Music Lessons: Shifting Responsibility to the Kids

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I’ve only heard of a handful of kids who were excited to practice for their music lessons, and I’m not completely sure the stories were true.  When I was a music teacher my philosophy was simple.  If you didn’t practice, come anyway!  Likely you don’t remember what to practice after a week off and I’ll help you get started again.  I figured the one practice session a week with me was better than nothing.

At some point, however, a habit of never practicing really slows progress. I got tired of paying for lessons to hear my kids sound the same week in and week out.  And our music teachers didn’t all share my philosophy.  Often we spent half of the 30 minute lesson listening to a lecture on the importance of practice–and NOBODY wants to pay for that.

Music is important to me.  So important that I didn’t give my kids a choice of studying music, just like I wouldn’t let them opt out of math. We couldn’t afford lessons so when it was time to start, I took on a paper route to make music possible.  When I became too pregnant to deliver papers safely in icy weather, I started selling Mary Kay instead.  Then Darren lost his job, and we immediately suspended the lessons. Our teacher kindly offered to continue  in trade for my teaching his wife to sew.  I throw that out there just to say that there are ways to have music lessons even if your budget is tight. (I once had a voice student who paid in raw milk = awesome!)

Anyhoo, I finally got so tired of fighting the kids to practice that I announced they were paying for their own lessons.  Each instrument cost $60 a month and the 2 oldest study 2 instruments @ $120 a month.  My kids don’t make that kind of money, and if they did I’d rather them put it in a ROTH.

So, I offered to pay them $3 for a GOOD practice session.  I did not allow them to skip a lesson for not practicing and if they didn’t earn enough to pay for the lesson by practicing they had to come up with the money another way.   It worked.

That was over a year ago and now that we’ve been using this method for awhile, I’ve got some tips for you.  Make sure to get enough single bills at the beginning of the month so you can pay the kids as soon as they practice. It reinforces the behavior better if they get the immediate reward.  It feels weird to go to the bank and get that many ones. If it bothers you, you can trade the kids their ones for bigger bills on the way to the lesson, then use the same $1 bills every week.

I use a clipboard system to help the kids pay themselves when they practice.  Original post here. My biggest failure is forgetting to stock it each week :(.  That can make the whole system go bust.  We have our clipboards hung on the second floor outside their rooms and it would be better for me if they were some place I see all the time.  Out of sight, out of mind.  If you decide to try it, adjust the system to work for you.

There will come a time, when your child has to pay out of his own pocket. He will be sad.  You should be sad too.  Say things like, “Bummer, I’m so sorry this happened.” Look genuinely sad.  It will be hard to look sad, because this is the BEST thing that could be happening for the good of your child. Try to manage it anyway.

If they don’t have money, you can say, “I don’t know what you are going to do.”  Do not give him answers.  Do not bail him out. If he offers to work for the money, accept the offer. Make the job difficult enough that practice would have been better.   If they will be short with money going to the lesson, please (secretly) call the teacher ahead and ask for his help in making your child responsible.  You might offer to slip him the money (and possibly an extra tip) if he will make the child work the debt off.  It will only happen once (or twice if your child needs to test the limits a few times to feel secure.)

This is day 13 in our series 31 Days of Kids and Money

 

What it Costs

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A little housekeeping:  Are you getting 2 emails from me every day?  I’m sooo sorry for being annoying.  I just figured out how to let my 6,000+ email subscribers get the blog posts, but 300 of you were already getting them from feed burner–and now are getting 2.  I recommend scrolling to the bottom and unsubscribing from the feed burner email, even though that email is prettier.  Before the end of the month I’m moving my service to MadMimi which will be a pretty email AND you’ll get important info on things that I don’t post on my blog.  You know, special things only for people who are big enough fans to subscribe.  If you keep the feed burner one, and get rid of the ugly email–you’ll miss out.  I promise it will only be ugly for a little while longer.

envelope-system

I wrote a blog post August 2014 about how we handle souvenir and snack money on vacations.  I’d love to have the cash to buy cool and yummy stuff for my kids all the time.  The reality is with 6 kids a $1.50 gas station drink quickly turns into $9 if no one wants gum.  The other reality is that telling kids “no” makes them more fun to hang out with in the long run.  They rarely ask me for anything, because they know it’s pointless. They don’t go around pouting about it either (most of the time—they are kids after all.)

