What if I was a Lemonade Stand?

Elementary: Last week we talked about running a lemonade stand.

Ask your kids: Did you notice that we needed to discuss the cost of the stuff (money going out) we used before we talked about how much we needed to make (money coming in)?

And if we spent more on the stuff we needed (expenses) than the amount that we made selling it (income), we felt, well, not good, right?

What if we were the Lemonade Stand? What if we looked at our own money like a business? We don’t want expenses (money going out) to be more than income (money coming in).

Explain to your kids that the success of a business and the success of personal finances come down to the same relationship – the margin between income and expenses. It’s not how much money you make in sales, it’s how much you make in profit (sales minus expenses). That’s one key way to measure success!

And that’s what we want to do – measure success with personal finances in a clear manner.

Middle School / Teens: Last week we talked about running a lemonade stand.

Ask your kids: Did you notice that we needed to discuss the expenses before we talked about income?

And if we had to spend more on expenses than we received in income, we felt, well, pretty crummy, right?

That was a business. And while it doesn’t feel good, if the business is unsuccessful, you can walk away and still be you.

What if we were the Lemonade Stand? What if we looked at our own money like a business? We don’t want expenses to be more than income. Because if I’m unsuccessful with that, I can’t walk away from me.

Explain to your kids that the success of a business and the success of personal finances come down to the same relationship – the margin between income and expenses. It’s not how much money you make in sales, it’s how much you make in profit (sales minus expenses). That’s one key way to measure success!

And that’s what we want to do – measure success with personal finances in a clear manner.

Parents: We’re bringing the train around. Can you see it? We want the kids to shift the idea of success from stuff and having a certain amount of money to having margin between expenses and income. That’s where true emotional benefit lies and that is where we feel richest – where we have breathing room in our finances.

Next week, we’ll shift into Standard of Living vs Quality of Life before eventually pulling into the station of redefining rich for the long haul!

Random Fun: Until then, have a dance-off in the kitchen with your kids. Silliest moves win!

Elementary: Have your kids figure out what supplies are needed for a lemonade stand. Help them come up with at least the following list: cups, lemonade mix, water, napkins, signs. If they think of more, great!

Now help them determine how much the supplies will cost (expenses). Remember, you want them to come up with as much as they can on their own. If your kid has access to Google, there’s not much they can’t find out.

Now have them determine how much income they think they will need overall (given their determined expenses)?

Divide the number they came up with for income by the number of cups they intend to sell. Your answer would be the “price per cup” needed. Is this too high of a price? Could they charge more? What if no one buys at the price needed?

Fun factor: Actually execute a real Lemonade Stand on your street! The lessons learned are priceless, I assure you.

Ask these questions:

What happens if expenses exceed income? How would that make you feel emotionally?

What happens if income exceeds expenses? How would that make you feel emotionally?

Middle School: Have your kids figure out what supplies are needed for a lemonade stand.  Help them come up with at least the following list: cups, lemonade mix, water, napkins, signs. If they think of more, great!

Now help them determine how many they need of each and what the cost is of each category (i.e. 100 Solo cups is $6.50). Determine a goal for number of cups sold. Then determine expense per glass based on the goal.

Now you can determine a price to charge per cup. How much margin is enough? What makes it worth the effort?

Ask these questions:

What happens if expenses exceed income? How does it make you feel emotionally?

What happens if income exceeds expenses? How does it make you feel emotionally?

Teen: Let them know that a Lemonade Stand is an easy exercise to understand basic business concepts. With that in mind, have them determine what they think is a sufficient goal for profit if they operated a lemonade stand for one hot Saturday afternoon in the neighborhood.

Now have them determine what expenses would be necessary. Have them list the items and associate their respective costs. Have them determine an “expense per cup” price.

What do they need to charge per cup to meet their overall goal if they sell 50 or 100 cups? Assume you lose 10% of the cups due to drops and other unforeseen hiccups. Now what is the price?

What would they do with the profit? Have them name a goal (i.e. concert tickets, date money, video game, etc)

Ask these questions:

How would you feel if the lemonade stand ended up costing you more money than you made, knowing you couldn’t then buy/execute your what-to-do-with-the-profit goal?

How would you feel if you made more than you initially hoped and could cover your top 2 goals?!

Parents: We want our kids to associate positive margin with positive emotional benefit. Conversely, we want our kids to associate no margin or worse with a negative emotion. As we continue with our lesson plan, this will feed into the proper definition of rich.

Elementary: Make two columns on a sheet of paper. Title the left column ‘Income’ and write down how much money comes into your household each month. Title the left side ‘Expenses’ and list the following expenses with the corresponding amount:

Home, Car, Groceries, Electricity (you can do more if you’d like)

Have them figure out how much money is left.

