Delayed gratification isn’t always the easiest concept to teach a child.
Erin Lowry, a personal finance blogger, speaker, and author of the new book “Broke Millennial: Stop Scraping By and Get Your Financial Life Together” recalls learning this lesson when she was just seven years old.
On a recent episode of the So Money podcast, Lowry told host and financial expert Farnoosh Torabi that, for as long as she can remember, her and her younger sister were required to pay for half of whatever they wanted.
“My dad instituted a policy of 50%. If we were at a store and I saw a stuffed animal that I liked … and I said, ‘Hey, can I have this?’ My mum or my dad would say, ‘Sure, if you pay 50%.’ I was really encouraged from a very young age to start making money, especially if I wanted something. That also helped curb impulse purchases, I will say,” Lowry said.
So to start earning money on her own, she had to get entrepreneurial. After Lowry’s friendship bracelet-making business failed, she said, the then seven-year-old decided to sell Krispy Kreme doughnuts at her family’s yard sale one day.
“I asked my dad if he would stake me, and obviously, he had to be the one to drive the car to go pick up the doughnuts and pay upfront for the cost of the doughnuts. I figured I would be pulling one over on him and he would just buy the doughnuts for me.
“I ended up selling out, and I’m seven at the time. My little sister’s four. She helped me with being a little sales girl. I was calling her the booth babe of the Krispy Kreme doughnuts. We sold out pretty quickly.
“At the end, let’s say I made 20 bucks. My dad came up and goes, ‘All right. Well, it cost me $US8 to buy you the doughnuts and Katelyn worked for you for part of the time, so you need to pay $US2. Your net profit is $US10.’ He actually took the money.”
Lowry said people are “always shocked” when she tells this story because her dad didn’t simply explain how earnings and profits would work in the business world, he actually “took the money.”
“That is something that has stuck with me forever,” Lowry said. “That really kicked off my entire interest in money and how it worked.”