Every street corner these days has posters about empowering girls. This is such a stark contrast when I was a child and the idea of "empowerment" was girls "being allowed" to get a job. So much has changed since then! lol!
But while a lot has changed, a lot sadly has still stayed the same. Women are so far behind men when it comes to finances that it's a very sorry state. What is even more disturbing is how girls age 12 are already programmed to either not be interested in finances or to pretend it's not cool to talk about it. In fact, in the Investment Challenge we run, it's fair to say that except for my daughter and another female student, we have never had any other females win. One of these is forced to live in my home and gets a healthy dose of financial rant regularly, the other is an exceptional student of finance who has given tips to top traders at banks.
Why is there this gender bias? I believe it's because we have again missed the opportunity to take away the stigma of money from girls and unless we change, I fear, these young women will be left behind, just like every generation of women before have been.
5 ways to truly empower young girls1) Hold them responsible for their actions. If they think it's funny to throw their phone and the screen cracks, let them work to get back the money needed to fix it. If they want more than a hand me down computer, let them work to get it. By holding them responsible for their actions, they learn that there is a causal effect between respecting things and having to use them.
This is Money Lesson 1: If you do not take care of your things, you will spend a lot of effort and money buying more things you will not take care of. Best for them to learn this lesson in a kinder more gentle way.
2) Stop second guessing and dismissing their financial ideas. I fundamentally believe that one does not make money by following the stock gurus online, one makes it by following your gut and understanding how much risk you can manage. Ask Mr. Buffet and he will likely agree with me. When you second guess and dismiss your daughter talking about her financial dreams (which could be as simple as how she is going to save to buy a pair of shoes), you do not allow her gut and her financial instincts to develop. By telling her how to spend her own money, you are forcing her to embrace your investment philosophy versus giving her a chance to build her own.
3) Stop telling her it's not polite to ask the price! It's actually completely ridiculous to NOT ask the price. If we all were more open about how much things cost, there would be no need for "discount shopping". Every girl should know how to bargain. In my book, every girl should know how to get the best deal and not be afraid to ask for an even better one.
4) Money is not only for Saving! Every time you want to tell your child that money is for saving - stop yourself! No one makes money by just saving it in a bank account. In fact, over the last 10 years, your savings account probably paid you less than inflation! Which means, in real terms your advice actually lost her money. Money is made only by investing it wisely.
5) Teach her how to manage her money right from the start. We hear parents tell us "How can I teach her, we don't know ourselves". When we hear this, it's even more important for kids to know how to invest and manage their money. A child who learns about money, grows up to be an adult who lives comfortably with it.
Financial Literacy is the difference between your daughter working hard and getting a career and enjoying the amount she earns - or working hard and getting a career and still being broke.