When I do surprise them with a treat, it’s because it’s my idea (not because they asked.) AND they get super excited about it.  That’s the thing about treats.  They are awesome because they are out of the norm.

When we are planning a vacation, we give the kids opportunities to earn their own cash.  My parents are a big help with this providing jobs like painting a fence, cleaning out the gutters, or sweeping leaves and sticks off the patio.  Instead of handing the payment to them right then, we put it in their trip envelope and keep it safe for the big event.

When we leave, they get their envelopes (with a very exciting show of ceremony) and told they can spend on whatever they want, but when it’s gone it’s gone.  If there’s anything left after the trip they can keep it.  They quickly figure out what things cost at a gas station vs Walmart and start to make tough decisions about what they really want.  When it’s your money that you sweat to earn, everything changes.

This is day 12 of our series 31 Days of Kids and Money

 

A few Bible Verses about Money

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In a world where it’s popular to hate and protest the wealthy, I want my kids to look at money differently.  I want them to manage what they have according to God’s principles, to remember that it all belongs to Him anyway, and to work as hard as they can and do the best job they can at whatever they attempt to do.  If doing that makes them wealthy, I want them to be OK with that.  Then to take the money after providing for their families and change the world for good.

It’s not more righteous to be foolish with money management or lazy at work just so you won’t end up as an evil rich person.  It sounds crazy to type that, but I’ve met people who feel that way.

Money isn’t the root of all evil.  The love of money is.

1 Timothy 6:10 KJV

 For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.

God sometimes blesses people with wealth when they are faithful with little.

Luke 16:10King KJV

He that is faithful in that which is least is faithful also in much: and he that is unjust in the least is unjust also in much.

Genesis 24:35 KJV

And the Lord hath blessed my master greatly; and he is become great: and he hath given him flocks, and herds, and silver, and gold, and menservants, and maidservants, and camels, and asses.

Here’s a list of faithful people that God made wealthy.  It was apparently not meant as a curse.

And here’s a BIG list of Bible verses about money.

This has been day 11 of our series 31 Days of Kids and Money.

 

 

Why Little Kids Should Invest in Retirement

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Darren and I spend 10% of our income on retirement savings.  It’s a sacrifice for us to invest that much and really ought to be 15%.  We are working towards that eventually, but it’s not easy with as many kids as we are providing for at our level of income.

Roth IRAs grow tax free.  When you make less than $9,000 a year (like a kid might) you are in the 10% tax bracket.  They pay the measly tax and can invest with no taxes on the interest income.   That means if they retire as multi-millionaires and live off their Roth they won’t pay income tax during retirement.  It’s a beautiful system.  Read more…

Debt is Not an Option

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We had a shift in our thinking 10 years ago when we followed Dave Ramsey’s debt snowball to kick $89,000 in debt to the curb in 3 months.  We purposed then to never borrow again (except on a home.)

When we think that way and model that for our kids our thinking shifts from how can I borrow the money to how can I EARN the money.  We find ourselves planning ahead for things like car purchases, college, and appliances.

There isn’t enough money right now to fund every category we’d like to plan ahead for.  If an emergency comes up in one of those unfunded categories, we have our emergency fund. Since those extra categories are written into our budget with a temporary $0, we know how much income we need for the ideal monthly budget.  It gives us something to shoot for as I build my side hustle business to make up the shortfall.

