When you think of money, what comes to mind first? For most people, it's lack. Money sparks images of bills and debt instead of wealth and abundance.
Isn't that a curious kind of thing? Money is a very physical thing that can come in the form of paper or coin – but most people in our society associate it with the opposite. When you hear the word money, your mind actually thinks about the feeling of not having money instead of thinking about the physical money.
But when you really delve into the topic, it makes a lot of sense. We naturally associate words with feelings. And for most of us, money elicits feelings of lack. It's a cycle that begins at a young age… but it doesn't have to.
That's one reason why it's important to teach your tween how to save now. If your tween starts saving now, she can face those defining moments of young adulthood from a perspective of abundance instead of lack.
The money mindset begins now
By the time your child approaches his teenage years, he has already begun to form an opinion on money. And there's some good news and bad news: Those opinions largely come from you and your relationship with money.
If you've got it all figured out, there's nothing but good news in the equation. But if you have some work to do on your own money mindset, it's not all sunshine and roses.
But there's a silver lining…
Once you've identified your own blocks, you can course correct with your child. Take a look at your own spending habits to see whether you can dissect any hidden beliefs you may have about money. If you can't, and you have trouble with saving, spending or making money, you may want to talk to someone who specializes in the money mindset.
At the very least, read a book about creating positive habits around money, so you can pass on some healthier habits to your tween. The relationship he forms with money today will stay with him for a lifetime, so this is important.
Compound interest is a young adult's best friend
Compound interest is the easiest way to explain the benefits of saving to your young adult. If you have an account where you can illustrate the benefits of compound interest over time, now is a great time to share the learnings with your child.
If not, no worries. You can still walk through an example of compound interest with the money your tween has to invest.
For example, let's say your 13-year-old child has $1,000 today. She invests that money into an interest bearing account for the next 10 years. Without adding a dime (or withdrawing a dime), at an 8 percent interest rate, that $1,000 will more than double. And it may not seem like a lot, but the longer you leave the money there, the more it will grow. After 20 years, you'll have four times as much in the account at the same interest rate.
And, naturally, the more your child invests, the greater the benefits. It's always better to invest early than to try and catch up later.
Emergency funds can save your financial future
Now's a good time to teach your child what could happen if you don't have an emergency fund.
Most of us learn by example, so let's explore one possible scenario:
Bob graduates college and gets an apartment with his friends. He has a job earning $7.25 an hour and that barely covers his living expenses. After living expenses, Bob always has about $150 left in the bank. This is his "entertainment money," and he always spends it.
But this month, Bob's certified preowned Volvo broke down. The cost of the repair was $200. Now, Bob has -$200. He was forced to take on credit card debt to get his car fixed. His bills just got a slight increase because he's making minimum payments on his credit card.
By making minimum payments, Bob will take nearly 2 years to pay off that credit card and pay an extra $52 at a 24 percent APR.
This is one strike. And there will inevitably be more to follow.
It's easy to see how things can snowball from here. When you're spending money you don't have, it will always cost you. As overdraft fees, late fees and interest charges pile up, you'll end up losing money you don't even have. It's difficult to catch up once you've fallen down this rabbit hole.
That's why an emergency fund is so crucial.
If you want your children to experience financial freedom, you have to equip them with the right tools. What techniques are you using to tach your kids about money?
Sweaty Palms & Weak Responses
Early spring 2018, I walked into the building of a startup accelerator program I had been accepted into. Armed with only confidence and a genius idea, I was eager to start level one. I had no idea of what to expect, but I knew I needed help. Somehow with life's journey of twists and turns, this former successful event planner was now about to blindly walk into the tech industry and tackle on a problem that too many women entrepreneurs had faced.
I sat directly across from the program founders, smiling ear to ear as I explained the then concept for HerHeadquarters. Underneath the table, I rubbed my sweaty palms on my pants, the anxiousness and excitement was getting the best of me. I rambled on and on about the future collaborating app for women entrepreneurs and all the features it would have. They finally stopped me, asking the one question I had never been asked before, "how do you know your target audience even wants this product?".
Taken back by the question, I responded, "I just know". The question was powerful, but my response was weak. While passionate and eager, I was unprepared and naively ready to commit to building a platform when I had no idea if anyone wanted it. They assigned me with the task of validating the need for the platform first. The months to follow were eye-opening and frustrating, but planted seeds for the knowledge that would later build the foundation for HerHeadquarters. I spent months researching and validating through hundreds of surveys, interviews, and focus groups.
