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19
Oct
6

Teaching Kids About Money: 6 Benefits of a Bottle Picking Business

Perfecting Parenthood --  Teaching Kids about Money: 6 Benefits of a Bottle Picking BusinessIt is difficult to advocate for a particular method of teaching children about money because, I would say, a good many parents don't know about it themselves.  Rather they know and believe different and incompatible things.  Therefore any idea would get some people complaining that it's exactly the wrong lesson.  I'll start by dividing the people into groups:

Some view money as ever-scarce, hoarded by lucky, stingy SOBs who pay triffles for long and inconvenient hours. Others view money as the result of work: They'll have enough as long as they work diligently, save for big purchases, and live within their means. Still others view money as abundant, spraying everywhere if the right ideas and resources can be brought together.  Some people love the security of a job, others believe that a job is inherently insecure and would rather be self-employed.  Some people think you need to work to make money, others think you need money to make money, and still others think it takes other people's money and other people's labour to make a real profit.

Whatever you believe, this is as much as you can teach your children. I am an entrepreneurial person and have fortune-500 experience so I know quite a bit about how money works, but I'm no Donald Trump and can't advise my children on how to make billion dollar deals, although I hope to someday soon. My main focus right now is to teach them how to turn effort plus an opportunity into money; how to recognize value and capture a piece.  I definitely don't want to start with teaching them how to simply put in some time or do a "job" in exchange for a wage.

I struggled to find a way to get them into some money, without using the basic yet inherently flawed method of paying them an allowance or payment for chores (payment has been proven in numerous studies to be a demotivator and I don't want my children saying they won't help with the housework unless they're paid).  I realized that we had quite a bit of money in our old milk jugs, juice containers, and bottles, each of which get up to 25 cents in refund from the bottle depot. If the children were interested, they could round up those jugs and sell them. After I explained the opportunity I was thrilled to find out that they were indeed interested.

A few weeks ago we went for the first time and the kids got seven dollars.  With that seven dollars we went garage sale hunting and the kids were able to get themselves a couple of toys and a cool lamp. It was awesome.  That one time was all it really took.  The kids rounded up the bottles on their own this week into a box in the garage.  They don't really understand their business yet, but they are still very young (7 years and 5 years).  It won't be long before they know how much the different bottles are worth.  I'll milk this idea until they start taking a lot of interest in prowling around the bus stops and trash cans to find other people's bottles and cans.

The bottle picking business is a perfect, and moderately complex real-life business.  Here are some business and money-making concepts the children can learn:

1)  It's a bit like fishing, mining or forestry -- The children have a resource in the bottles that they can harvest and deliver to a market.  When the bottles are gone they have to wait until more bottles are created.  It's a real type of business that the parent can draw parallels to.

2)  Children can reconcile a complicated transcation -- At the bottle depot there is a fairly complicated transaction.  Much more complicated than a lemonade stand for example.  Bottles are classified into many types, each of which carries a different payment.  The children should monitor that the depot worker counts and values the bottles correctly.

3)  Children can learn to forecast -- If they know how much each type of bottle is worth then they should be able to calculate how much the load will yield.

4)  Children can learn to optimize -- There is no point going to the depot with just one bottle.  The children can develop a feel for how much is a "good" load and when it's worth it to make the trip.

5)  Children are incented to think creatively -- Even though I will stop them from doing it, at some point they will spontaneously realize that a can lying on the ground is worth five cents.  Step 2 is they realize that if our house is worth $7 every couple of weeks, so is every house.  I long for the day they ask me to drive them around the neighbourhood, or better yet, ask me to help build them a super-wagon to druck bottles away from other people's garbage.  Again, I will redirect them to a different business idea at that time, but it will be a wonderful day when they ask.

6)  The rewards are perfect -- If the kids don't box up the bottles and ask to be taken to the depot then they don't get money.  It's perfect.  No arguing about allowance, how much money to pay for how much chore.  They know exactly the value of their efforts and they can decide how best to conduct themselves.