I’m talking to my kids now about what they might being saving for.  A car, college….definitely.  What about a house?  If they can work and live at home for a few years as they sock money away, they might be able to purchase their first home with CASH.

Imagine never having a house payment…ever.  That’s the stuff I dream about for my kids.

Debt is slavery, because you’ve already spent money you haven’t earned yet.  Your future self ends up working for no pay.  Choose your hard:  I choose to wait until I earn it and hope my kids will too.

This is day 9 of our series 31 days of Kids and Money.

How to Teach Your Kids to Become Entrepreneurs

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My goal for my kids is to learn to work hard, do their best work, and be able to create income even if traditional jobs aren’t plentiful.  Helping them with their own businesses as children is one way we work on those skills.

A loyal reader sent me this suggestion: I absolutely love your kid’s money month, learning about their businesses. I was wondering for those of us less inclined, would you be able to do a blog tailored for the how to a kid would start a business? I loved the little tip about the fictitious name. I wonder how that “self employed” tax thing works. I was thinking about Abby and what she’s good at that she could help earn her some money and the party planning, cake baking came to my mind. While she’s still a teen and it may not be just like a professional baker, I think for what little practice she’s done that she’s knocked it out of the park.

I’m still learning a lot about running businesses, but here’s what I’ve learned so far.  Hopefully this will steer you in the right direction:

Choosing a Business

Have your child answer these questions and see if anything sparks a business idea:

  1.  What do I enjoy doing?
  2. What problem can I solve for someone else?
  3. What do I already have the supplies/equipment to do?
  4. What do other kids my age do to earn money?
  5. What adult jobs appeal to me?

Setting up a Business Plan

Keep it Simple, but include these things:

  1. What service will you provide or what will you sell?
  2. How will you make money?
  3. What will you charge? Make sure your fee covers your expenses plus profits.
  4. What are your expenses? (including supplies, equipment, advertising, transportation….)
  5. How much do you want to earn? (set a time frame) What do you need to reach that goal? (Specify the number of clients, Hours to work, or items sold)
  6. How will I keep records?
  7. How will I expand and grow?
  8. How can I leverage this business? (Earn a percentage of what others sell; Train others to start their own similar business)
  9. Do my prices reflect current market value (for my age?), allow for expansion and growth (to pay someone else and still make a profit.)  You want your prices low enough that you will get customers, but high enough that you won’t have to raise prices for several years. If you are worried you are charging too much when you are getting started, set your prices at market value, then offer a coupon incentive for your first few customers while you gain experience.

Finding Customers

  1. Who is your ideal customer?
  2. Where does your ideal customer hang out?  How can you reach them with your message?
  3. If you are doing something other than babysitting, you probably need a website to direct prospective customers to.  This is a great place to outline your fee structure, showcase your work, give customer reviews, and offer scheduling. There are free websites available but to save a headache in the future spend a few bucks to buy a domain name and have it privately hosted. You can set up hosting for about $6 a month. Then upload wordpress.org for the easiest to build website.  There are great youtube tutorials or you can get someone to do it for you from fiverr. (Most stuff there is only $5.)   I use Hostgator for domain registration and hosting and have been pleased with them.  If you use someone else, find someone who also uses Cpanel.  This simplifies things if you end up needing help from someone on fiverr or similar.
  4. You should also set up a facebook business page. Tutorial here.
  5. I’ve been able to help my kids get clients through facebook. It was a great first stop for us since I wanted them to work for people I knew well.  I just popped out a note that told the business, their availability and rate.  We were booked for the summer within a couple of days.

