27 September 2023

Making finance fun can keep girls safe

Start the conversation

Dana George* says there is no way to protect girls from everything, but making sure they’re financially savvy can give them the confidence to get through tough times.

Think of the girls in your life — your daughters, nieces, or granddaughters.

How much do they know about finance?

If you’re not sure, it may be a good idea to find out.

Girls who learn about money today will be more confident in their ability to take care of themselves as adults and less likely to be dependent on someone else.

It’s impossible to overstate the value of teaching girls to be financially independent, rather than depending on their potential future husbands.

Statistics show that 30 per cent of adult women have never been married.

Married women are likely to outlive their husbands by five years, on average.

Teaching financial literacy now can lead to a lifetime of security and confidence.

In addition, the Credit Suisse Research Institute reports that females currently control 40 per cent of global wealth.

That percentage is expected to be closer to 77 per cent by 2029.

Whether they earn the money themselves or inherit it from parents or a spouse, women will control the purse strings.

There’s also a very serious reason why it’s important for women to be financially savvy.

Studies have shown that as many as 99 per cent of domestic violence cases involve financial abuse.

Seven out of eight victims who leave their abusive partner report that they return due largely to financial difficulties.

Having a solid understanding of money can help them avoid becoming stuck.

Although it’s important that girls and women be financially literate, studies show that many women lack confidence about money.

A 2012 study, Having it All: Girls & Financial Literacy, showed that most girls believe that they will grow up to be independent and financially successful.

However, it noted that girls lacked confidence when it came to making financial decisions, with only 12 per cent considering themselves ‘very confident’.

The Global Financial Literacy Excellence Centre asked 150,000 randomly selected adults — representing more than 140 economies — basic financial questions.

Across the board, in both advanced and emerging economies, only 30 per cent of women were deemed financially literate.

According to the study, women were disproportionately more likely than men to answer ‘do not know’ to a financial question.

Rather than taking a shot at the answer, they chose not to risk it.

That lack of confidence can impact everything, from buying property to investing for retirement.

A 2017 study conducted by Willis Towers Watson found that more men than women consider saving for retirement a top priority.

It’s not that women don’t want to plan for retirement, but a greater percentage feels unable to do so due to other financial pressures.

Not surprisingly, 54 per cent of men believe they will have enough money to last 25 years into retirement, while only 39 per cent of women have the same level of confidence.

It’s up to you to make sure the girls in your life have what it takes to become financially savvy.

Here are some stress-free ways to introduce your daughter, niece, or granddaughter to finances.

Give her an allowance each week (a good rule of thumb is to match the dollar amount to her age) and teach her the value of sticking to a budget.

Help her open a savings account and talk about how compound interest will help her money grow.

Teach her how to budget and the importance of ‘paying herself first’ by putting money away in savings.

Emphasise the importance of building an emergency fund.

Encourage her to save for the things she wants and allow her to experience the satisfaction of buying things for herself.

Show her how to set personal financial goals.

Play games that involve money, such as Monopoly, The Game of Life, and Payday, or make up games of your own.

It may sound silly, but games offer an opportunity for relaxed discussions.

Create a fantasy investment portfolio and track it together.

Customise your child’s portfolio to reflect her interests, and let her choose her own investments.

A fantasy portfolio allows girls to learn more about how investing works, including the ups and downs of the market.

When she’s a bit older, help her open a no-minimum brokerage account and encourage her to become comfortable with investing.

By the time she’s in her teens, make her part of the family budget meeting.

Make sure she understands what a credit score is and how to make the most of hers.

Teach her the danger of high-interest credit.

If she wants to attend university, help her come up with a plan for how to pay for it.

The more you teach a girl about finances, the more confident she will become.

While financial literacy cannot insulate anyone from life’s challenges, or prevent them from falling for the wrong person, it can help instil confidence.

At the end of the day, confidence may be what she needs to stay safe.

*Dana George has been writing about personal finance for more than 20 years, specialising in loans, debt management, investments, and business.

This article first appeared at.fool.com.

Start the conversation

Be among the first to get all the Public Sector and Defence news and views that matter.

Subscribe now and receive the latest news, delivered free to your inbox.

By submitting your email address you are agreeing to Region Group's terms and conditions and privacy policy.