A Lemonade Stand – not worth it?

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Paris Spence-Lang, a 7th grade student and all of 12 years old writes a financial advice blog. Yup! you heard that right, he offers monetary advice to kids his age and covers topics like negotiating allowance and focusing on more efficient ways to earn money.

He was profiled by the Vancouver Sun newspaper today. One of his posts, Lemonade Stand – Sour and Bland! caught my attention where he advises kids not to waste time setting up a lemonade stand to earn money because it is not worth the time.

A lemonade stand is a typical American thing to do if kids want to earn some more money over their allowance. A hot summer day and reactions of oh! how cute! often help sell their wares. I had written earlier if such a concept was specific to the United States and not practiced in India. But Paris is not convinced that it works. He says:

“So if you really want money, make sure you check all options such as raking, mowing, washing cars or absolutely anything before you open up a lemonade stand. I can make that much money in 10 minutes by rubbing my mom’s back!”

I was amused to note the cultural difference. If I had asked for two rupees each time I rubbed my mom’s back when I was a kid she would wallop my backside. Indian kids ‘serving’ their parents and doing nominal chores is considered part of our duty and responsibility toward the household. One of my dad’s favorite lines when he was in a taking-stock mood was to question us, what is your contribution to the house? After umpteen times of asking us, we mastered a response that got us out of any sticky situation. Our responsibility, we used to suggest, is to be model students and study hard to make our future bright. He couldn’t argue with that.

“A Lemonade Stand – not worth it?” [Short URL: http://www.ipatrix.com/?p=1876] was published Sunday, February 11th, 2007 at 5:14 pm by Patrix, filed under Business, and tagged as Business, children, finance. Both comments and linkbacks are closed.

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http://uberdesi.com Santosh
I can understand desi parents’ motive for not rewarding their children. In an age when money was scarce – pre economic reforms socialist India – you had to learn to live without money or make the most of what little you had. However, these days with money flowing in like water, I think the better way for parents would be reward your child but make them earn it. Money is available, just make sure your children now how to handle it.
http://www.ipatrix.com Patrix
Santosh, I agree that using the money incentive method is good to teach the value of money to children. But if we associate monetary gain for every little thing we do even for our friends and family then it gets like a counting game. How much do you think a child should ‘charge’ his mom for rubbing her feet? She might get back and charge you for cooking food :)
http://indianinheritance.wordpress.com oi
@ Patrix
I don’t think money incentive should be preached to children so young. Once they are 18 or 20, the rest of their life is gonna be spent on minting anyways. I think this is one of the reasons that the north american society ends up being so materialistic where anything and everything is weighed on the money scale.
I think we need to give some space to kids to at least live up their childhood and enjoy it while they can.
On that note, check this out – 19 year old starts saving for Retirement
http://www.ipatrix.com Patrix
OI, I am afraid I beg to differ. 18 or 20 is kinda too late for parents to teach children about money matters. They aren’t even children any more. And like in sex education, if you leave them on their own to learn about money when they are growing up, it is going to be a royal mess. And I am not necessary talking about money incentive but rather about value for money which is best learnt if you have to earn it. Silver spoons come with their own baggage.
Robert Liquori
Hey,
I agree with the idea that the lemonade stand will not be worth it. Like you have said there are many different ways to make an extra buck which will get you further i.e. car washing or mowing lawns. You earn more money for short amount of time.
My name is Robert and I was wondering how you started your blog. I am in a management class and our assignment is to find out tips on how to start a blog. I think your blog posts are interesting and I was wondering if maybe you could help me out and give me some pointers.
Thanks a lot
Robert
http://www.ipatrix.com Patrix
Robert, nice to see you hear. I know about your MGBU 4489 class and had mentioned it couple of days back. I’ll be glad to help you out with a few tips. Email me using the contact form in the header tab above.
http://indianinheritance.wordpress.com oi
@Patrix
I’m waiting for a post where we agree on something. :) LOL..
if you leave them on their own to learn about money when they are growing up, it is going to be a royal mess.
Hmm…I kinda have my doubts about the above statement. I’d read some stats in the recent past which said something like- for every dollar that an American earns they owe (are in debt) $1.85. And in India, until very recently, usually kids started working only after they graduated, right? That is changing now though with jobs like Barista and CCD and McD’s available. However, if we take into account personal debt – the US is actually a royal mess while India is not.
It of course has to do with consumption culture of America where it differs from India but I think saying that if you don’t teach kids about the value of money at a very early age, it is going to be a royal mess is a bit of a stretch for me.
http://www.ipatrix.com Patrix
OI, it will definitely be a while until we agree on something but as long as the discourse is civil, its ok :)
Now to comment on your claim relating personal debt that Americans find themselves in, I find this constant comparison with negative aspects of America diverging from the topic. Anyway, the personal debt is exactly the result of lack of financial education and inability to manage personal finances. The credit card culture which can be a vicious circle is mostly to blame. But if you handle your investments well, you can live off your once-in-a-lifetime windfall.
The $1.85 per dollar you cite is an average skewed largely by huge debts by few people who have messed up. Those who handle it well do exceedingly well. So in fact your example underlines my argument for an early education in money matters.
http://indianinheritance.wordpress.com oi
@ Patrix
I hope I am not coming across as “too argumentative”. If I am, please let me know. I know I can be argumentative, but its just to understand your POV.
I did not mean to diverge from the topic. The reason I brought up that was because most kids in the US do start working early. Which should directly mean, as you said, they would start understanding the value of money and thus act with more prudence, should they not? Why is it then that it seems to exactly the opposite?
I agree that the plastic money culture is at the root of all this and maybe even that $1.85 is a skewed figure. But consider the population of US and then consider the number of people who might’ve screwed up. The numbers don’t seem to small after all.
http://www.ipatrix.com Patrix
OI, not argumentative. Yet.
You are probably looking at the wrong causal relationship. By your logic just because kids in America start working early, they end up with debt. But that may be simply due to mismanagement of finances due to lack of education regards money matters. I never made the point that all Americans are geniuses at this. Mishandling of money is just because of the ease of spending it and not because of the ease of earning it.
http://indianinheritance.wordpress.com oi
Nope. In fact I am implying exactly the opposite.
I am trying to say that working early as opposed to starting late doesn’t seem to have any co-relation with how they end up managing money. As you said, kids can learn the value of money only once they start earning it. While I agree with that, the reality seems to be a little different when you look around.
Man! this would be fun in person rather than typing back and forth, don’t you think?
http://www.ipatrix.com Patrix
OI, as any statistician worth his salt will know there might be other factors too but ‘contact with money’ i.e. earning or handling it will most likely teach you the value of money. We may have to capture the population that finds itself in debt problem and then examine those factors like when did they start earning, parental advice, etc.
Of course! It would be fun to argue in person unless we come to blows :) But I doubt it.

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A Lemonade Stand – not worth it?

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