Business Licenses

  1. Most states have a Cottage Food Law that allows you to sell home baked goods and jams and jellies from your home without a license or health inspection. So if your daughter wants to bake cakes for birthdays, she probably can :). You can check the laws for your state here and here.
  2. Other business licenses–this gets tricky.  If you do a search for “Do I need a business license for_______.” you’ll get answers ranging from “definitely” to “probably not.”  We did not get licenses for any of our kids since none of our businesses require traffic to the house.  When I started my first home business, I got a fictitious name registry since my business name did not have my legal name in it.  That allowed me to get a bank account with my business name so I could cash checks made out to the business.  You can skip all that mess if you put your legal name into your business.  For example my official business name is: Angela Coffman: The Grocery Shrink (no fictitious name registry necessary–in Missouri.)  Get more info on whether you need a business license here.
  3. If you are advertising with flyers door to door or on cars, you probably DO need a permit for that.  You can get that at your county courthouse.

Taxes

  1.  Federal income tax:  Your child MUST file their taxes when they earn $400 or more.  The good news is when your child starts filing federal income tax, they become eligible to invest in a Roth IRA.  Make this happen.  (I’ll talk about it more later this month.)
  2. Self-employment tax:  This is social security and medicare tax.  Normally an employer pays half of this tax for you.  When you are self employed, you play both halves.  You can learn more here.  It’s 15.3% at the time of this post.
  3. State and local taxes–these are in addition to your federal income tax.  BLESS the states that do not have a state income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington, Wyoming, New Hampshire and Tennessee.  (47 states charge corporate income tax, keep that in mind when deciding if and when you should incorporate.) In addition your city may choose to charge a local income tax– 😛 Learn more here.
  4. State and Local sales tax: Your tax rate will vary based on your zip code.  These taxes generally apply to goods (but not services) sold to the end consumer (not sold to a distributor or to a tax exempt entity, such as a church.) This might come into affect if you are selling crafts or baked goods, which is one of the reasons I steered my kiddoes towards service industries. Learn more here.  Some states have also enacted internet sales tax laws.
  5. Tax Deductions: Having a cottage business makes taxes a bit more complicated, but there are whole list of tax deductions that can help reduce your child’s tax burden. Here’s an official list from the IRS.
  6. Whatever you do keep good records. This is great experience for your kids.  For every tax deduction you need proof, a receipt, calendar of appointments…something.  Keep everything together and save it for 3 years just in case you get the dreaded official letter in the mail. (Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction–probably won’t apply to the kiddoes :).)

This is day 8 in our series 31 days of Kids and Money

Meet Aspiring Kidpreneur, Brandon

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Kidpreneur Brandon

Brandon turned 8 on the 5th of this month and hopes to launch his business this summer as a personal consultant on Kid Bedroom Organization and Interior Design.

I’m going to be up front about this, Brandon is unusual. He was born organized and likes things to be tidy. He made his own lunch from the first day of kindergarten, wakes himself up for school with his own alarm, and frequently brings me items to get rid of because he doesn’t play with them enough. He chooses his own clothes and slicks down his own hair. He likes to wear belts, tucked in shirts, bow ties and vests. He loves an opportunity to put on a business suit, tuxes are even better. If I need assistance, he’s the first one to volunteer. We sometimes joke he was born an old man. (He considers that a compliment.)

I wouldn’t have talked with my other kids about starting a business at age 7, but he’s interested in it, has skills and an unusual sense of responsibility for his age.

He begged me to let him start working last summer as a recent first grade graduate and I held him back. I wanted to make sure he had the attention span and maturity level necessary to follow through on the job. I’m not sure he’s quite there, but we are going to try a few clients over winter break to get him some experience PLUS some before and after pictures and customer reviews for his website.  I plan to be his personal assistant until I’m sure he is ready to fly on his own.

I’ve been spending time talking to him about the steps he will take when he starts a new job, how he will respond if someone shows an emotional response to cleaning up or letting things go, and the importance of sticking with a job and working hard especially when someone is paying you.   He’s also thinking about simple systems and checklists to leave behind, so the parent and child can work together to keep the child accountable on keeping his room tidy.

He plans to work in 2 hour increments 2-3 days a week and has a list of items he can up-sell such as a virtual room redesign with shopping and work lists and subscription for weekly inspections and treat delivery .  He is also planning ahead to be able to hire people to work for him so he can take on even more clients and launch an online training program so other kids can start satellite businesses in their own areas.

