you have given physical and mental distance between you and the item, your impulse to buy would have waned or completely died all together. 

3. Educate them. 

For lower-elementary school students (K-2), books like It's a Habit, Sammy Rabbit celebrates a rabbit that saves its carrots and fosters early savings habits, while books like All For the Better follows  how a Puerto Rican family in El Barrio consistently saves money to support their extended family in Puerto Rico during the Great Depression is more appropriate for upper-elementary school students, (3-5). Similarly, The Center for Black Business History, Entrepreneurship, and Technology provides information on the four century tradition of black business activities from slavery to freedom in the United States for more advanced readers. 

4. Set financial goals and expectations for them. 

 Open a saving accounts with them and have them make bi-monthly contributions. Insist that they pay in full or in-part bills (i.e. cell phone, nails, entertainment, shopping). This instills a sense of responsibility. Having them play an active role in their financial lives will also streamline their priorities and understanding between a "want" and a "need" once they will not be getting it free. If you allot an allowance, maintain strict rules that restrict advances, discourage borrowing, and create  incentives to save. (i.e. providing matching funds)

5. Encourage an entrepreneurial spirit. 

 Our children possess an array of intellectual, artistic, political, and cultural  talents, passions, and interests. Allow these predilections to become  potential sources of income. If your child the teacher's pet? Let invaluable skills such as excellent reading, strong organizational skills,  reliability, and congeniality be the beginnings of an educational enterprise for her/him. Is your child particularly athletic, fashionable, handy? Allow him/her to train, design, and fix for a fee around the neighborhood.

It Takes a Village to Raise a Mogul

There are several programs available to elementary, middle, and high school students interested in learning about microenterprises, the workings of start-up companies, and the nuances of self-employment. Below are programs, agencies, and organizations that equip our youth with key entrepreneurial skills and opportunities to secure funding for their enterprises.

These opportunities make a great complement the financial instruction that you do at home.The resources listed below are by no mean exhaustive. 

• National Foundation for Teaching Entrepreneurship (NFTE) teaches high school students how to start and run a small business. Students have the opportunity to gain work-based experiences, develop leadership skills, and boost their self-esteem.
  
• Junior Achievement focuses on preparing American youth for the demands of a global economy. Through age-appropriate curricula, activities, and training, students of all ages learn about the market economy, work-readiness, entrepreneurship, and money-management.  
• Black Enterprises Kidpreneur/Teenpreneur Conference targets African-American youth, ages 7-17 for workshops that range from increasing interest in business and creating business plans to managing and establishing microenterprises. 
• Students in Free Enterprise is an international organizations that grooms college-level students for socially responsible entrepreneurial endeavors. They provide credit-card counseling, free enterprise project implementation, and professional mentorship. 
  
• U.S. Small Business Administration Teen Business Link provides a slew of links and resources to mentoring programs, academic scholarships, and internship opportunities. 

Please post any comments or questions on http://girlgetyourlifetogether.blogspot.com

Which Came First? The Bible or the Nest Egg? Using the Bible as Financial Blueprint

Which Came First? The Bible or the Nest Egg? 

Who and what do we consult for financial advice? Michelle Singletary? Yes. CNN? Yep! David Bach? Ok. The Wall Street Journal? Sure. Farrah Gray? Why Not! The Bible? ---What?

Yes, the Bible.

Using the Bible as Financial Blueprint

For Christians and members of other religious and spiritual faiths, the Bible is chiefly viewed as a moral and religious text. As result, Christians overlook its financial dimension, while members of other faiths including (agnostics and atheists) resist probing its contents all together because of mutually exclusive understandings of the spiritual way of the world. This narrow categorization cheats Christians, members of other faiths, and adherents to the "scientific method" of the non-religious and practical financial lessons that the Bible has to offer, which pre-date and parallel the conventional wisdom of some of The New York Times best-selling financial coaches. Below are 4 key scripture verses that, like our most followed financial gurus, voice the importance of budgeting, avoiding debt, thinking for yourself, and goal setting. 

Money Principle #1 Create a budget and stick to it!

Bible Verse: St. Luke 14:28-29 "For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it? Lest haply, after he hath laid the foundation, and is not able to finish it, all that behold it begin to mock him."

Money Principle #2: Focus on Yourself, Not the Joneses

Bible Verse: Galatians 3:4-5 "But let every man prove his own work and then shall he have rejoicing in himself alone, and not in another. For every man has his own burden to bear." 

Money Principle#3 Pay Off Debt in a Timely Manner/Avoid Predatory Lending

Bible Verse: Deuteronomy 15:1-2 "At the end of every seven years thou shalt make a release. And this is the manner of the release: Every creditor that lendeth ought unto his neighbour shall release it; he shall not exact it of his neighbour, or of his brother..."

Money Principle # 4 Be persistent and follow through to reap the benefits of hardwork. 

Bible Verse: Proverbs 12:11 "He that tilleth his land shall be satisfied with bread; but he that followeth vain persons is void of understanding."

