The thermometer in my car read 92 degrees on a sweltering Saturday morning in July when I pulled over and made one of my best investments in a while: an icy cup of lemonade for 50 cents. Many years ago, I, too, was the sole proprietor of a lemonade stand (prices were a bit lower back then).
In a rapidly changing technology-driven service economy, it’s not easy to forecast what skills will be most in demand, but the ones children learn from lemonade stands, like planning, hustle and how to focus on customers, will stand the test of time.
They are part of a set of fundamental skills that will apply to whatever awaits your children. Lemonade stands help teach financial responsibility.
The easiest way to develop financial responsibility in your children is by sharing with them your own financial habits on a daily basis.
For instance, while you’re at the grocery store and selecting a certain product, explain why you’re making that choice. Perhaps you’re selecting the store brand mouthwash over the well-known brand because it’s less expensive but contains the same ingredients.
When deciding whether to prepare dinner at home or go out to eat, discuss with your children the savings that come from choosing the former and the opportunities that these savings could provide over the long run. Could they open a bank savings account? Invest in stocks? What rewards could they see for either?
Tell them why you passed on buying that new, amazing, crisp, 70-inch TV. It was because you had to pay for soccer lessons. Explaining that buying one thing means sacrificing something else that tangibly affects your child breeds reasoning and sound decision making.
Children are hardwired to learn behavior by observation and communication. Don’t create a boring, lecture about money. Teach with routine, decision-making exercises to ingrain healthy behaviors that will grow in time. The secret is to make the conversation a two-way street. You need not stand on a soap box to preach financial responsibility.
Talking about saving, spending, and the financial decisions we all make as a family can be fun as long as we make it relatable. Don’t assume your children will inherit financially savvy genes from you, just as you shouldn’t assume they’ll be strong or weak at certain subjects in school based on your own experiences.
As you practice this habit you may even surprise yourself how often you’re making these conscious fiscally responsible decisions. You might even make even wiser financial choices as a result.
And as for your kids? When they’ve learned what you have to teach about mouthwash, maybe they’ll be ready to move on to lemonade stands. My daughter, who is now 32, first learned about business from a lemonade stand, went on to take business courses and is now a senior vice president at a major financial institution.
As you buy the store-brand mouthwash and talk to your kids about the purchase, you could be nurturing the next lemonade stand tycoon!
As part of a holistic planning process, a CFP® professional can help you understand how to transmit your values about money to your children.