Sunday, May 5, 2013

Garage Sales and 8 year olds: Life Lessons on Entrepreneurship and Financial Literacy.

This weekend, I had the opportunity to expose my eight-year-old son to the thrills and chills of entrepreneurship. He held his first garage sale on an overcast, chilly Saturday morning. Rather than control the entire process, I helped him set up and forced myself back into the house. Since the garage sale was a collaborative effort by community members, there were strangers driving in and out of the neighborhood and so I coaxed his burly older brother to watch over him. And then I held my breath expecting a disappointing reaction to the final profit margin.

You see, we never marketed our goods in the week following up the garage sale. There were never any signs leading to the house or describing his merchandise. We went with the flow, relying on the community's local advertising to bring in business. I'm proud to say though that he spent the entire preceding week dividing his trading cards into plastic sandwich bags and determining a selling price.

Turns out he did not do so bad, at least not on the experience level. He learned the ropes of running a business: customer service relations, negotiating prices, convincing his visitors to buy his merchandise. In the end, both boys came inside beaming with $ their hands. After asking my son to figure out how much he made per hour, I plotted other ways he could learn from the experience.

Like many parents, it's frustrating to see children suffer from severe brain drain when they arrive home after school. They have a tough time applying what they learn at school to their every day experiences, so it's up to us as parents to discover novel ways to make that link, right?

Here's what I discuss with the kids when come across money:

  • Dividing it between savings, expenses, and charity.
  • The importance of purchasing selectively to avoid over-consumption.
  • Monitoring their expenses to determine where they can cut spending on wasteful  items.
  • How their choices impact their decisions.
We even have a tin tube set up in the sitting area where we drop spare change to donate to charity. This year, my teen boy graciously donated it to a school fundraising event for Muscular Dystrophy. It makes me proud to hear the 8 year old mention it to his friends and family.

While there are elaborate tools catered to even children these days to teach them financing, I've realized that most children will eventually wind up doing what they want. I learned that recently after discovering my teen son was conning his father and I to give him money under the assumption that neither one of us was contributing to his unusual appetite for fast food. Keeping the lesson simple and applying it to life's every day happenings is the best way to go

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