- Research shows that adult money habits are established in children as early as age 7.
- This begs the question: Why isn’t personal finance taught in schools where children are already primed to learn?
- Whether it is in the classroom or from parents, it’s important that children learn to make, save and spend money wisely so that they avoid financial pitfalls as they grow older.
If asked to describe social media-savvy entrepreneur Dave Kerpen, it would be easy: He’s “likeable” — both as a person and a brand. Kerpen is the founder and chairman of the social media software company Likeable Local, as well as the award-winning social media marketing agency Likeable Media. He is a New York Times best-selling author, global keynote speaker and, most recently, interim CEO of UMA Health, an online mental health and executive coaching marketplace. The multitalented leader is also a husband, father of three and a major New York Mets fan.
Living up to his “likeable” mantra, one of his first initiatives and promotions for UMA Health was extraordinarily well-liked, attracting 118 million media views. What was it? Free therapy sessions for New York Mets fans following a 25-4 loss.
Keep reading for Kerpen’s insights on kids, money and entrepreneurship.
What do you remember your parents teaching you about money as a child?
Growing up, my parents didn’t really talk about money. What they did was demonstrate the value of a strong work ethic. That stuck.
What is the most important money habit you learned as a child that kids today should learn?
I think it would be to spend less than you make. I know it sounds simplistic, but it works. If a child or an adult can master and make a habit of that concept, they have a good chance of being able to manage their money in a manner that will help them have a better future and life.
At around what age did you realize ‘money was money’ (i.e., that it had value)?
I think I realized it very early. I had money and my friends didn’t. I was 14 or 15 years old, working and earning money. And, basically, none of my friends did. Maybe they had money if their parents gave them money. But I always felt different — making my own money felt special. It was an invaluable lesson and experience. It built my confidence. It gave me an early taste for being an entrepreneur. Fast forward to the last 15 years and I have become an entrepreneur. Now, the big money lesson is about building something bigger than me that can earn money.
As parents, my wife and I have worked hard to instill similar values in our children. So, our kids have had several businesses. It started when they were very young. It is ironic, but my oldest child, Charlotte, had a business before she had a job. It’s funny; there are rules requiring a child to be a certain age to have a job, but I don’t believe there is a minimum age requirement to own a business. Now, my daughter has had both businesses and jobs. I am very proud we have been able to teach our kids the value of money, hard work and owning a business.
What was your biggest money mistake as a child or teenager?
I was a risk-taker and willing to take chances. I liked to wager. That was a mistake. I lost a lot of hard-earned money gambling.
What was one of the smartest money decisions you made as a child or a teenager, and why?
I stopped gambling and channeled my effort and energy into being an entrepreneur.
What would you say are the primary reasons parents find it difficult to talk personal finance with their children?
I think parents find it difficult to talk to their kids about money because people have trouble talking about money overall. What may add to the challenge is people are not taught about money in school. Kids are not taught about personal finance in elementary school, middle school, high school or college unless they study finance or economics. It is a real tragedy. That needs to change.
One thing parents can do to make it is easier is to first get comfortable talking with their spouse or significant other about money. After that, they may want to think of conversations on finance with their kids as giving them a gift rather than a chore or challenge.
If parents can break through their barriers and give the gift of financial literacy to their children, it will help kids their entire lives. It is an incredible present. It provides children with a huge advantage — because sadly, it is something far too few parents do.
Research from Cambridge and Purdue universities reveals that adult money habits are likely established as early as age 7. Do you believe more personal finance should be taught in schools?
I am very passionate about education. I am on our children’s school board and a former teacher. I can do a whole interview on this question.
The short answer is our entire education system was developed a long time ago and it has changed very little since then. The skills and knowledge that were deemed necessary over 100 years ago are not entirely the same as we need now. For instance, it is probably no longer necessary to teach cursive handwriting. People type everything.
I am very much in favor of schools teaching kids about money and personal finance. One after-school program I am familiar with that does a great job with financial literacy is TGreen.org. The program is for inner-city high school students and young adults in Newark, N.J. It offers classes on personal finance, entrepreneurship and credit. It actually provides students the opportunity to get a small amount of credit and begin establishing a credit history. One of the biggest challenges to becoming financially literate is getting a firm grasp on credit. TGreen.org helps to solve for that challenge in a powerful way.
If the research is right, then it is important we start kids’ financial education early. My 3-year-old loves numbers. So, we do a lot of counting together, including counting money. I think what we should all keep in mind is there are lots of strategies available to parents to teach kids about money that are appropriate for every age level.
What is your favorite book on personal finance? And, is there one lesson that stands out from the book?
My friend David Bach has a wonderful book on personal finance, “The Automatic Millionaire.” If a person automates their savings and investments, it helps them spend less than they earn. It puts them on the road to freedom and security. It is a simple yet powerful concept.
Any final thoughts?
I have learned the value of entrepreneurship over the last two decades. As important as it is to work for money, it is even more valuable to build a business that creates money for you and others in the form of jobs.
We are at a time in our society when entrepreneurship is more accessible than it ever has been before. We need to teach kids about personal finance, but we also need to teach them about entrepreneurship. It does not matter if, as a parent, you are an entrepreneur or not. It is essential to teach kids to be entrepreneurs.
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