Teaching your kids how to make money is an important part of parenting that should not be overlooked. As we raise our children, we teach them how to take care of their own hygiene, how to perform their chores, and how to treat others kindly, so why also give them the skills they need to start or run their own business. This certainly isn’t covered in very much detail through the public education system.
We wanted to give our kids their first lesson in making money (besides the tooth fairy and chores) and running their own small business. So, we thought a lemonade stand would be a good idea…
Benefits of Teaching Your Kids How to Make Money
There are several benefits that result from teaching your kids how to make money. Here are a couple that I can think of right off the top of my head:
- Learn to brainstorm what works – most kids learn by doing. By experimenting with ideas and figuring out what works and what doesn’t, they can begin to learn important marketing and business lessons from a very young age.
- Value of hard work – it was an all day process for the lemonade stand that we helped the kids setup and run. I know that being out in the hot sun from 8:30am – 5pm to earn a buck will give both of them more value for how hard money can be to come by.
- Place higher value on saving vs. spending – because it wasn’t easy to earn the money, kids are more likely to save the money versus spending it on the first thing that fits their fancy.
- Setting and achieving goals – teaching the kids how to run their own lemonade stand helps them understand the importance of setting a achieving goals. Our son set his goal to earn enough money to buy a Skylanders game for the Wii. He hit the goal with flying colors, but because is was tough to get there, I think he has changed his mind and decided to save the money versus spend it.
- Teach them to be better communicators – our son is very shy by nature. By the end of the day, he was walking right up to people asking them if they’d like to buy lemonade. This was a big improvement and something I hope to cultivate further.
Results of the Lemonade Stand
The kids worked hard to make the lemonade stand signs, help bake the muffins and cupcakes, set everything up, and run the stand for 8+ hours. At the end of the day the stand made a total of $88. Not too shabby – this was way higher than what I would have predicted. The stand was setup outside their Grandma’s thrift store, so they did have pretty good exposure.
The total expenses for the lemonade and the cupcakes was ~$25. I wanted to have our son pay this back to teach him about revenue, expenses, and profit, but my wife decided to let him keep the $25 for his first time. We agreed that future expenses for the next time will have to be self funded or will have to be paid back to the parents (probably without interest for starters).
If you haven’t taken the chance to teach your kids how to make money and start a new business, please consider taking the time to do this. What they learn from going through the exercise can lead to valuable life lessons that will help them in many aspects of their life!