Teach Kids Profit, Loss, Margins, And Other Stuff

Today’s fantastic family finance article is:

Some Kids Sell Lemonade. He Starts a Chain.

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Jack started a business.

Jack had a 45% profit margin his first year of operation in 2014.

Jack secured a business loan.

Jack hired a sales team.

Jack expanded operations to the web.

Jack built partnerships with compatible businesses.

Jack grew 2015 revenue to $25,000 — 12.5 times that of the prior year.

Jack is 10 years old.

Wow.

Read the story with your kids here.

Yes, it's an extreme example, and Jack had lots of help from his nuclear engineer dad and Young Americans Bank.

But, your kid doesn't need to do anything nearly as elaborate to learn about margins, profit, loss "and all of that financial literacy stuff." A little lemonade or cookie stand on the corner is still a fine place to start.

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Give Your Kids Some Dangerous Chores

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One foolproof way to increase your kid’s interest in doing chores around the house is to make them a bit “dangerous.”

Slice some fruit. Pound some nails. Chop some wood.

Gasp! You’re thinking “emergency room” right now aren’t you?

Why take the risk?

Confidence. Resilience. Pride.

Of course, you’re going to have to use some of that archaic stuff known as “judgement” to know whether and when your child is ready for the risk/reward of a “dangerous” chore.

Then, the recipe is simple: Show. Guide. Back-off.

Still nervous about taking off your kid’s bubble wrap? Read this excellent essay to boost your confidence.

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Teach Your Kids The 48-Hour Rule

Does your child have an impulsive streak when it comes to spending? Gotta have that shiny object right now, only to have it lose its luster days later?

That’s a habit you’ll want to nip at the bud while the stakes are low.

Time to roll out the 48-hour rule: “Wait 48 hours before making an impulse purchase.” (Or at least a day.)

Train your child to put some distance between the desire and the purchase. Put the item on hold at the store, or save it in the online shopping cart. Sleep on it. A little time for reflection is the ultimate buzz-kill when it comes to impulsive behavior. That’s valuable awareness to pick up early.

The “48-hour Rule” and “Grandpa’s Rule” are the two financial rules of thumb that will resonate most with youngsters from these 10 Essential Financial Rules of Thumb. Parents will definitely benefit from the other 9.

Read them all.

Right now! :-)

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Discuss Dee-1's Car Obsession With Your Kids

Today’s fantastic family finance video is:

Dee-1 Explains Why He Drives a ___ As An Everyday Car and Its Reactions

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Dee-1 is a very popular New Orleans rapper. Dee-1 is obsessed with his car. Dee-1 drives a…

Wait for it…

’98 Honda Accord with 262,000 miles and a flaky radiator.

Surprised? Indeed.

Dee-1’s message: “Dawg, I’m not defined by my car.”

Bravo. Now there’s a rap message every parent can get behind.

Sit down with your kids and watch Dee-1 share his “teachable moment” about his frugal ride in this 5 minute interview.

Who knew frugality could be so dope¹.

P.S.: The parental advisory for explicit content at the beginning is guaranteed to make your kids pay close attention. But no worries folks. All clean.

P.P.S. Just to pile on, Dee-1 also paid off his student loans and rapped about it here. Gold.

¹That means “so good” in modern parlance.

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Get The How-Not-To Manual On Spoiling Your Kids For Less

Today’s fantastic family finance book is:

The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money — Paperback

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It just got cheaper to figure out how to raise kids who are responsible and thoughtful with money.

That’s because Ron Lieber’s New York Times and Wall Street Journal bestseller, The Opposite of Spoiled, just came out in paperback this week. This is easily one of the best books out there on teaching your kids good money habits. It’s packed with best-practice anecdotes. No dry, abstract tome here.

To get a provocative taste of the delicate matters Ron covers in his book, check out this preview in the Times: Why You Should Tell Your Children How Much You Make. 754 reader comments! Clearly Ron has people talking. Grab the book, and you’ll be talking too — to your kids about money.

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Rethink Your Reward Economy

Rewards have become a mainstay in the modern parenting toolbox when it comes to coaxing chores and good behavior out of kids. The upside:

• More compliance.
• Fewer power struggles.
• Less nagging.
• More peaceful family life.

Ahhh. What’s not to like? Well, you may soon find yourself dealing with the dark side:

• Reward creep.
• Reward escalation.
• Lost leverage. (“No thanks. I don’t want the money.”)
• Disappearing intrinsic motivation.
• Diminished desire to help others.

This article explains why substituting “market norms” for situations that should be governed by “social norms” leads to an erosion of goodwill.

Fancy behaviorial economics talk aside, here’s the bottom line: while it’s perfectly fine to offer some work-for-pay gigs to the kids, make it darn clear that basic chores and good behavior are simply expected.

The kids’ reward? They get to be a member of the family and — bonus for the rest of us — grow up to become decent, thoughtful human beings.

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Let Your Girl Scout Sell the Cookies

Today’s fantastic family finance article is:

The Modern Girl Scout Mom Needs To Mind Her Own Business

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Mmmm. Thin mints. It’s that time of year again. Sweet.

Even sweeter, when Girl Scouts sell cookies, they learn important business basics:

• Identifying prospects.
• Delivering a sales pitch.
• Dealing with rejection.
• Closing a deal.
• Managing inventory and finances.

But when parents sell the cookies, Girl Scouts learn:

• Nothing.

So stop hawking cookies for your Girl Scout at the office, on Facebook, or anywhere else.

Let your kid do the selling. And the learning.

Still having trouble letting go? Read the 4 tips for getting the most out of this year’s cookie sale season in today’s article.

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