Yesterday, I told you about the small business and entrepreneurial lessons I taught my children after the impromptu garage sale my son, daughter and a friend had in the driveway last weekend. Today, I want to tell you what happened afterward. At the end of the sale, the 3 new entrepreneurs had collected $26. They were so excited, and so was I.
I've always taught my children the 4 things you can do with money: spend it, save it, invest it or donate it, so I asked them what they wanted to do with their haul. They listed lots of toys, and in my daughter's case, perfume and lotion. I proceeded to explain that if they were grown ups, they'd have to pay taxes and also tithe a portion to worthy causes, so we pulled out a calculator and added up how much they'd have left after earning $26.
Figuring 10% for a tithe and 20% for taxes, their total profit was $18.20. Since they were business partners, they'd have to split that up evenly, for a total profit per person of $6.06. Suddenly, it didn't seem like a lot of money, and it wasn't.
I did this to show them that, even if you make lots of money, you have to pay your taxes, donate to the less fortunate and share a portion with the people who helped you be successful. I'm so excited to be in a position to teach my children these lessons at such an early age.
Unlike my generation, they won't have the bumper crop of year round jobs to choose from. Instead, whether or not they have a traditional job, they will also need a source of income that they control. This little garage sale lesson is the first of many that I hope will set them on the course toward entrepreneurship.
Question: What do you think? Too much information to early? I'd love to hear your thoughts and the creative ways you use your entrepreneurial experiences to teach your children about money. For more tips and inspiration, visit Indiebusinessblog.com.
Great example! What a simple way to teach about finances, responsibility, & life.
Great example! What a simple way to teach about finances, responsibility, & life.
Yes, that was a great lesson on many levels. I often wish my parents had attempted finance lessons growing up, but maybe this was a bit too real at their age? Especially if they had to actually hand over the tihe and taxes? Maybe it was just discussed? I often hear children are never too young to learn, but I have to wonder with younger kids whether their disappointment will have too much of a dampening effect on their entrepreneurial enthusiasm or if it will merely push them to do it bigger and better next time. I guess in adult life, that is the difference between those who succeed in their ventures and those who do not.
Yes, that was a great lesson on many levels. I often wish my parents had attempted finance lessons growing up, but maybe this was a bit too real at their age? Especially if they had to actually hand over the tihe and taxes? Maybe it was just discussed? I often hear children are never too young to learn, but I have to wonder with younger kids whether their disappointment will have too much of a dampening effect on their entrepreneurial enthusiasm or if it will merely push them to do it bigger and better next time. I guess in adult life, that is the difference between those who succeed in their ventures and those who do not.
D’Anna: thanks for sharing your thoughts and for making the interesting point at the end. I was not sure whether I should talk with them in detail about what would be left over, but I decided to share it and then let it go. I just wanted to introduce them to the topic. I sure hope I didn’t dampen their entrepreneurial enthusiasm.
Funny thing about parenting: so often, you don’t know whether you’ve done the best thing until it’s too late! I heard someone say that once.
Oh well, time will tell. Maybe next time they make some cash, I’ll let them go out and splurge so they can see both sides of the coin.
Twenty years from now, I’ll be able to let you know if it works. LOL!
D’Anna: thanks for sharing your thoughts and for making the interesting point at the end. I was not sure whether I should talk with them in detail about what would be left over, but I decided to share it and then let it go. I just wanted to introduce them to the topic. I sure hope I didn’t dampen their entrepreneurial enthusiasm.
Funny thing about parenting: so often, you don’t know whether you’ve done the best thing until it’s too late! I heard someone say that once.
Oh well, time will tell. Maybe next time they make some cash, I’ll let them go out and splurge so they can see both sides of the coin.
Twenty years from now, I’ll be able to let you know if it works. LOL!
My parents never told me anything about taxes and insurance. Money was never discussed with kids in England back in the day. I had a paper round as a kid, and wasn’t taxed. I worked the milk round delivery at 11 years old, and wasn’t taxed. I worked in a chip shop between the age of 13 to 16, and wasn’t taxed.
I left school, started a job straight away, and couldn’t wait for my pay packet. First shock was not getting paid at the end of the first week. I had never heard of working “a week in hand”.
Second shock came when I opened my first pay packet, and money was missing. Loads of it, too. I went straight to the personnel office, to get it corrected. That’s when I found out about tax and national insurance. I was absolutely wrecked. It was not funny!
My parents never told me anything about taxes and insurance. Money was never discussed with kids in England back in the day. I had a paper round as a kid, and wasn’t taxed. I worked the milk round delivery at 11 years old, and wasn’t taxed. I worked in a chip shop between the age of 13 to 16, and wasn’t taxed.
I left school, started a job straight away, and couldn’t wait for my pay packet. First shock was not getting paid at the end of the first week. I had never heard of working “a week in hand”.
Second shock came when I opened my first pay packet, and money was missing. Loads of it, too. I went straight to the personnel office, to get it corrected. That’s when I found out about tax and national insurance. I was absolutely wrecked. It was not funny!
@Susan: Wow! Sorry to hear of your rude awakening. I think generations before were not as inclined as we are today to discuss money. Introducing the next generation to the way money works is critical so they don’t have to go through what you did.
It’s sometimes hard for me to teach my children what I know are disappointing realities, but I prefer they be disappointed now while I have access to them in the home and can help them embrace reality, than to have them be disappointed later when the pain is worse and they don’t have as much support.
Thanks for sharing and reminding us of how important it is to pass along health and real financial messages!
@Susan: Wow! Sorry to hear of your rude awakening. I think generations before were not as inclined as we are today to discuss money. Introducing the next generation to the way money works is critical so they don’t have to go through what you did.
It’s sometimes hard for me to teach my children what I know are disappointing realities, but I prefer they be disappointed now while I have access to them in the home and can help them embrace reality, than to have them be disappointed later when the pain is worse and they don’t have as much support.
Thanks for sharing and reminding us of how important it is to pass along health and real financial messages!