Kids are as good with money as politicians. Probably better. I decided a while ago to give my kids some business/finance lessons to help them avoid some of the mistakes I’ve made (just marry into a rich family kids, it’s much easier!).
One of the first lessons I gave them was on hiring consultants. I explained that you always want to let the other person name a price first, so that you maintain the upper hand. Two of my boys were going to hire their sister (with my money, mind you) to design a logo. But to be fair, I explained the same rule about maintaining the upper hand to her, and then sat back and watched what happened. It went something like this:
Son 1: “We would like to hire you to create a logo for us for the website. How much do you think you would charge?”
Daughter: “I–”
Son 2: “We were thinking 5 to 10 dollars.”
Me: *that sound you make when you snort, and try to turn it into something that doesn’t sound like you’re trying not to laugh*
I then guided them a little, and they discussed how many preliminary drawings she would be expected to create before the final one. They asked her if she was willing to do it, and how much she would charge.
Daughter: “Sure, but I don’t really need any money to–”
Son 1: “I was thinking 20 dollars”
Me: *more trying not to laugh*
I guided them a bit more, and eventually they settled on $0.50 per drawing, for 6 preliminary drawings.
Son 2: “Plus $5 for the final drawing!”
Son 1: “So that will be $8 total, plus a $2 bonus, so it will be $10”
Me: *trying not to yelp in pain from biting my tongue*
I explained that they shouldn’t offer bonuses like that, so they agreed to $8 and wrote up a contract. (Incidentally, the logo she created is below, and is the “favicon” that appears in the browser tab next to the website title, when viewed full size. Best $8 I ever spent!)
Later, when I was driving in the car with the boys, I asked them how they felt the negotiations had gone.
“Good!” was their enthusiastic reply.
I then asked them what would have been different if they had been paying her with their own money.
“Oooooohhhhh” they said. “We would have paid her a lot less!”
There’s hope for them yet. And I was beginning to think they were destined for congress!