Fun factor: Have them guess at the numbers before you write them down. Closest guess gets a treat of your choosing (Mike & Ike’s? Grapes?)

Ask these questions:

What would it mean if the expenses total was bigger than the income total? How would they feel?

What would it mean if the income total is bigger than the expenses total? How would they feel?

Middle School / Teen: Show them the full family budget. If you don’t keep one, you really, really need to start. But, in the meantime, you can create it with your kids. Make two columns on a piece of paper and have your kids help figure out the expenses. This exercise will help with having an appreciation of what has to be “paid for” each month that they may take for granted.

Ask these questions:

What would it mean if expenses exceeded income? How would that make you feel?

What would it mean if income exceeds expenses? How would that make you feel?

Parents: Help them talk through the emotions involved with the answers to the above questions. How they feel speaks to quality of life. This concept and the connection we want them to make will be made clear as we move forward.

Random Fun: Okay, try to play Monopoly in the next week! But for now, start a stand-up comedy tournament. Each player gets 2 minutes – biggest laugh wins!

In Gary Keller’s book The Millionaire Real Estate Investor, he mentions what he calls Nina’s Rule. Nina was a personal trainer, hired by Gary, who always sought to correct a client’s posture before venturing into assigning certain exercises to meet the client’s desired end-state. Gary tells us that Nina believed a good (or bad) posture shared a high correlation with overall physical health. She correctly reasoned that the best of us work on our muscles one or two hours a few days a week, but for ALL of us, our posture is at work about 16-18 hours every single day.

Gary made the analogy that our fiscal posture is similarly at work every single day through the almost subconscious, seemingly innocuous decisions we make with our money. While the big muscle movements of car and home buying are certainly important, the value of making smart decisions when handling money through small transactions in our everyday life can be immeasurable.

You and I have a great opportunity and responsibility to address our child’s financial posture that will prove over time to have a profound impact on the health of their financial relationships.

Subsequently, the intent of these posts is to equip you as the parent and identify the base concepts (posture) that will aid you in raising a more money-savvy child. Here are the 5 takeaways from the previous posts:

 

All subsequent posts will be focused on one of these concepts and provide a practical lesson you can apply at home.  I hope you’ll continue to follow us and allow us to partner with you in teaching your child or children about personal finances!

FOR IMMEDIATE RELEASE Contact: Mark Howard, Executive Editor
7/20/17 mhoward@floridatrend.com
727-892-2644

LAKELAND (July 20, 2017) – Allen & Company of Florida, Inc. was recently named one of Florida’s Best Companies To Work For.

The annual Best Companies list is featured in the August issue of Florida Trend magazine. One hundred companies are ranked in small, medium and large employer categories.

To participate, companies or government entities had to employ at least 15 workers in Florida and have been in operation at least one year. Companies that chose to participate underwent an evaluation of their workplace policies, practices, philosophy, systems and demographics. The process also included a survey to measure employee satisfaction. The combined scores determined the top companies and the final ranking.

“What’s clear from our list is that amenities like free lunch or a game room at the workplace are not the things that make a great workplace. Those amenities are just part of the way companies reflect their cultures — it’s the culture of the company and the company’s ability to hire people who understand and embody the culture that create a great workplace,” says Executive Editor Mark Howard.

“The best companies obviously provide strong pay and benefits to their employees, but they also offer fun diversions such as ice cream socials, holiday parties and field days,” says Florida Trend Publisher Andy Corty, “And these top companies encourage employees to participate in the organization’s overall success with training and open communications.”

The Best Companies To Work For In Florida program was created by Florida Trend and Best Companies Group and is endorsed by the HR Florida State Council. Best Companies Group managed the registration, survey and analysis and determined the final rankings. For a list of the 100 Best Companies To Work For In Florida, go to www.FloridaTrend.com/BestCompanies.

About Florida Trend
Florida Trend business magazine is read by 250,000 influential business executives, civic leaders and government officials each month. Its award-winning reporting covers business news, executives, key industry sectors, regional news and lifestyle. E-newsletters cover breaking news, movers and influencers, health care, education and small business. Floridatrend.com attracts over 100,000 unique viewers monthly.

About Best Companies Group
Best Companies Group works with partners worldwide to establish and manage “Best Places to Work,” “Best Companies” and “Best Employers” programs. Through its thorough workplace assessment, utilizing employer questionnaires and employee-satisfaction surveys, BCG identifies and recognizes companies that have been successful in creating and maintaining workplace excellence. For more information, visit www.BestCompaniesGroup.com.

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