I love the blunt questions my kids ask. A while ago Columbo asked, in his question book, “Why do we need money?” The question sparked a lively discussion on the basics of economics; causing him to change his question to “How can I get more money?” When my children were old enough to be aware of the existence of money, I considered how to teach them it’s value. Although they have household jobs, I’ve never been one to think children should be paid to do chores. As a member of a family, I think we all have a responsibility to contribute as we are able.
We began giving each of the littles a weekly one dollar allowance, payable in dimes, around the age of 4. With the privilege of receiving an allowance, they received three jars to help them sort their money. I used some jelly sized canning jars and rings. I made lids from card stock and cut a slit to add the coins. On payday, dad sits down with the littles and they each sort their dimes. The first ten percent goes in the jar labeled God. Another ten percent goes into savings, and the remaining into spending.
Not forgetting Columbo’s question of how to get more money, I presented the boys with the opportunity to become young entrepreneurs. With the arrival of spring comes a crazy huge annual yard sale in our neighborhood. I suggested they sell snacks and drinks at the yard sale.
Of course they couldn’t be entrepreneurs without first suffering through some homeschooling business lessons. They defined and discussed terms like inventory, cost margins, gross profit and net profit, etc. We had to go over the reality of net profit a few times. The expense involved began to sink in for them when at Costco selecting inventory.
Once we had our inventory, we calculated the cost of individual items, and considered reasonable mark up. This allowed the boys to identify the items with the highest profit potential, and to make some profit projections. To keep them from dreaming of all that money they might make, we role played and practiced making change.
Marketing was an important topic of discussion as there are usually a number of kids in the neighborhood that sell snacks. It really is that big of a neighborhood yard sale. Our final sign read “Homeschool Snack Shack. Please help us with our economics lessons.”The day of the yard sale was chilly. There was an uncomfortable number of people in the neighborhood for this more introverted mom, but sale projections were not immediately stellar. Fortunately marketing was on our side. Hearing our first customer comment to his wife, “Hey, I need to go over here and help out these kids!” I knew we had done well.
By days end the boys were thrilled to have sold the majority of their inventory. After a lively negotiation with dad to buy back unsold inventory, they were able to pay their expenses and rejoice in a net profit. They had dad help them calculate ten percent for God, before they were researching online for the item they will spend their earnings on.
Although the boys have visions of video games and other electronics they have heard about, they want and need a larger habitat for their guinea pigs. I’m delighted they are choosing to spend their earnings on a new cage. Given they are still a little short for the deluxe style cage they want, they are praying for wisdom in the purchase.
Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this, says the Lord Almighty, and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it. Malachi 3:10
How do you teach your kids about money?