Learning to earn

For many parents, getting teenagers or young adults to work over the long vacation can be a hard sell. Yet having a job in the school holidays can be especially important for teenagers as the alternative is invariably for them to spend an inordinate amount of time on the sofa on their mobile phones, surfing the internet, chatting on Facebook, Skype or other social media. As the vacation draws near, perhaps we should encourage them to get holiday jobs.

One of the most precious gifts you can give your children is the true independence they gain when they learn to earn. Working some hours a week for at least part of the long vacation provides many benefits; not only does it take some pressure off your finances in these tough economic times, but encouraging them to start to earn, also teaches them how to manage their own money, makes them more mature and dependable and helps them develop a sense of responsibility and self discipline, keys to success in life.

Teaching children about the connection between hard work and the ability to obtain goods and services goes much further than satisfying their every whim and buying them whatever they want. By introducing them to these principles early in life, they may avoid some of the financial pitfalls that so many adults face. These are valuable traits and life skills that will last far longer than any material objects they may purchase.

Children tend to be much more responsible and frugal about money that they have worked hard for, than with their “free” pocket money or allowance. What you will find is that when the money comes out of their own pocket they tend to be more selective about their purchases and may be less keen to use their hard earned money to fund an insatiable appetite for technology and gadgets, sports equipment and designer labels.

Gaining work experience enhances the employability of the majority of students who undertake it. Indeed for many employers those with some degree of practical experience are considered to be more attractive applicants for their job vacancies. You might even encourage them to be creative and put their natural talent to work and run their own small business. This could range from baking for sale, running an arts and craft club, to giving piano or other music lessons.

The benefits to young people of completing an internship can be considerable in terms of learning technical or practical skills, gaining experience in an industry sector and developing real world skills. As an increasing number of employers use internships as a way of assessing potential new recruits and a talent pipeline for their industry, it is imperative that young adults seize available opportunities as this work experience may well serve as the basis for their permanent employment.

Volunteer work gives young people an opportunity to add value to their community; if your child is unable to find a paying job, serving as a volunteer with assigned duties and a regular work schedule at a nonprofit organisation can deliver solid work experience as well as give early and important lessons in the value of philanthropy; it also creates a good impression on a CV.

By being in a formal working environment, your children will be in a position to form solid business connections and friendships which will be invaluable for their future earning power and their lives in general. If you fortunate enough to have some contacts, assist by making a few calls, not necessarily to get your child a job, but at least to get them a hearing; it is important that they make an effort to make calls, and confidently introduce themselves, so that they don’t feel they must always rely on you for their success.

The first salary presents an opportunity to teach them the importance of saving and investing. Savings accounts can be opened with relatively low amounts and sometimes offer interesting features such as bonuses or gifts on joining. Whilst such features make saving more exciting, the key concern should be the interest rate and overall performance, whilst ensuring that the funds are placed with a strong and stable financial institution.

An Automated Teller Machine card is particularly useful for older children as their ability to physically withdraw money themselves, makes for a very vivid lesson in financial responsibility. By using their ATM Card, children will learn the value of saving their money and the benefits of using it to purchase something that they “need”.

Help your child establish financial goals and a budget to help meet those goals. As children naturally have the advantage of a long term horizon, the stock market is a great way to save for future goals. When saving smaller regular amounts, the best way to invest in the stock market is through a mutual fund. These pooled investment funds are professionally managed and give access to a wide spread of shares and other securities such as bonds.

Children cannot own stocks or open brokerage accounts until they reach the age of 18, but adults can set up custodial accounts for the benefit of a minor and sign on their behalf until they come of age. Encourage them to go on line and monitor their investments; from the statements they will learn valuable lessons about dividends or distributions, capital appreciation and so on.

Going out to work every day is usually the first step to financial responsibility. It is not the amount of money your child earns, but the lessons learned that counts. The sense of independence and accomplishment provides a child with a solid foundation for their development and when they leave home, you can be confident that they can step out into the world and fend for themselves.