Thursday, 19 September 2013

Fiscal Responsibility

Money smart concept #2
Fiscal Responsibility
Fiscal responsibility should be introduced to children so that they can start keeping records of how much they have, how much they spent and how much they saved. They need to feel responsible for what they do with their money. Exposing children to this concept with help them make smart money choices and avoid overspending.

            The discipline to be aware of how money is used through keeping records in difficult to develop. I myself have a hard time managing my receipts so that I can balance my spending. Because of my personal difficulty in this area, I have become conscious about teaching my kids about it. At the very least, I ask them to show me the receipts fo the money I give them.
            One consequence of not keeping records is overspending. We need to give kids opportunities to manage their money wisely in small way.

Spending and allowances
Washington SyCip, founder of SGV, approached his father about the idea of going to the United State for a graduate degree. My father’s policy was always this: whatever amount he had to spend on education,  no question. Albino SyCip agreed to his son’s request and Washington immediately chose Columbia University. To cover his expenses, he drew upon a letter of credit established for him by his father through the office of Hiram Matthews, a friend of Albanio’s and the head of international operation at the Irving Trust Company. The senior SyCip instructed his son to draw the funds as he needed them, instead of providing him with a fixed monthly allowance. The way, says SyCip, you become careful with your money. Had he given me so much per month, I would almost have felt that I had the right to spend it all.

Spending Diary
Ask your child to keep a record of how he spends his allowance. Explain that all expenses should fall within a total budget. Vary the exercise depending on age. For young kids, it can just be a list of all the things they spent on and the amount. For older kids, it can be in a credit/debit format (explain the language) with attached receipts.

Reminder of allowance

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