Teaching kids about money
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Summer is an awesome time to teach your child the value of money. Let your kids earn some cool cash by starting a summer business – selling lemonade! Lemonade stands provide a great opportunity for teaching your kid about money.
Great teaching moments
We get so caught up in rushing to finish our errands that we miss out on an important learning opportunity for our kids. Many of the tasks that we perform every day can be a chance to teach kids the value of money.
Taking your child to the store so they can see the actual price of their supplies is another way to help teach kids money lessons.
For parents, the opportunity to talk about costs of everyday items with young entrepreneurs is the beginning of conversations about budgeting and managing money that can last for a lifetime.
Create SMART Goals
Let’s talk about the payoff or goal of your child’s fledgling business. Why are they trying to make money? Perhaps it’s to save up money to buy something they really want to have. Great, if your child is saving for something specific — make sure their goal is measurable, attainable and relevant.
They also need to have a time frame in which the savings goal can be achieved. Make sure goals are S.M.A.R.T. (specific, measurable, attainable, relevant, and has a time frame to be achieved.)
Setting a budget
There are two main costs to consider – the startup and ongoing costs. How much your child charges customers for the lemonade is a big question that needs to be answered. Determining startup and ongoing costs will help answer that question.
As any good shopper knows, price point can make or break a sale. While it may be tempting to set a price that just “sounds” good, two main considerations are costs (startup and ongoing) and potential profit.
Learning about loan
Chances are your kid won’t have the money to get their business up and going. If this is the case, they might need a loan from the Credit Union of Mom or Dad. It’s also important they know before any profit can be made from their business, they have to pay the loan back.
How to share
When teaching your child the value of money, it is important to know about spend, save, share. A good rule of thumb is to have 70 percent going to wants or needs, save 25 percent for the future and share 5 percent in the community by giving back. Learning the concept of giving back and caring for the well-being of others is an important life lesson that helps to benefit the entire community.