Dear Daughter,

There are few traits I can think of both in my personal life and my financial life that have had more of an impact on me than Personal Accountability.

Accountability is just a noun with a very simple definition: the fact or condition of being accountable; responsibility.

To me, one cannot move forward and succeed in life without the ability and willingness to hold oneself Personally Accountable for the outcome of one’s efforts, be they great or small.

There are going to be times in your life when you think you have given your absolute best but the outcome is less than you expected. When this occurs, the easiest thing to do is blame someone or something for your failure. The hardest thing to do is to look at yourself in the mirror and OWN that failure or shortcoming.

Let’s say you have a test coming up at the end of the week in math class. You are determined not to miss any questions and earn yourself a 4.  The whole week you pay attention in class and ask questions when you don’t understand something.  Every night you come home and practice the types of questions you were told would be on the test. Friday comes and you take the test feeling confident you aced it! When the following Monday rolls around, however, you find out you missed 3 out of 10 questions.

What kind of emotions would you feel?

Anger, sadness, frustration, defeated, resentment

No doubt you would feel all of those things and more and that is okay and perfectly normal, but how are you going to respond?

  • Blame your teacher. It’s obviously her fault for not teaching you the correct way to solve the problems.
  • Your friends were talking to you during the test and wouldn’t leave you alone. Probably their fault for distracting you.
  • You didn’t get enough sleep the night before.
  • Didn’t have breakfast
  • Your mom and I didn’t spend enough time with you reviewing your answers on the study guides.
  • On and on and on the list of excuses can go.

This response, again, is normal as it is the easiest way to deal with failure. Blaming other people or circumstances removes the blame from you and makes you feel better and more secure.

But let me ask you this……What does blaming others for your failures solve? How does blaming others allow you to ace the next test? Even if every one of the things listed above actually happened, does it really matter?

I think you know the answer.

Now change the scenario to something else – a soccer game, monopoly, chess, baking, it really doesn’t matter.

Your ability to own the outcome of your efforts will determine your ability to grow and succeed in life.

It’s a difficult thing to do. It is the hardest of the two options. It requires you to work harder and smarter to overcome obstacles.

Instead of blaming others you must take the blame yourself.

Once you take ownership of your results you will be able to truly see what you can do to improve the next time you are in that situation.

Okay, how does this relate to finances then? I am so glad you asked!

Financial Accountability is just as important as Personal Accountability. If you want to get ahead in life and earn your indepedence you must hold yourself accountable for managing your money correctly.

It all starts with having the discipline to save and invest a certain percentage of your income from every paycheck you ever receive. This can be very tough to do obviously! Worse yet, nobody is going to know if you don’t save like you are supposed to. This makes not saving a very easy thing to do!

There are things you can do to make saving and investing easier such as auto-withdrawals which we’ll discuss later. In a nutshell though, the idea is to have the money withdrawn from your paycheck and invested without you physically having to do anything. This has worked for your mom and me for a very long time and I strongly recommend it.

So what percentage of your income should you be saving? The simple answer is 20%. So if you make $50,000 a year at your job, you should be saving $10,000 of that. Look for a future Memo, Regarding ~ Savings Rates for more information on how this breaks down.

Now, it is highly likely that if you read this entire blog, a bunch of other blogs and books, save and invest 20%, and study finance in college, you’ll have some pretty darn good success with your money. There is no doubt however that you are going to make mistakes and they are going to cost you some cash. It happens to everyone! It has happened to me!  But when it does happen, you must go back and analyze what occurred so you do not repeat your mistakes.

More importantly though, always hold yourself accountable for continuing to save and invest. Just because you may lose some money doesn’t mean you can stop because you’re scared it is going to keep happening. You may change up what you are investing in, from time to time based on results, but never ever stop!

You can do this kiddo! Just remember, 20% of whatever you make is saved for your future self. When you become Financially Independent from work, then you can stop if you want to, but not before then.

And there it is!

Accountability, in its various forms, is very hard. If it wasn’t then everybody would have money and independence……….but most people don’t.

Don’t be like most people!

Love, Dad

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