Related Reading

Don't Pay Your Child For Chores

Rewards Without Psychological Damage: An Essential Tool for Parents

What to you think ... Pay for chores?  Lemonade stand?  How do you teach your kids about money?

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Comments

I really like this idea!  We

Brad's picture

I really like this idea!  We have had a lot of success teaching our kids how to manage money using an "allowance", but not as much success teaching them how to earn money.  Our allowances are equal to half their age in dollars each week.  For example, my 14 year old gets seven bucks.  He is required to put one into savings and give one to church, then can keep five for incidentals during the week.  Things like a bag of chips from the concession stand at a game or a pack of gum at the store qualify as incidentals.  We don't tie the allowance to chores, rather it is just their allocation of money for the week that they can save or spend.  They do have chores and the increased allowance by age does recognize that we expect more from them as they are older, but it is just a general expectation.

We've done a few entrepreneurial projects like lemonade stands, and some pay-for-performance projects like painting, but they always seem to fall flat.  The bottle idea or a variation is definitely one we'll try.  Thanks!

Love it! Enterpreunership

Fran {The Flavorful Fork}'s picture

Love it! Enterpreunership taught at an early age is a wonderful idea. The idea of bottle collecting is great one for all the reasons you mention and is also a wonderful way to teach our kids about the importance of recycling. I would love to see schools strengthen the skills needed for self-employment. I recently decided to leave the corporate world to start my own business and what a learning experience it has been and continues to be! Doing projects such as the one you describe build confidence, business savvy, and self-reliance.

Hi Dad...

Jimmy's picture

Hi Dad...

I did not receive your RSS feed, but like I said, I am interested about what you can teach about bringing up kids.

My childhood did not have any lessons on financial literacy. My parents were too broke and addicted to gambling to teach us any good things about money. It is not surprising that I went that way as well. Not that I am gambling, but I did not for a long time knew how to handle money well. I would say that now, I value money and at least know how to make money work for me.

One of my main goals now is to teach what I did not learnt from my parents and schools to my children. They are not old enough yet to do the entrepreneur stuff your kids are doing now. I am just at the stage of getting them to put coins into their piggy banks. They are quite thrilled to do it and always look forward to the deed when I show up with loose chains.

Recently, their piggy bank was full. So I had fun with them spread all their coins out on the table and getting them to start piling the coins into heaps of money. They were quite intrigued. After depositing their money into their savings account, I realize they have more savings then me and my wife combined. Hahaha. I guess their financial journey has begun.

My current task is instilling into them good money messages that speaks of abundance. I preach Jim Rohn's philosophy to them: Profits are better than wages. My girl can repeat that phase when I ask her to now. My younger boy, is following fast. My main point for for them to view money as something abundant. That it will come to them as they seek ways to expressed their passions. I believe that their creativity will one day see them on the route to financial freedom. I am on that journey too.

Cheers

I completely agree with the

Mom Equity's picture

I completely agree with the previous comments - we need to teach our kids about being entrepreneurial (plus I love the added environmental bonus!). I just can't see the work force being the same as it used to be moving forward. There will be less and less salaried jobs with less benefits. Quality of life comes with freedom and choices...who wants to spend 60 hours a week working and never spending time with their families? Ran across this awesome article earlier today... http://www.entrepreneur.com/article/220436 definitely inspiring!

The trouble around financial

rob white's picture

The trouble around financial matters always exist in wrong thinking.  You are doing an admirable job in instiling an attitude of value and prosperity. I love , love how your children not only enjoy earning, but then have a ball spending it! Living less than wonderfully rich never represents our original nature. Folks who get a sense of their unlimitedness, have fun with money. Folks who don’t, manage to struggle with money.

When I was young, I loved to

Christa's picture

When I was young, I loved to collect bottles and return them for profit. At football games in our small town, this was encouraged. Kids of 8 to 10 years old were sent out to collect bottles and return them to the concession stand for profit. The area was kept clean with little janitorial effort and the kids started their own businesses. Pretty sweet deal!

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