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How My Mom Taught Me the Basics of Financial Literacy

May 16th, 2013 | By Sandy Spring Bank

How My Mom Taught Me the Basics of Financial Literacy
by Jennifer Salkeld, Contest Winner

National Financial Literacy MonthThe lessons in financial literacy began early in my house when I was growing up.  We did chores during the week to earn our allowance.  Rather than paying us each week, my mother added our allowance to “the books.”  She kept a small ledger style accounting book, tabbed for sections for each of the four children.  Our allowance was “deposited” onto our ledger page weekly (or whenever mom remembered – she taught us journal entries as well) and we got the thrill of watching that number grow.  When we needed spending money, mom would count out the cash requested from her wallet (aka the VAULT) and debit it from “the books.”  We were not allowed to “overdraw,” but we were allowed to borrow from our siblings after negotiating a reasonable interest rate; taking on a chore or two of theirs in addition to paying back the loan.

It didn’t take long to get an appreciation of finances!  It took me several weeks’ allowance and one extra cutting of the grass to buy that new top that I absolutely had to have. A few weeks later the thrill of that new top was gone, but the lesson was not lost.  I spent my own money much more carefully than I ever had my parents’ money.  I also learned to appreciate the things that my parents purchased, knowing how hard it was on their own budget and that they multiplied it all by the four of us.

For me, the transition to a checking and savings account with a bank were a snap – I understood the concepts, knew the math, and proudly balanced my checkbook each and every month.

 

Last month we celebrated National Financial Literacy Month by offering our readers a chance to share their stories with us. Each week, one winner was selected to receive a $100 VISA® Gift Card and have their story published on our blog. This is the second entry in this story series. The first entry can be found here. Thanks to Jennifer for sharing her story with us!

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