As wise parents, we try to teach our children about the most important things in life. We make sure our children know to stay away from strangers, to treat others as they would like to be treated and the importance of education. Why not start teaching our children about finance and how to manage money? This article discusses children and finance and how to teach your kids about finance.
Give Your Kids a ‘Job’ -
Most children do household chores when they reach a certain age. Why not turn this into an important lesson in finance? Aside from their usual chores, you could give them an optional job or two each week that they can earn money from. You might offer them a few dollars to rake the yard or sort the laundry – anything that will actually be helping and that they can earn money from. Of course, if your children don’t do the job, they don’t earn the money! This is a great way to teach your children that money doesn’t come without hard work and time!
Start a Savings Account for Your Child -
Another thing you can do (which would work in combination with giving your kids a job) is start a savings account for your child. Explain to them how the bank keeps their money and even gives them a little extra each month for saving it. You can have them put their allowance money in their savings account and show them their statements each month so they can see their money adding up. This will help your child learn the importance of saving – and if you want, you can let them think about something really great they want to purchase once they’ve saved so much money. This will show them that by saving their money, they can get things they really want!
Older Children -
If your children are older, there are several things you can do in order to show them about finance. For instance, you could have them get a real part time job so they learn what it’s like to work for money and what goes into earning a paycheck. If they drive, they can help pay insurance on the car or give you a percentage of their paycheck for gas money. Of course, if they don’t pay for the insurance or gas money – they don’t drive. This may seem cruel but when your child gets a real job, if they don’t pay their bills, they won’t enjoy the benefits of the services. If they don’t work, they won’t receive a paycheck. These methods will properly prepare your child for the real world and a working environment.
These are some really great ways to teach your children about finance so that they will understand the value of money and how hard it is to earn. This is a valuable lesson that you can give to your child and you can use the tips and suggestions in this article to do it. Good luck!
By: Kristi Patrice Carter
Archive for October, 2009
Children and Finance – How to Teach Your Kids About Finance
October 29th, 2009What To Look For In A Finance Manager
October 29th, 2009
The service of providing funds or capital for commercial or private reasons comes under the umbrella term – Finance. As a branch of a broader subject ‘economics’, it can also be viewed as a method of managing assets. This subject is also referred to as a system of administering money used by the private and business sectors. People that look after or manage the arranging of finance are called finance managers.
Managing this involves dealing with the optimization and allocation of funds to various areas either by borrowing or by using those available from internal resources. The way this works is that managers work to keep the cost of their borrowing low whilst passing this cost on with a an additional percentage to the client enabling a profit to be made. Bad debts are poor finance management where rules have not been followed; the result of this is depressed markets, low production and a cash crisis. This is why people who act as finance managers only have this type of work for a relatively short period because the potential risk to companies is high and so are the stress levels as a consequence.
One of the most famous management gurus Lee Iacocca referred to finance managers as Bean-Counters who almost look at the expense part with a rather pessimistic view. Unlike the sales managers who would like to invest in the future by product development, finance managers are rather skeptical of financing a project whose benefits lie in the future; even though their management governs future outcomes too. Unfortunately when you are running a small business, the boundary lines between a personal loan and a business loan can be a little blurred and often the planned arrangement is not used as was not used for its original purpose. Generally lenders who are investing in a business situation like to know exactly what their money is being used for.
Hopefully by educating the small (and large) business owners of their fiscal responsibilities they may build the basis of an improved company in the future. Small businesses can be very flexible, however, and call upon friends, other businesses, family members, even their own bank for finance. Lenders prefer to use money from elsewhere because it lowers their risk but still allows for a healthy profit to be received by the finance company. Bob Hope once said that you can only get a loan from a bank if you can prove to them you have absolutely no need for it; advice which could not be more true.
By: Francisco Segura
Business Finance with Equity Finance
October 24th, 2009
It has been said that nearly 61% of businesses are launched with either private capital or capital that is invested into their business by family and friends but investment doesn’t have to stop with merely just your family and friends, which is why equity finance exists.
Equity finance is cash that is invested into your business in return for a share of your business. These investments of cash never have to be repaid and don’t have interest attached to them. Equity finance is true risk capital as there is no guarantee that the investor will get their money back at all and these investments are not tied to assets that can be removed from your business should it fail.
The way in which investors get a profit from their investment is the fact they have a share in your business. This share means that investors either get money that is generated either through a sale of the shares once the company has grown or through dividends, a discretionary payout to shareholders if the business does well.
There are several types of equity finance such as business angels and venture capitalists. Each type of equity finance varies in the amount of money that is available for investment and the process of completing the deal.
If your business can support a growth rate of a least 20% you are more likely to be able to get equity finance. If you can’t generate a growth rate of at least 20% in your business then you are unlikely to be able to gain equity finance. It is the idea of control and the prospect of higher returns if your business is successful that attracts people to invest in your business
Sadly however many people are still highly reluctant to seek the help of equity finance as they see the idea of it as ‘relinquishing control’ of their business. Many small businesses are especially reluctant if their business is growing fast. As a business owner you should ask yourself the following questions below making any decisions about choosing to use equity finance:
• Are you prepared to give up a share of your business as well as some of its control?
• Are you and your management team confident in the business and the products and services that are on offer?
• Does your business have a unique selling point?
• Do you have drive to grow your business?
• What industry experience and knowledge does your management team have?
You should also consider the following when it comes to obtaining equity finance:
• How much funding do you need?
• How much control are you hoping to retain?
• How long do you need your funds for?
Each business should investigate the options that are open to them when it comes to finance. Equity finance is medium to long term finance and is the perfect type of finance that is open to small businesses, especially if you are an entrepreneurial business. Entrepreneurial businesses are what private equity investors are mainly interested in. This is because they have aspirations and a high potential for growth.
If you are interested in the use of equity finance it is important that you speak to a financial team who can put you in touch with people who will be able to put you in touch with the right investors.
By: Helen Cox
