“Come get your lemonade. Delicious lemonade! Only fifty dollars!”
My three-year-old daughter Georgia and my five-year-old daughter Penny are selling pink lemonade on our front lawn.
“No Georgia, fifty cents, not fifty dollars,” I call over from the front porch, laughing at the blunder.
My children are spending this summer learning about money. How to earn it, how to save it, and what it feels like to spend it.
So far they’ve sold fresh lemonade (a big hit), surprise bags with little toys (a major flop), and handmade organic lip scrubs and lip balms (an expensive business start-up with a requirement that they pay me back for my investment).
I think learning money management at an early age is important. Teaching my children about money isn’t as easy as I thought it would be.
I try and teach them basic principles, like the fact that the exchange of money for goods and services is how this world works. We’ve encouraged our kids to earn their own money and stepped back as they chose how they spend it. It’s given them power and confidence and I’ve loved watching them become little entrepreneurs.
Recently we went to a dollar store and both Penny and Georgia and bought some cheap little toys with their own money. They now understand that dollar stores are the best place to buy toys for cheap, but when Penny’s silly orange wig became knotted and ratty quickly she also learned that dollar store items simply aren’t made to last.
Another lesson they’ve learned is that cash is not unlimited. The girls are trying to save for a Hatchimal, but they now understand that if they keep spending their money they will never earn enough to buy this outrageously expensive toy. As their cash is spent, they get further and further away from their coveted $80 Hatchimal.
Penny recently was begging me to rent a new movie that was released called Boss Baby. I explained it wasn’t available to rent yet.
“You can wait two weeks until it’s available to rent, and I’ll pay $6 to rent it,” I explained.
“But I don’t want to wait!” she replied in frusturation.
“Well, you can buy it with your own money. It’s $25, a lot more than $6. We can watch it right now and you will have the movie forever,” I added.
We spent ten minutes going back and forth about the movie. She simply didn’t want to spend her own money, but was more than eager to have me spend mine on the movie purchase.
She’s a good bargainer, and finally I agreed to pay for half of the movie if she’d pitch in half as well. It wasn’t good enough and she sat with her poker face for a few minutes, not budging.
Finally, she realized that I wasn’t going to give in, and she agreed to pay for half of the purchase.
It turned out to be a great buy, because the girls have loved their movie and watched it many times since. I remind them often that they helped pay for this movie, and that I believe it was a great use of their money for how much entertainment they have received. Even though it was more expensive than the orange wig from the Dollar Store, it’s also provided much greater entertainment, and they will be able to enjoy their purchase for many more years.
I do believe that some of us are naturally spenders and others of us are naturally savers. Sure, some families pass down the “saving” mentality while others are really great at spending, yet I have noticed there seems to be some people more short-sighted with their spending and others less so. I’ll be honest and say that I fall into the short-sighted category and work really hard to save and be smart with my choices. It’s been fun to watch my own kids, and try and guess whether they’ll be savers or spenders.
Based on the fact that their purses are looking pretty empty and we still don’t have a Hatchimal, I’ll let you guess which category they fall into right now.
How do you teach your kids about money? Do you believe some of us are naturally spenders or savers? Leave me a comment!