We Owe Our Daughters Financial Literacy
Our daughters are our future, and they deserve tools that will help them master their money.
Is your daughter financially literate? What about your niece, young cousin, best friend’s daughter? Can she balance her bank account? Manage her spending? Save for a goal?
These are absolutely essential life skills, which are too often taught to boys and not to girls.
When we don’t teach our daughters to be comfortable handling money, we set them up for a lifetime of worry, want, and dependence.
It’s time to start making financial literacy the standard for our daughters, as well as our sons.
My own parents taught me the basics early on: adding and subtracting. The value of money — earned and spent. The importance of saving and setting financial goals. I knew all of these things long before I started working. Every girl should know them.
Teaching girls about how money works and helping them become comfortable making financial decisions does more than just give them knowledge. With money, knowledge really is power. A woman who knows how to handle her money, and who uses that knowledge, has the confidence to make the right decisions for herself: to go after good situations and to leave bad ones.
Rob Henrich, Principal at Parallel Advisors and a long-time financial advisor to high net worth families, sees clear benefits in working with women who know how to handle money. “Women who are more engaged in the family’s financial journey increase the likelihood that their plans will succeed. We need to remove the taboo of discussing money in the family, and in particular with young women.”
“We need to remove the taboo of discussing money in the family, and in particular with young women.” — Rob Henrich, CFA, CFP
Henrich and his wife are raising their daughter to be financially literate. Now in her early teens, she has a sound appreciation for the value of money and how it is earned. She looks to both her mother and father for advice, then makes her own decisions about how to spend the money she earns doing chores. She is developing powerful habits that will last her lifetime.
Teaching financial literacy to girls
We begin teaching reading as young as age two. Teaching financial literacy should be no different. Teach your daughter the names of different coins and their relative value. Show her that money is exchanged for toys, food, clothes, or other items she wants or needs.
As soon as your daughter is old enough, perhaps 5 or 6 years, give her an allowance. Require that she save part of it for something she wants to have. This teaches her about setting financial goals and delayed gratification.
Money doesn’t grow on trees
Every child should do chores around the house; responsibility comes with being part of a family. Don’t link basic chores to allowances. Instead, pay your daughter for extra chores: something special and useful, like helping you clean out the garage. As with the allowance, require that she put some of the money aside for a goal (saving for college, or for a new toy, or a new phone, as appropriate).
If a neighbor pays your daughter for help (babysitting, shoveling snow, weeding in the garden), apply the same rules. Instill in her an understanding of how money works, and the savings habit, early on — long before she earns her first ‘real’ paycheck.
Play with your money
Child psychologist Laverne Atrobus, in a video for HSBC, says that at about age 7, children ‘come to realize that money means something.’ Take advantage of this by playing games with money.
Not with real money, of course. But Monopoly is still a fun way to learn to make change, manage investments, take risks, and make financial decisions.
Or play the investment game: Set a play budget, let your daughter pick a few real stocks to ‘invest’ in, and follow their results. Talk about why something is or is not a good investment. Teach her the difference between growth (a long term play) and income (a short term play). With time, your daughter will become ready for real stocks with real money.
My parents started me on the investment game when I was 12; by 16 I had saved up some real money from babysitting and they invested it for me, on stocks that I chose.
Use expert help
Many banks, schools, and kids’ organizations have teamed up to teach financial literacy. TD Bank offers financial lesson plans tailored for children in grades K-12. The American Bankers Association offers tools and games, from information on talking with your kids about money, to everything you need to play Banker’s Bingo.
HSBC’s website can help you explain the difference between saving and investing. They even use classic fairy tales, rewriting them to teach financial independence.
Recognized and reliable financial services firms are getting into the act. They may have special accounts for children, or programs in schools, or even apps designed to teach kids about money.
Check with your own bank, your library, or your child’s school. If no program exists, ask the experts in these places to help you design one, then offer it to other families. Everyone will learn, and you will be a role model for your own and other children. You might even end up with a side hustle and a little extra income!
Our daughters are our future. They deserve the tools that will help them master money, find security, and avoid want. It’s our job to teach them.
If you liked this story, you might also like…
