Jessica Reinhardt

Our Beautiful Ventura Branch, Located at 6633 Telephone Rd

Jessica Reinhardt

Ventura County Lemons, Dreaming of Becoming Lemonade

Of all the things I miss from childhood, Summer Vacation ranks pretty close to the top. Summer was a time for exploration, playing outside, and getting in touch with my inner capitalist. It seemed like almost every summer I had something new that I tried to sell - everything from lemonade to lanyard key chains. Some ventures were more successful than others. While my keychain business never seemed to get off the ground, (I kept wanting to keep all of my best work) my brother and I paid for a highly coveted Video Game console selling candy and lemonade one summer. While the toy we were saving up for seemed like the most important thing at the time, I've come to realize that the lessons we learned by earning and saving were priceless.

This summer is an excellent time for you and your children to seek out educational activities they might not learn in school. Financial Literacy is something that can be taught at every age/learning level. Here are a few simple suggestions to nurture a healthy financial relationship with your children.

Start Early, Keep It Simple

If a child is old enough to learn basic numbers and counting, and understand the concept of less and more---you can begin teaching them about simple financial ideas. Be sure to keep it light and interesting. If you're bored, they will be too. Explain concepts in language appropriate for the age - and if they happen to ask a perplexing question, look for the answer together! It's important to convey that we can always learn new things.

Look for real world opportunities throughout the day. For example, great opportunities exist when you are at the Supermarket. You can discuss price vs. product, and get them involved in the decision making process. At the checkout counter, hand your child the money and let them pay for the items you have chosen together. This will help them understand that things don't appear out of thin air, but are bought and paid for. If you use a credit card for your purchases, be sure to explain that there will be a bill that must be paid by a specific date.

Let Them Earn and Learn

If you have an enterprising child, let them start their own business. This could be something as simple as a lemonade stand, or as complex as a pet sitting service. As your child gets older, a business is an excellent way to increase the complexity of the concepts they are learning. Help them keep track of how much it costs to buy supplies for their business, such as sugar, lemons and paper cups. It will help them understand that they have to invest in supplies to sell a finished product---and that they have to charge a certain amount of money per unit (glass) in order to repay the money they spent on supplies AND make a profit.

When they do make a profit, let them celebrate their success, but also help them divide up their money so that they can understand the basic idea of budgeting. Many experts recommend teaching children about setting up a savings fund and giving a percentage of their allowance or earnings to a charity. If they are saving up for a specific toy, have them chart their progress toward that goal. How many weeks will it take them to save for it?

If they don't succeed, like my failed key chain venture---don't let them get discouraged. Go over what they did, and help them think through some of the decisions they could have made differently. Let them know that many successful people have had many bumps in the road along the way. Have them research a company or businessperson they admire---it will help them learn about the ups and downs everyone endures.

Encourage Saving

While many children are natural savers, others have to be taught to sock money away. Whether saving is second nature or learned, it should be encouraged and praised. The best way to teach is to lead by example.

Talk about saving with your children---what you do, how you do it, what you are saving for. If it is something for the family, include the children on the progress towards that goal. For example, if you are saving to buy a house, explain what that will mean to the child (do they get their own room?) and how they can help achieve that goal. Your commitment and excitement will be transferred to your child.

Celebrate Creatively

Just because you are saving money doesn't mean you can't have any fun. One of the biggest deterrents to teaching children about money is the notion of "spoiling their fun" or "not letting them be kids." We as a society have to shift away from the mentality that a budget means "going without." As you achieve benchmarks towards a certain goal, figure out a creative way to celebrate! Celebration doesn't need to mean pulling out your wallet. There are dozens of extraordinary things you can do around your community for free. Summertime is filled with free or inexpensive activities---things you might not normally consider could turn out to be a fantastic adventure.

Teaching children about money can be a very enjoyable and positive experience for all involved. Ultimately, it's about building a vocabulary that you and your children feel comfortable with---and instilling confidence in their decision making process. The end result will be children (and adults) who will be better equipped to survive the leaner times---and maybe they will teach you a thing or two along the way.

Pacific Oaks Federal Credit Union continues to be a financial steward to Ventura County; firmly committed to helping out members and the residents of Ventura County achieve their financial goals. For more information on our commitment to financial education, including resources and information on upcoming free financial seminars, please visit www.pacificoaksfcu.org.

If you have a group interested in learning more about financial education, please contact me at Jreinhardt@pacificoaksfcu.org.