Economics Lessons

I’d worked through lessons on basic economics with my two oldest children. We’d discussed gross income versus net income and profit, learned about expenses and various other topics. I thought they understood because they could rattle back definitions and general explanations when asked.

Then a parent on our homeschool support group’s Board asked if her son could sell, at one of our meetings, some survival bracelets he’d braided. After discussing it, we designated one meeting where all the kids could sell things they’d made. Thus our Kids’ Bazaar was born.

The kids spent a lot of time busily working on a variety of projects. I taught them to make and can kiwi jam and fiery Cowboy Candy. They made candles and a few other items, too. We sat down together and calculated our expenses and determined a price for our items that would cover our expenses and leave us with a bit of profit. They came up with a name for their company, made a logo, devised a motto, designed labels for their jams–complete with ingredient lists, use by dates, and warnings to refrigerate after opening. We even decorated hats with their logos and made a sign to help them look official.

On the day of the Kids’ Bazaar, their jams were a hit. At five dollars a jar, they were surprised to sell quite a few. Plus a few of their other creations sold, too. They raked in about $60. The two of them spent the drive home busily discussing their plans for their new-found wealth.

“Excuse me,” I interrupted. “You do realize that the money has to be split between you? Right?”

Somehow they’d forgotten this, but they quickly adjusted their plans. About $30 each was still a lot of money in their tiny world.

“Excuse me,” I said again. “You do realize that you have to pay me back for the money I loaned you for your ingredients and materials? Remember, I bought the canning jars, the kiwi, sugar, peppers, paper and ink, and all the other things you used to make your products? We figured out the expenses when we came up with the costs. Those expenses have to be paid off before you can spend any of what’s left.”

They’d forgotten all this. It was one thing to discuss expenses and talk about the difference between gross income and profit. It was another thing to collect all that money and then learn that most of it would pay their expenses. In the end, they made about twelve dollars. That twelve dollars would have thrilled them if they hadn’t been banking on sixty a few minutes earlier.

Since then, they’ve participated in our Annual Kids’ Bazaar a few more times. As they prepare to take a variety of stuffed animals, Pepsi jelly, grape jelly, candles, knitted hats and a scarf, crocheted amigurumi, handmade jewelry, and more to this year’s Bazaar, I know that they now fully understand those basic economic concepts. My daughter has tracked her expenses on her own and paid them all upfront. She’s calculated how much she needs to earn to cover her expenses and is excited that someone has pre-ordered enough items to cover her expenses even before the Bazaar officially begins.

This is part of what I love about homeschooling. We can cover these lessons (and many others) in a hands-on way that helps the kids understand the concepts so much better than they would from reading a textbook. While some schools manage a few such hands-on projects, we can do so more than the average school could afford to do (or than the average public school testing schedule would allow time for).

Cheryl

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