How my Kid got Financial Accountability
What is Financial Accountability?
It is related to money and how an individual maintains his financial account to help keep a strong and effective balance sheet.
My 9 year old had been asking for an allowance for quite a few months. I was avoiding this issue, but eventually when the gaga was getting out of hand, I sat down with him and in a play full way made him understand what would actually happen when he would start to get his allowance.
“You do realize that once you get pocket money, you will be accountable for how and where you spend it. However, money will be spent only when we go out as a family, and whatever you like, will be purchased by your allowance.”
My son, Puneet gave an enthusiastic nod, but was also hesitant on what is to come. I think the idea of having bills in his hand, made him excited as ever, and he was convinced that things would be under control once the process starts. After assuring me that he will abide by the rules. I promise him that he will get his first allocation on his coming birthday.
The day arrives, and I presented him his $5 bucks in a wallet. Making sure I keep the peace in the house, I made him sign a pact, which had the terms and conditions of usage. He was bursting with confidence and was thrilled to do the above. I put up the signed paper on the refrigerator and let him steam up over his achievement.
I feared the dreadful part of going to the store with a 10 year old and his wallet and I was anticipating a lot of arguments. But, I was wrong.
As we entered Target, he saw dollar deals and stopped there to find anything of his interest. I waited up patiently with my cart. He comes back with a writing pad, a stamp worth 99cents each, and we continued towards my aisles of interest since; had to finish my errands. He would stop occasionally giving me a shout out, and I would screech my cart to a halt. I would wait calmly and continue to walk, as he would start walking along with me. Finally I finished off my errands, and we were heading towards the check out lane. There were a bunch of candies piled along the check out register. He grabbed a Milky Way. I eyed him, and he was quick to do his maths and replied back, “I will still have 2 bucks left with me.”
I shrugged; wanted to shout out to him, “This is just the first week of the month, and you have another 20 days to go.” But, I thought of letting him indulge and blow it out cause this is how he will learn.
After making sure his wallet is safely tucked away; I could see the satisfaction he had in eating that candy. He nibbled at it with care and made sure he took extra care in eating it all. I was amused by his attitude.
In our next store visit, he blew up his remaining $2 and the other weeks of the month, when we would go out; he had no choice but be a spectator.
I guess he realized how tedious it was to accompany a parent for chores, and was waiting up anxiously for the coming month’s allowance.
Comes the brand new month and by his expressions I knew that was just the beginning. It took him several months to bite the temptation of spending all his allocation in one shot. But, his awareness and frustration gave me a feeling that things will take a turn.
Gradually, I started noticing he would look at bargain prices for his treats or his toys of interest. He knew which store carried his goodies at a reasonable rate as compared to which outlet had high prices. Hoping that I would opt for stores with cheaper rates, he would update me on his research and then would give me a speech on how much I could save if I opted for stores with a low price.
I used to be pleasantly occupied by his study and thought that fiscal responsibility has matured him in a positive way.
These days, he is eyeing a particular Lego toy and is saving up that desired amount. He has also shortlisted which store would give him a good price and keeps eyeing their leaflet for advertisements. My 10 year old is getting money smart and learning to live within his means by making the right decision in an open and transparent way. His desires have been curbed, and he seems to be more content than ever. His piggy bank is getting heavier month by month (with pennies), and lately he became aware of such thing as a bank account, where money grows. Now, I have to update him about interest rates.
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From Yahoo! Finance: The power of compound interest is on display only after decades of persistent saving. Don't let that keep you from starting today, though.
There are no guidelines for financial procedure. Monetary accountability can mature at any age group if they are given the opportunity and also some boundaries are set. This results in confidence and the security of an individual.