Financial Responsibility

Over Christmas break, Cora and Drew were looking to earn some money on their own. Cora wanted to repay a friend’s kindness by taking her out for a cupcake and juice. Drew has his eye on a Batman toy.

We had recently read the Tuttle Twins series, about twins that learn life lessons about economics, entrepreneurship, and the law. In one book, the twins helped another boy with a lemonade stand. Naturally, Cora and Drew thought this would be a great way to earn money.

Since it was Christmas, we decided hot chocolate would be more in demand.

With help from there assistants (parents), they created signs, sent us to the store for supplies, decided on pricing, and organized where, when they would set up their business. (Cora at first thought $10 per cup would be fair but then was reminded of the lesson from the Tuttle Twins about charging less to sell more so we settled on $1 per cup)

Going into this, I had no idea what to expect. For all I knew it would be a total bust.

We set up down the street from our house, still in the neighborhood, but on a street that gets through traffic.

At first it didn’t look good. Cora learned a hard lesson about sales and closing rates as people avoiding eye contact and doing a Hollywood stop right passed us. “Why is no one stopping?” she said.

I’m not such which, but I either under-estimated their business acumen or their cuteness factor because in just 2 hours they sold $60 worth of hot chocolate (including tips).

Cora was hoping for $10 so she could take her friend out. And now Anne and I to give a crash course in financial responsibility.

Here is what we decided to do. Much of it based on a book I reviewed in an email last year. A modified version of the 10-10-80 approach.

First, we decided they should give 10% each back to Anne for her investment in supplies.

They were to save 10% to long term savings.

Give 10% away.

And keep the remainder for their own enjoyment.

I was pleasantly surprised to see how well they responded to this. I could tell they were proud.

This whole endeavor made clear how challenging it is to talk with kids about money. We have an instinct to care for our kids, but we also want them to learn responsibility, avoid being spoiled, and set them up for success. It’s a tough balancing act.

Andrew Eppes, RICP®

Andrew Eppes is a registered representative of and offers securities and investment advisory services through MML Investors Services, LLC. Member SIPC. Nexus Advisors, LLC is not a subsidiary or affiliate of MML Investors Services, LLC, or its affiliated companies. 14241 Dallas Parkway Suite 1200 Dallas, TX 75254 972-348-6300. The idea of retirement means different things to different people. CRN202502-1751382

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