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?
I have always been in love with all things art- I was obsessed with drawing and painting before I was even walking. In high school, I started a career selling art through various gallery art shows and on Etsy. I then went on to study fine arts at the University of Southern California, with an emphasis in painting, but took classes in ceramics, printmaking, cinema and architecture to get a really well-rounded education on all sorts of art.
During my senior year of college, my career path went through a huge transition; I started my own temporary tattoo brand, INKED by Dani, which is a brand of temporary tattoos based on my hand-drawn fine art designs.
The idea for the brand came one night after a themed party at college. My friends, knowing how much I loved drawing, asked me to cover them in hand-drawn doodles using eyeliner. The feedback from that night was overwhelming, everyone my friends saw that night was obsessed with the designs. In that moment, a lightbulb went off in my head... I could do some completely unique here and create chic temporary tattoos with an art-driven aesthetic, unlike anything else on the market. Other temporary tattoo brands were targeted to kids or lacked a sleek and millennial-driven look. It was a perfect pivot; I could utilize my fine arts training and tattoos as a new art medium to create a completely innovative brand.
Using the money I made from selling my artwork throughout high school and college, I funded the launch of INKED by Dani. I had always loved the look of dainty tattoos, but knew I could never commit to the real thing, and I knew my parents would kill me if I got a tattoo (I also knew that so many girls must have that same conflict). Starting INKED by Dani was a no-brainer.
I started off with a collection of about only 10 designs and sold them at sorority houses around USC. Our unique concept for on-trend and fashion-forward tattoos was spreading through word of mouth, and we quickly started growing an Instagram following. I was hustling all day from my room, cold calling retailers, sending blind samples and tons of emails, and trying to open up as many opportunities as I could.
Now, we're sold at over 10,000 retail locations (retailers include Target, Walmart, Urban Outfitters, Forever 21 and Hot Topic), and we've transformed temporary tattoos into a whole new form of wearable art.
My 4 best tips for starting your own business are:
- Just go with your gut! You'll never know what works until you try it. Go day by day and do everything in your power to work toward your goals. Be bold, but be sure to be thoughtful in your actions.
- Research your competitors and other successful brands in your category to determine how you can make your product stand out. Figure out where there is a need or hole in the market that your new offering or approach can fill.
- Don't spread yourself too thin. Delegate where possible, and stay focused each day on doing the best and most you can. Don't get too caught up in your end goal or the big picture to a point where it overwhelms or freezes you. You're already making a bold move to start something new, so try to prioritize what's important! I started off in the beginning hand packing every single tattoo pack that we sold and shipped. If I wanted to scale to align with the level of demand we were receiving, I needed to make the pivot to mass produce and relinquish the control of doing every step myself. I am a total perfectionist, so that was definitely hard! From that point on, overseeing production has been a huge part of my daily schedule, but by doing so I've been able to free up more time to focus on design, merchandising, and sales, allowing me to really focus on growing the business.
- Prioritize great product packaging and branding. It's so important to invest time in customer experience- how customers view and interact with your product. The packaging is just as important as the actual product inside! When we were starting off, we had high demand, and I definitely jumped the gun a bit on packaging so we could deliver product to the retailers when they wanted it. Since then, we've completely revamped the packaging into something upscale and unique that reflects what the brand is all about. Our product packaging is always called out as being one of our retailers' and customers' favorite part of our product!