Lemonade Stand Lessons

What happened to kids’ entrepreneurship?  Remember setting up lemonade stands in the summer?  Granted, today the “lemonade stand” might be an app, but still, the principle is the same.

I remember my father telling me how he used to knock on doors to sell avocados during the summers. He’d stand outside and chant, “Avocados! Three for a quarter!” This, of course dates him, as avocados now sell for $3.00 a piece.  This was his first job — at age 7.  His parents were so poor that his mom (my grandmother) used to sew shirts and pants out of cloth sacks that stored rice in bulk.  Wearing these homemade clothes embarrassed him because the kids would tease him.  He wanted to wear the “Levi” brand jeans and “regular” shirts — just like the other kids.  Sound familiar? But this was post WWII when Japanese Americans wanted to blend into the American fabric.  When he asked for Levis, his mother told him that he would have to earn money to buy it himself. And so, a young entrepreneur was born.

Summers are the ideal time for kids to get a taste for making money and learning about consumerism.  Until they learn the value of a buck, they won’t have respect for money, savings, or budgets. I think our society has become so engrossed with consumerism that they’ve lost sight of their finances.  Many people I know are living month-to-month, yet they purchase luxuries beyond their income level.  Using credit cards to make purchases only puts them in a downward spiral that they may never recover from.

So, stop that vicious cycle. Instead of giving your kids large allowances or buying everything they need, put them on a budget.  When they want something that costs more than they have, they’ll have two options: (1) Find a way to make money to purchase the item, or (2) Not purchase the item at all. Both options teach great lessons.  The first, gives them motivation to earn money, and the second, teaches them to decide what is important enough to work for.  You’ll be surprised to see what they decide NOT TO BUY, when it’s their money!

Kids can sell things that they make, like lemonade or cookies. They’ll learn how to quadruple recipes (math!), buy in bulk to save money (financial management), and sell their goods (marketing).  Keeping track of sales and their profits (or losses) opens the doors to bookkeeping and budgets. They can also sell services like washing cars, walking pets, watering plants, or weeding. This teaches kids how to establish clientele by setting up services that people need.  CONSUMERISM — IN REVERSE! You’ll be amazed by the lessons your kids will learn when they start evaluating marketing and advertising from the business point of view. I remember my girls complaining to me about how toy manufacturers “lie to the public about their toys!” because they make them look better than they actually are. This is an excellent lesson – it’s good to make them aware of how marketing and advertising gimmicks work while they’re young.

My father told me that when his mother made him earn money for the things he wanted, she gave him the best gift of all — motivation to become financially independent. He grew up to become successful. Something to think about!