I want to help my kids be good with money.
It seems obvious, but here are my reasons:
- I want them to have financial independence and to earn a great living
- I want them to have great lives, and to be able to pursue whatever they’re passionate about
- I want them to have the headspace to be able to think about what it means to be wealthy
- I want to help them have a positive impact on the world.
Teaching kids fundamental personal finance skills early on will position them for long-term financial success. From there, as parents, we have to let the chips fall where they may.
Entrepreneurship is a great way to teach kids about money. And what finer way to teach kids about entrepreneurship than a lemonade stand!
My five year old James had his first lemonade stand experience yesterday, and I thought I’d share the experience with you.
Here’s what we’ll talk about:
- Getting started
- Required supplies/equipment
- Location, set up and take down
- Sales and marketing
- Learnings and take-aways
Let’s get started.
This could be as simple as asking your kid, “Do you want to set up a lemonade stand?” But you can also spend time laying some groundwork.
Paying a salary
I advocate you pay your kids a weekly salary. It’s not an allowance. This is money they earn by completing their jobs and responsibilities.
My suggestion is that you begin with a $5 weekly salary. I break it out into three categories, Spend, Save and Give. $2 for Spend, $2 for Save, and $1 for Give.
While there are a lot of great apps and technologies for doing this, I think it’s important to give them cash, and to put the money in three clear jars.
You’re more than welcome to give your kids more than $5. What’s important is the breakdown of 40% of the salary to Spend, 40% to Save, and 20% to Give. Even if you start with $5, you’ll eventually increase it over time.
I suggest you designate one day and time every week for paying the salary. That way, you won’t forget to do it. We do it Sunday morning.
Earning extra money
It’s music to my ears when I hear someone say, “How can I earn more money?”
Teaching your kids about entrepreneurship by setting up a lemonade stand (or some other endeavor) is an awesome experience that I recommend you do.
You can also create a Job Board. In my house, this is simply a cork board with dollar bills and sticky notes explaining the job pinned to it. For example, you’ll find a note with $2 for cleaning windows and sweeping the garage.
You can create as many extra jobs as your kids are interested in doing.
Here’s a video I made you can show your kids to explain the jars and job board.
How I did it
We’d been paying our son a salary for a little over a year, and had seen other kids in our neighborhood with lemonade stands. I asked him a couple weeks ago if he wanted to do one, and he told me he did.
I asked him again last week, and he again said yes, so we committed to doing it.
I don’t want you to think a lot is required, but I wanted the first experience to be as fun as possible, so I wanted to be as prepared as possible.
Here’s the list of items we ended up using:
- A container of Country Time Lemonade mix
- One plastic pitcher to pour individual cups
- One large spoon to stir the lemonade
- One large glass container to hold the bulk of the lemonade
- 40 paper cups
- Two 7 lb bags of ice
- $20 in one dollar bills for making change
- One large cooler (which could also be used as a seat)
- Water for my son and I
- Snacks for my son
- One folding table
- One table cloth
- Three card board signs
We ended up using 20 of the cups and one bag of ice.
Location, set up and take down
It makes logical sense to set up a lemonade stand close to your house, but I knew we wouldn’t get enough traffic. I settled on a slightly busier road in our neighborhood where there was shade, as well as foot traffic. Even though there was more traffic, the speed limit was still 25mph.
My wife dropped my son and I off so we could unload all of our supplies. We decided our business would be open for one hour, and that my wife would pick us back up.
This location worked out really well, and I encourage you to be strategic about where you set up. We made most of our sales to people in cars, but a handful from people out walking.
The last thing I want is for you to do a lot of work, and only have three cars drive by.
Sales and marketing
We made three signs out of cardboard boxes that read “Ice Cold Lemonade $1.” Both my son and I stood on the curb in front of our table and held the signs so cars could see them. We waved with our opposite hands and had big smiles on our faces.
While I didn’t spend very much time thinking about pricing, $1 seemed (and still seems) like a good price.
Each time a car pulled up, I would step behind the table and let my son speak with the customer (which is the whole idea). He’s a personable kid, but I coached him on what to say. The simple script is “Hi! Ice cold lemonade, $1 a cup!”
They’d let us know how many cups they’d like, and I’d do that part. I’d then hand my son the cup and he’d hand it to them and take the money.
Learning and take-aways
This was an incredible experience, I honestly couldn’t be happier. Everyone was extremely kind and engaged, even people who didn’t buy because they didn’t have cash.
I think a lot of people appreciate when kids are trying to earn money, and they want to encourage them to do more of it. Many of our customers gave us $5 and $10, and didn’t ask for change. One person who was out for a walk gave us $20 and didn’t even take the lemonade.
All told, we ended up making $67, which far surpassed my expectations. Most importantly, my son had a really good time and said he wanted to do it again.
Several people engaged my son and asked him what he was going to do with the money. At first, he didn’t have a good answer. We talked about it, and the next time it happened he was able to tell them a specific toy he wanted to buy.
Next time, I’ll bring a garbage bag and a plastic cup to scoop ice into cups.
With a little bit of planning and the right attitude, a lemonade stand can be an awesome teaching tool (as well as a way to make some pretty good money).
Here’s my son, James in action:
If you’d like to learn more, check out our Teaching Kids about Money course.
If you’re ready to take control of your financial life, check out our DIY Financial Plan course.
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