Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine

by Mike Michalowicz

PROFIT FIRST KIDS Regardless of how you get your money, the universe seems to find a way to make us earn it. This is why I don’t gift my kids an allowance. Instead, I set up a job list (a variant on chores) with corresponding pay rates and post it on the refrigerator. (You can download one from the Resources section at MikeMichalowicz.com.) The kids decide how much they earn by how much they work for it. As I write this, my daughter is on a six-week vacation in Hawaii that she paid for herself. Three years back she went to Spain on her own dime. This is surely a little bit of Daddy’s bragging, but also I want to drive home the point that the goal of Profit First for kids is to make them appreciate the value of money, learn to manage it, and strip away any sense of entitlement. Here’s the basics of how to do it: Give your kids some mailing envelopes (you know, the snail-mail type) and have them label each one: One for the big dream, like my daughter’s horse. Have them stash up to 25 percent of their chore money in this envelope. One to help support the family. This number should be a recurring number, such as five dollars a week to contribute to groceries or entertainment. The key is to have a recurring fee so they get used to having to pay out something on a regular basis. Make sure the number is age appropriate. One for impact. Have them put 5 to 10 percent into this envelope to give to a charity of their choice, or to use in a meaningful way . . . like starting their own...