Here’s his interview:

This is day 7 of our series 31 Days of Kids and Money

Meet Kid-preneur: Caleb (13)

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kid-preneur Caleb

When we were kids, my brother had a trailer that hooked up to the minivan.  He and a friend mowed grass for around 20 clients on a weekly basis.  Darren grew up doing something similar.

So when a mass email came through our church asking for someone to mow 2 apartment complexes, we jumped on it and Caleb’s business was born.  Darren imagined it as something all the boys could do together so they named it: “Coffman Brothers.”  Turns out for the last 2 years it has been something Heidi and Caleb do together while the other boys are growing bigger.  She doesn’t mind being called a “brother.”

Their first residential client gave them the nickname “The Green Team” and it stuck. Now they call themselves The Coffman Brother’s Green Team. (In Missouri If your legal name is in your business title, you don’t have to get a fictitious name registry–saves steps.) In addition to mowing they do storm and leaf cleanup and weeding/brush removal and this winter plan to do snow removal too.

Caleb didn’t have much say in choosing what he did for a business.  We decided it was good for him to work, to save up as much money as possible so he could have future choices, and made it happen.  He has earned and saved more than any other kid in the family, but would he do it over again?  I turned on the camera and asked him some questions.

This is day 6 of our series 31 days of Kids and Money

Meet Kid Entrepreneur, Heather

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Kid Entrepreneur Heather

Heather is fairly private and doesn’t like to appear on my blog or Facebook.  She gave permission for this spotlight and even granted a video interview in case it might help another aspiring kid-preneur. 

When you don’t get an allowance and you have wish list too expensive for a birthday or Christmas gift….what’s a tween to do?

Around here we call it work.  When Heather (11) decided she needed an IPod, she asked me what kind of jobs I was hiring for at the moment.  I listed some of the usual: deep scrubbing the kitchen floor, cleaning the laundry room, organizing my office, cutting down overgrown brush.  She passed.

I happily hired other pleasantly motivated children to do those jobs.  They counted their money in front of her, and she thought a little more about her situation.

She came and found me where I was working, and sprawled across my bed.  “Mom, how much do IPods cost?”  We looked them up at the Apple Store & Amazon and compared those prices with buying used from Swappa.  Swappa won out and I assured her while the price still looked high, it was within reach if she learned to work.

I offered again to let her to clean the kitchen floor. This time she took it. Then she asked, “What ELSE can a kid do for money? I mean, besides cleaning?”  We had a good talk about bringing value to the market place by freeing someone else make more money, or by doing something that they can’t or don’t want to do themselves.

Then we brainstormed a list of things that Heather (at 11) could do that might be valuable to someone else.  She picked her favorite thing and we wrote up a business plan.  She decided to offer her services as a mother’s helper: $5 an hour for complete child entertainment while the mother worked somewhere else in the home.  She packed a bag of books and activities and we talked about possible discipline scenarios; cooking options if she was working during meal time; and how to handle multiple children at once.

Then I put a note out on Facebook announcing her skills, experience, rate, and availability. Within 24 hours she was booked for the summer with 4 different clients each requesting weekly or biweekly service.  She had so much business that she had to hire her older sister to fill in for her on occasion.  In a month she saved enough to buy a used IPod and kept working anyway.  It felt good to be useful to an adult, to be meaningful in a child’s life and to earn money doing it.  She came home from work skipping and smiling and energized.

Here’s a rarely seen video interview with Heather.  I apologize in advance that the sound is so terrible.  I was sitting closer to the mic than she was, there were kids playing on the playground behind my house making background noise that was easy to ignore in person, and this was the first day of getting a voice after a bad case of laryngitis.  BUT better imperfect and done, than never done at all.

This is Day 5 of our series 31 Days of Kids and Money