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9 Things To Talk To Young Women About To Cultivate Financial Empowerment

Dayana Yochim  |  September 26, 2020

Women’s equality and women’s smarts go hand in hand. Building the confidence to manage your financial affairs can help girls grow up to be strong women.

On Women’s Equality Day we commemorate our rights, including the right to march to the polls in November, confident in our place there, no questions asked. 

If only that confidence conveyed into all other areas of women’s lives. 

Despite our progress in the past century — in voting rights, employment rights, reproductive rights and more — the empowerment message is often weak  when it comes to women and financial matters. 

According to a Women, Money and Power Study from Allianz Life, our money mojo started slipping even before COVID-19 descended. In 2019, fewer women (42%) reported having more earning power than in previous years (it was 50% in 2016 and 57% in 2013). Forty seven percent said they were the CFO of their household compared to 51% in 2016 and 53% in 2013. And fewer women reported feeling financially secure overall (62% in 2019 versus 68% in 2016). More than half of the women polled (57%) said they wished they were more confident in their financial decision making. 

That last part is where you come in. Let’s keep the momentum of today going for the next generations of women by cultivating financial empowerment in the young women in our lives (our daughters, nieces, grandkids, mentees, friends and neighbors).

Here are nine ways to help them build confidence in their financial knowhow.

1. Show her the magic of compound interest.  How a small amount of savings can balloon into a giant sum as it gathers layers upon layers of interest over the years. The magic is really due to time (which she has plenty of) and patience (which can be learned).

2. Tell her to put herself first — always. Learning the “pay yourself first” rule of personal finance is about doing what it takes to gain security and be self-reliant. When she gets an allowance, earns her first paycheck or finds $10 in a coat pocket, the first order of business is to stash away a portion for No. 1. 

3. Teach her the life-saving properties of having an emergency fund to fall back on. Share a situation in the past where having a cash cushion saved your butt from disaster. PS: A youngster’s “emergency” can be, for example, not having enough money to pitch in for a friend’s birthday gift. Make it her responsibility to bail herself out when the stakes are low.

4. Encourage her entrepreneurial spirit. There’s nothing better than hands on experience managing a business. Whether it’s an Etsy store for her art, marketing her babysitting skills to all the neighbors or selling clothes and other household items for the busy adults and taking a cut of the profit. She’s the boss. 

5. Help her practice asking for a raise. The pay gap is one of the last frontiers in the fight for women’s equality. At the rate we’re going it’ll take about 40 years before the gender pay gap closes. We need to pick up the pace, but it seems to be destined to slow down. The Allianz study found that fewer women asked for a promotion or raise at work in 2019 than in 2016 (27% versus 44%). There is a 100% guarantee that we won’t get what we don’t ask for. Help the young women in your life get comfortable asking for a raise — whether it’s making a case for a bump up in allowance or their hourly pay at a part-time job — so she’s confident when she makes it to the C-Suite. 

6. Explain the concepts behind credit scores. It’s basically a report card for adults, grading how well they handle their money. Tell her if she nails this ongoing test, the world of borrowing money at the best interest rates will be at her fingertips. 

7. Teach her to think and act like an investor. When Charles Schwab surveyed young men and women between the ages of 16 and 25, it found that twice as many boys than girls had an investment account, and males were twice as likely to choose to invest their spare cash. If there’s one area where women’s equality can make a huge difference in quality of life, it’s in long-term investing (specifically retirement accounts). Give her a seat at the table and expose her to investing at a young age. Here are five ways to buy stocks for kids to get started.

8. Show her the “why” behind family money decisions. You may doubt your own financial acumen, but don’t make it the reason that money is a taboo topic in your household. We learn by example and learn even more when others share the mistakes they’ve made. Open your door to offer the best education on the planet: Get your kids involved in paying the household bills. That way, they’re exposed to the math and see how money management works in the real world before they have to do it on their own. 

9. Encourage her to seek — and offer — support to other women. The best thing we can do for the women in our lives is to pay it forward. If we get a great tip about sale, we don’t hesitate to pass it along. It should be the same with money, work and life tips. Encourage her to seek out — and act as — an ally, advocate, mentor or sponsor at work and in the world. And also encourage being open about the topic with her friends and peers. 

The free exchange of ideas, experiences and advice is how we get smarter and help build our collective confidence. And that’s how we’ll push forward in the fight for women’s equality.

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