I was dedicated to knowing and understanding the needs and challenges of my audience. I knew early on that having a national collaborating app for women entrepreneurs would mean that I'd need to get feedback from women all across the country. I repeatedly put myself on the line by reaching out to strangers, asking them to speak with me. While many took the time to complete a survey and participate in a phone interview, there were some who ignored me, some asked what was in it for them, and a few suggested that I was wasting my time in general. They didn't need another "just for women" platform just because it was trending.
I hadn't expected pushback, specifically from the women I genuinely wanted to serve. I became irritated. Just because HerHeadquarters didn't resonate with them, doesn't mean that another woman wouldn't find value in the platform and love it. I felt frustrated that the very women I was trying to support were the ones telling me to quit. I struggled with not taking things personally.
I hadn't expected pushback, specifically from the women I genuinely wanted to serve.
The Validation, The Neglect, The Data, and The Irony
The more women I talked to, the more the need for my product was validated. The majority of women entrepreneurs in the industries I was targeting did collaborate. An even higher number of women experienced several obstacles in securing those collaborations and yes, they wanted easier access to high quality brand partnerships.
I didn't just want to launch an app. I wanted to change the image of women who collaborated and adjust the narrative of these women. I was excited to introduce a new technology product that would change the way women secured valuable, rewarding products. I couldn't believe that despite that rising number of women-owned businesses launching, there was no tool catered to them allowing them to grow their business even faster. This demographic had been neglected for too long.
I hadn't just validated the need for the future platform, but I gained valuable data that could be used as leverage. Ironically, armed with confidence, a genius idea, and data to support the need for the platform, I felt stuck. The next steps were to begin designing a prototype, I lacked the skillsets to do it myself and the funding to hire someone else to do it.
I Desperately Need You and Your services, but I'm Broke
I found myself having to put myself out there again, allowing myself to be vulnerable and ask for help. I eventually stumbled across Bianca, a talented UX/UI designer. After coming across her profile online and reaching out, we agreed to meet for a happy hour. The question I had been asked months prior by the founders of my accelerator program came up again, "how do you know your target audience even wants this product?".
It was like déjà vu, the sweaty palms under the table reemerged and the ear to ear smile as I talked about HerHeadquarters, only this time, I had data. I proudly showed Bianca my research: the list of women from across the country I talked to that supported that not only was this platform solving a problem they had, but it's a product that they'd use and pay for.
I remember my confidence dropping as my transparency came into the conversation. How do you tell someone "I desperately need you and your services, but I'm broke?". I told her that I was stuck, that I needed to move forward with design, but that I didn't have the money to make it happen. Bianca respected my honesty, loved the vision of HerHeadquarters, but mostly importantly the data sold her. She believed in me, she believed in the product, and knew that it would attract investors.
From Paper to Digital
We reached a payment agreed where Bianca would be paid in full once HerHeadquarters received its first investment deal. The next few months were an all-time high for me. Seeing an idea that once floated around in my head make its way to paper, then transform into a digital prototype is was one of the highlights of this journey. Shortly after, we began user testing, making further adjustments based off of feedback.
The further along HerHeadquarters became, the more traction we made. Women entrepreneurs across the U.S. were signing up for early access to the app, we were catching investor's attention, and securing brand partnerships all before we had a launched product. The closer we got to launching, the scarier it was. People who only had a surface value introduction to HerHeadquarters put us in the same category of other platforms or brands catering to women, even if we were completely unrelated, they just heard "for women". I felt consistent pressure, most of which was self-applied, but I still felt it.
I became obsessed with all things HerHeadquarters. My biggest fear was launching and disappointing my users. With a national target audience, a nonexistent marketing budget, and many misconceptions regarding collaborating, I didn't know how to introduce this new brand in a way that distinctly made it clear who were targeting and who we were different from.
I second guessed myself all the time.
A 'Submit' button has never in life been more intimidating. In May 2019, HerHeadquarters was submitted to the Apple and Google play stores and released to women entrepreneurs in select U.S. cities. We've consistently grown our user base and seen amazing collaborations take place. I've grow and learned valuable lessons about myself personally and as a leader. This experience has taught me to trust my journey, trust my hard work, and always let honesty and integrity lead me. I had to give myself permission to make mistakes and not beat myself up about it.
I learned that a hundred "no's" is better than one "yes" from an unfit partner. The most valuable thing that I've learned is keeping my users first. Their feedback, their challenges, and suggestions are valuable and set the pace for the future of HerHeadquarters, as a product and a company. I consider it an honor to serve and cater to one of the most neglected markets in the industry.