Twice a week, our CEO and resident money guru Jean Chatzky tackles your burning questions in the HerMoney newsletter. We’ve pulled some of the best to feature on our website — and this one made the cut! Got a question for Jean? Send it her way right here.
Q: Today’s question comes from Nicole. She writes: “I have an eight-year-old daughter who is very motivated to earn her own money. Since she is not old enough to officially work, she wants to start a business. I want to encourage her entrepreneurial spirit! We are considering an online slime shop since she loves making slime. I’m curious if your children have found other good ways to make money at that age. She is quite earnest and not satisfied with the few dollars of allowance we give each week.”
A: Hi Nicole — I love an entrepreneurially motivated child! And her desire to earn money bodes well for her financial future. When I wrote my book, The Difference, which looked at the factors that led to financial success in all types of economies, working as a teen was a positive indicator. That said, it’s pretty tough to convince anyone but a parent (or grandparent) to employ an 8-year-old, so I think the business is a good way to go.
One thing I would encourage is being straight with her about the costs involved in running her business and turning a profit. When my daughter Julia was around 10, she wanted to make ribbon belts. We bought the supplies and factored that into the cost, but to do the final stitching — not my forté— we took each belt to the local dry cleaner for a simple hem. They charged almost as much as she wanted to sell the belts for! That led to a long discussion about economics, what people would actually pay for these things (when they could buy something similar at J. Crew for a lower price), and how maybe a different business would be a better bet.
As for business ideas, there are so many good ones! For many years, the HerMoney team and I produced the content for Your $, a financial literacy magazine distributed by Time 4 Kids. All of those stories now live online for free and there are a number of impressive entrepreneurs for you and your daughter to check out. This story on a teen who started a very lucrative business recycling leftover paint and paint cans is one of my favorites.
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