If you’re a parent of young children, you may have wondered how and when you should be teaching them financial skills – it is never too early! We have been sharing our advice through our blog posts to help with that, and for Fathers Day, we have six practical steps for dads who want to raise financially confident daughters:
Role model financial responsibility by talking about your work.
Of course, young boys can view their fathers going to work as positive role modeling, but research* has shown that girls who have financially responsible dads go on to achieve more educational and workplace success themselves. Especially for dads who have STEM-related careers (math, science and technology), it’s important to explain what you do, why you do it, and even engage them by teaching basic computer coding, or relating math homework to something you do in the workplace. This is more crucial for parents of girls as those are typically viewed as male-dominated career fields. ‘Take Your Daughter to Work Day’ still exists in some companies, but it shouldn’t be the only time your little girl sees what you do for a living!
Invite your daughter to rely on you for workplace advice.
In a recent article, it was found that girls may gravitate towards their dads for career and employment conversations, especially when mom is not part of the traditional workforce. In a fascinating look at some Danish companies, another study found that there is such a thing as a “daughter effect”, where CEO’s who had daughters were successful in closing the gender wage gap at their own companies. These dads were forces for change in those spaces, and it started with having a daughter (there was no change in the companies whose CEO’s had sons, remarkably). How do you make this concept simpler for little girls? Start conversations casually, even while riding in the car, with statements like, “What do you want to be when you grow up? How do you want to support yourself? Do you think you’d be able to get a job doing that?” and then truly listening to their answers. You may not be able to come up with a great segue into how they can earn as much as their male counterparts, but it will build a line of open communication about careers and wages.
Model good savings practices.
Should your six year old daughter know what a 401K is? We say, yes! Elementary aged children are not too young to understand concepts like saving, saving for the future, and leaving the workforce. They also are able to understand what “investing” means, on a simple level. You may not want to hand your first-grader or middle schooler a handful of cash to play the stock market, but they can understand investment in other ways, such as “investing” their time in a large project that they can see to fruition. While Reuters found that women are better investors, a study* from North Carolina disappointingly found that parents are most likely to discuss and help their sons invest their money over their daughters.
Avoid oversharing financial problems with your daughters.
Because girls are more emotional and empathetic, they can take on the stress of finances when parents overshare about issues. It can be tempting for dads to share more with their daughters versus their sons, because they are receptive to longer periods of listening. Some steps to take to prevent your child from bearing financial burdens (real or emotional) would be: not giving your child “secret money” (ie: hiding amounts from a spouse or step-parent), don’t use money as an emotional reward (“if you stop crying, I will give you a dollar”), and only sharing about budgets or financial problems in age appropriate terms (avoid using phrases like “We can’t make the car payment this month because you need a new baseball mitt”. Instead simply say “We can’t afford that new mitt this month, but I can’t wait till we can save up and buy one for you next month!”). Children don’t need to be shielded from all financial strain, but they don’t need to have specific details.
Teach your daughters how to negotiate for a raise.
With the reality of the current gender wage gap, it’s becoming more important for girls to know how and when to ask for a bump in pay. This is more applicable to older children who are closer to searching for a job, but some financial experts recommend doing something similar to a mock negotiation. This practice might sound over-the top, but practicing respectful and assertive communication can help girls feel empowered in safe practice forum. What can you have her negotiate? Allowance amounts, curfews, and cell phone usage are just a few ideas for older teens. Of course, you just might get more than you bargained for if your daughter becomes adept at presenting her case!
Teach your daughters how to support themselves without a financial partner/spouse.
Women are marrying much later in life than earlier generations, a trendthat doesn’t show any signs of slowing down. Because of this, there is now a larger gap between when a young woman graduates high school and leaves home, and when she joins forces with a partner or spouse. In the in-between years (or if she chooses not to get married at all), giving your daughter tools for financial success will be extremely important. Some ways to do this would be helping her construct a realistic budget (yes, children can have budgets for expenses in middle school and high school), looking over her retirement and investment options at her current job, and showing her how to do her taxes or put together info for a CPA when she’s older. Don’t forget to use yourself as the best example, and pull her into events like shopping for car insurance, negotiating a loan, or paying a credit card bill, which can give her real-life skills.
Feeling a bit of pressure after reading all that? Don’t worry, you don’t have to be perfect. The best financial role models are the ones who are intentional and by putting these six steps into practice, you’ll be doing just that. Your daughter will be so grateful that you’ve helped lay a secure foundation for her financial well-being!
*Linda Nielsen (2014) Young Adult Daughters’ Relationships With Their Fathers: Review of Recent Research, Marriage & Family Review, 50:4, 360-372, DOI: 10.1080/01494929.2013.879553
*Lynsey K. Romo & Anita L. Vangelisti (2014) Money Matters: Children’s Perceptions of Parent-Child Financial Disclosure, Communication Research Reports, 31:2, 197-209, DOI: 10.1080/08824096.2014.907147