Any comments, please send to adjowa2001@yahoo.com

FUQs : Frequently Unasked Questions on Money and Finance

Nod and Smile
Scenario #1
Your best friend says that she is the personification Sonia Sanchez, Amiri Baraka, a helping of Lucky Dube and a hint of Erkyah Badu and Public Enemy rolled into one. One night, she invites you to bear witness to her lyrical prowess. Her art. Her craft. At a local poetry cafe. By the middle of the third poem, you realize that her poetry is not only contrived, but also uninspiring. But when she leaves the stage (exit stage left) and returns to her seat and asks the faithful question, "Girl, what did you think? How was it?"  You are tempted to ask her how many credits shy she is from completing her degree in Accounting, but instead, you muster a,  "Girl, you know how you do!" and seal it with a nod and (big)smile.

Scenario #2
Your sister-in-law invites you to a financial literacy seminar. At the seminar, the speaker speaks quickly, but nonetheless, eloquently about the current market forecasts, inflation, the climate of the housing market, and predictions on the future of US economic development. There is a wealth of knowledge, but not easily digested in one setting because the content is dense. Cognizant of this, the gracious speaker opens the floor for dialogue. Hands go up, all except yours. You think your question is too simplistic to ask. So, instead of posing your question, you posture with a nod and smile. For effect, you may throw in, " She was so amazing!" to a random registrant as the crowd files toward the exit. 

Why We Don't Ask and Answer Questions
We often do it to avoid confrontation. We also do it when we are scared to voice uncertainity, confusion, and express a need for help. Yes, our pride, beautiful and brazen, when not tempered gets in the way of us being our most evolved and informed selves. The crippling agent, fear, coupled with insidious societal need for conformity and latent need for acceptance dwarfs the rate at which we take risks, go against the crowd, and stand alone.
When it comes to elevating our financial acumen, we have to ask questions. And the more basic, the better. A solid financial foundation that is built on the mastery of seemingly trivial, rudimentary concepts and facts will allow you to easily incorporate the more complex, complicated ideas into your fiscal schema.

FUQs: 5 Frequently Unasked Questions on  Finance and Economics

Q. What type of economy does the United States have?
A: Technically, the United States is said to have a mixed economy because both privately owned businesses and government both play key roles in its growth. It, however, moves and acts like a free market or market economy. A market economy is characterized by an emphasis on private ownership, not government ownership. In fact, private business produces and distributes the majority of goods and services in the country. What also makes the American economy free-market in nature is its belief in the power of supply and demand to determine the prices of goods and services.  The prices of goods and services, in turn,  inform  businesses what should and should not be produced, making way for the entrance of businesses "competitive enough" to produce  and the exit of businesses unable to compete in the free enterprise system. 

Q: What is the Federal Reserve? Why is it so important?
A: The Federal Reserve System is the central banking system of the United States. The Federal Reserve, as a central banking entity, is responsible for the country's monetary policies and decisions, which include monitoring, managing, and controlling the supply of money and trading it in the foreign exchange markets.  The former Chairman of the Federal Reserve was Alan Greenspan. The current Chairman of the Federal Reserve is Ben Bernanke. 

Q: What is difference between and stock and mutual fund?

A: A stock (also known as an equity or a share) is a portion of the ownership of one corporation or business entity. When you buy stock in a company, you have the right to a portion of the company's earnings and are subject to  mitigating its losses. Mutual funds, on the other hand, are companies that have fund managers that are responsible for investing a group of investors' pooled money toward a predetermined investment goal. Mutual funds provide diversity because it allows for investment in a number of investment tools (i.e. stocks, bonds) and allow the investors to have ownership in several companies. 

Q: What is an IRA? What is the difference between a traditional IRA and a Roth IRA?
A: IRA stands for "individual retirement account." A traditional IRA is an account which allows individuals to make investments with tax-deductible contributions. This money can be invested in stocks, bonds, mutual funds, or other investment vehicles and grow tax-free until the person is 59 1/2 years old. Penalties are imposed for withdrawals made before this time. After 59 1/2, account owners are permitted to make withdrawals, but must make withdrawals by 70 1/2 years old. The withdrawals will be taxed at your current tax rate. 

On the other hand,  contributions to the Roth-IRA are made with after-tax dollars. They also are not deductible on your tax returns. Since you have paid tax on your money upfront, withdrawals from the Roth IRA will be tax-free. Additionally, unlike traditional IRAs,there is no distribution requirement (i.e. withdrawals) and  individuals can make contributions to their IRA after they are 70 1/2 years old. 

Both impose annual contributions limits. If you are 49 years old or younger, you can contribute a maximum of $5,000 in 2008. If you are 50 years old or older, the ceiling is $6,000 for the year.  

Q: What is a "rule of thumb" in terms of creating a budget?

A: There are different ways to allocate money for a budget; The most basic I have come across is  the "50/30/20" budget. Fifty percent of your income goes to "must-haves" (i.e. food, shelter, education, transportation), thirty percent goes to "wants" (i.e. clothes, travel, entertainment), and twenty-percent goes to savings. (i.e. retirement, emergency fund, college fund)