Teaching Kids About Money Through Everyday Business Lessons

We’ve all heard the classic sigh from the back seat of the car or the middle of the supermarket aisle: “But I want it!” It is a rite of passage for parents, isn’t it? 

Trying to explain that the debit card isn’t a magic wand that summons infinite cash from the ether. It can be tricky to explain the value of a pound to someone who has never had to pay an electric bill.

But treating the household a bit like a small business can actually be a brilliant way to get the message across without it feeling like a maths lecture.

Moreover, learning about business and finance at a young age can prepare the kid for facing real-world issues. So, it is better to start early but within a comfortable environment.

But the real question is — “How to teach business lessons for kids?” Well, no need to look any further, I have the perfect guide for you.

Here, I will delve into the diverse methods to teach business, its benefits and challenges, share some tips, and more. So, keep reading to know more!

What Are The Benefits Of Teaching Business To Kids?

First things first, teaching business lessons to kids at a young age can be quite advantageous. That is, they can learn essential life skills while they are young, boosting their confidence. So, some of the benefits include—

• Financial Literacy: Firstly, learning about businesses can help the kids become financially literate. That is, they learn how to manage finances and foster responsibility.
• Problem-Solving Skills: Moreover, it allows the kids to develop problem-solving skills. That is, through solving real-world problems, the kids learn the basic skills to resolve any issues efficiently.
• Resilience & Adaptability: Additionally, the ups and downs of a business show that life is never fair. So, the kids learn to be resilient in the face of adversaries and adapt to the changing market conditions.
• Goal Setting & Time Management: Also, learning about business helps kids connect actions to goals. So, they quickly learn about setting goals and managing their time efficiently to achieve their objectives.
• Innovation & Creativity: Finally, learning about business allows the kids to cultivate business ideas and explore diverse aspects creatively. So, they foster creativity and innovation that make them future-ready.

Challenges And Limitations Of Teaching Business To Kids

Even though learning about business at a young age is quite advantageous, there are certain challenges and limitations. And, these affect the development of their core skills. So, some of these challenges include—

• Firstly, kids often struggle to grasp complex concepts of managing businesses, finances, and budgeting with the right funds.
• Moreover, they face difficulty balancing their academic responsibilities along with the additional business teaching.
• Additionally, it might be difficult for kids to immediately apply the business lessons in their everyday lives, leading to a lack of execution and slow learning.
• Also, there are not enough instructors and mentors who readily teach kids about the diverse business aspects. So, the kids do not get the right lessons.
• Moreover, the fixed academic curricula do not directly address these areas of skill development. So, the kids might not get access to resources and teachings.
• Finally, certain abstract concepts about business negotiations and market risks can be difficult for kids to understand and implement.

How To Teach Business Lessons For Kids?

Now, given that teaching kids about businesses and managing finances at a young age can be quite helpful, here are some methods to teach them business lessons—

1. The Weekly Shop: A Lesson In Budgeting

Think about the weekly shop, for instance. It is basically a lesson in procurement and budgeting. 

Instead of just rushing through the aisles, why not get the children involved in the decision-making? You could give them a specific budget for snacks and let them figure out the best value. 

Do they go for the big brand that costs more, or the supermarket’s own version, which leaves them with spare change for a treat later? 

It introduces the concept of opportunity cost; if you buy the expensive biscuits now, you can’t afford the chocolate bar later. 

It’s a simple trade-off, but it lays the groundwork for smarter financial decisions down the road.

2. Connecting Effort To Reward

Then there is the idea of earning, which is where things can get really creative. 

Whether it is washing the car or helping sort out the recycling, connecting effort to reward is vital. You don’t necessarily need to pay for every little chore.

Making the bed should probably just be part of being a member of the household, but offering ‘bonuses’ for bigger jobs teaches the concept of working for a wage. 

It helps them see that money is a result of providing value or service, not just something that appears on birthdays.

3. Understanding Profit vs. Revenue

For older children, you might even talk about the “hidden costs” of things. If they want to sell old toys or bake cakes to sell to the neighbours, help them make a profit. 

If the ingredients for the cupcakes cost five pounds and they sell them for ten, they haven’t made ten pounds. That is, after cutting the production cost, they’ve made five. 

Although it’s a small distinction, it changes how they view business entirely. 

Collaborative projects like this can also be a fantastic bonding exercise for children you foster with Fosterplus, providing a neutral ground to work together towards a shared goal. 

4. The Value Of Delayed Gratification

We want our children to be independent. Teaching them to save up for that one big Lego set rather than blowing their pocket money on sweets every Friday teaches delayed gratification.

That is, arguably the most important business lesson of all, as it’s about patience and planning.

So, the next time you are sitting down to pay the bills or planning the holiday budget, maybe invite them to the table. 

Even though it might seem boring to us, for them, it’s a peek behind the curtain at how the world actually works. 

Additionally, it might just stop them from asking for that expensive toy next time you’re at the shops, or at least, they might offer to wash the car to pay for it.