“Mom, this toy broke, can you buy me a new one?”
“Dad, I really want this new game, will you buy it for me?”
Think of these questions as mathematics learning opportunities. They open to door to discussions about the value of money (and responsibility and work, too). Finding real-world applications is one of the easiest ways to get kids excited about learning and it does not get more authentic than earning and saving money.
My kids are too young to hold jobs or even work a paper route (yes, those still exist!) but they can still earn money–and gain important math and financial literacy skills along the way. We set goals for desired items and calculate how close they are to their goals, count the money, and figure out hourly rates.
One of the easiest ways to introduce children to the concept of earning money is with a weekly allowance. We start our children on an allowance of .50 cents times their age once they are old enough to understand currency, perform simple chores (although specific chores are not tied to dollar amounts), and be responsible (in an age-appropriate way) for their money. Younger children can count out two quarters for every year of their age. Older children can figure out their rate as a fraction (1/2) of their age.
Kids can help with spring cleaning and earn money by sorting toys for garage sales. Seeing what sells and at what price also provides a valuable lessons in taking good care of your things, market economics (supply and demand), and negotiation. Once they sell their no longer needed possessions, kids will have more room for new items. Younger children can help count the money and older children can figure out how much money they earned per hour of working at the garage sale.
If your children are eager to work but still too young to actually hold a job, they can assist you with small tasks, like pet-sitting or watering plants for neighbors on vacation. We’ve found this to be win-win in the past. The vacationers get people they trust to help, neighbors get to be neighborly without the adults arguing about accepting money for small favors, and the kids get paid for being responsible.
Lemonade Stands and Entrepreneurship
Even very young kids can start a small business. My six year old daughter finger knits craft loop bracelets and sells them to relatives. The planning it takes to launch even a tiny lemonade stand can be far more valuable than they money they earn. Help your children develop a business plan that considers their product, their target market, how they will advertise their business, how much money they will need to launch and where they will get the money (hint: this should be a low or no-interest loan), how much they need to charge to earn a profit, and any regulations along with applications, permits, and fees.
For example, it makes sense to set-up a lemonade stand where you will find thirsty people. However, if you plan to sell anywhere besides your own property, you will have to get permission from event organizers, property owners, or the town. Even if you are selling on your own property, some cities require permits to sell food or drink.
Young entrepreneurs can learn how to add their earnings and then subtract costs to determine their profits.
Regardless of how your children decide to earn money, figure out how close they are to their goals. Discuss saving towards long term goals and also donating a portion of their profits to a charity. If they are selling something, they should include this charitable donation in their “marketing” on of the product. Children can then calculate the percentage of their profits they are saving and donating.
Next time you’re concerned your kids have a case of “the gimmes” turn the conversation around and empower them to earn.