Family Finances

MintFamily with Beth Kobliner: 5 Money Lessons to Teach Our Daughters

If you have sons, you know that they are much smarter than your daughters. And it follows logically that you’d talk to your boys about important issues of the day much more than you would your girls.

If I made these statements just about anywhere today, I’d either be shouted down or completely ignored since I would be labeled a raving lunatic.

And yet. When it comes to money, American parents are sadly adopting these archaic, harmful attitudes.

Look no further than a recent survey from T. Rowe Price. Of the nearly 2,000 parents and kids surveyed, 58% of boys say that their parents discuss financial goals with them, whereas for girls that figure is just 50%. And lest we blow this off and assume it’s all in their pretty little heads, what’s even more amazing is that parents admit that they believe their boys are simply smarter than their girls when it comes to finance. A full 80% of parents who have a son think he understands the value of a dollar, compared with only 69% of parents who have a daughter.

Hmmmmm. Guess it’s no mystery why boys (and, let’s be honest here, men) think they are smarter about finances than girls (or women). According to the survey, 45% of boys feel very or extremely smart about money compared to just 38% of girls.

So how can parents get over the gender bias (that most don’t even realize they have) and raise a generation of boys and girls who believe they’re bothmoney geniuses?

The antidote may be found in the wise words of Gloria Steinem: “The first problem for all of us, men and women, is not to learn, but to unlearn.”

Parents: start unlearning! Here, five critical lessons to impart to your daughters.

1. Don’t buy into the “bad at math” myth

I have a friend whose mom told her throughout her childhood, “We’re just not good at math.” Well, guess what? My friend grew up so intimidated by numbers that she simply ignored them, even when paying—or not paying—her bills, and it took her years to get out from under huge credit card debt.

Since math and money are so inextricably tied, it’s possible that you’re transmitting anxieties about both, leaving your daughter less confident to handle personal finance decisions. Research from the University of Chicago shows that mothers can pass down math anxiety to their daughters, even just by little things we say.

Math attitudes form as early as preschool, according to the researchers, and money habits by age 7, according to a Cambridge University study, so it’s best to start early—but it’s never too late.

Nobody says you need to know enough to help your daughter with her Calculus homework. But when shopping at the mall, help her calculate 30% off the sale shoes she’s eyeing. And if you can’t do it in your head, use your smartphone’s calculator. Being comfortable with math doesn’t mean you need to know the answer automatically, it means you’re not afraid to try to get it—any way you can.

2. Forgo the bossy talk

Although I admire Facebook COO and Lean In author Sheryl Sandberg’s mission to #banbossy, I think there are a few realities. Women at the top are still held to a different standard than men—as are women at every rung. A recent study conducted for Fortune.com found that out of 248 employee reviews, 71% of women received negative feedback, versus a mere 2% of men. The most common critiques of women? You guessed it: bossy, abrasive, and aggressive.

“Among these words, only aggressive shows up in men’s reviews at all,” notes study author Kieran Snyder on Fortune.com. “It shows up three times, twice with an exhortation to be more of it.”

So how can our daughters thrive? Whether raising her hand in class, offering to lead a team project, or applying for a competitive internship, being assertive now will no doubt help your daughter become the boss one day. (And that’s the kind of “bossy” we like.) But I also believe that it can be done with grace and calm.

Female leaders are something we’re sorely lacking in the workforce. Analysis from the Pew Research Center shows that 40% of American families rely on Mom as the breadwinner (and, sometimes, the sole provider). However, only 5% of Fortune 500 CEOs are women, according to Catalyst, an international nonprofit specializing in women and business. Parents can teach their daughters that being the boss is open to everyone.

Lastly, share with your girls this good news: Though the pay gap persists with the average woman making 77 cents for every dollar a man earns, it’s a whole lot better for your daughter: Women ages 25 to 34 make 93 cents on the dollar, according to a Pew study. While that’s still not equal to men, and the gap only widens as women take time off to raise families, we’re at least moving in the right direction.

3. Be discriminating when it comes to dollars

It’s become a cliché: “Make good choices.” As parents, we’ve said it when our teens go to a party (thinking alcohol and drugs), and even when they just head to the mall (thinking overspending). It’s become as ubiquitous—and meaningless—in child-rearing as the stale staple, “Be careful.” But I contend that when it comes to money, no advice hits home better on an every-day-in-every-way basis.

This is especially true for our daughters. Female college students are 2.4 times more likely than their male peers to have two or more credit cards, according to a study published in the Journal of Family and Economic Issues. And because of that wage gap I mentioned, once women graduate they have a harder time paying off student loans, making them more likely to continue racking up credit card debt.

You can help your daughter avoid the debt trap in two major ways: (1) Advise her not to get a credit card until her junior year, when she’ll be wiser and more responsible; (2) Teach her that she should only swipe for items she can afford to pay back in full that month. That might be the best college lesson she’ll learn.

4. Trust your investing instincts

We hear a lot about women suffering from a lack of self-assuredness, coined as the confidence gap. But men’s overconfidence can be just as harmful, especially when it comes to investing. A classic study in the Quarterly Journal of Economics found that men, thinking they could beat the market, traded 45% more often. By avoiding trading fees with the “buy ‘em and hold ‘em” philosophy I recommend, women enjoyed greater returns.

Gender influenced investing decisions during the Great Recession in 2008, too. Men were 10% more likely to panic and cash out of the stock market, while women’s patience and long-term vision allowed them to stay the course—and reap the benefits as the market rose to historic heights in 2013.

So how do we encourage our daughters to take the reins in investing? Like almost every kids and money topic, it starts in the home. In a recent study from North Carolina State University, kids confessed that Mom and Dad rarely talk about investing, and if they do it’s with their sons, not their daughters.

It may not even be conscious, but we still fall into traditional patterns when it comes to lessons we teach our boys and girls—and we need to be aware of it. If you’re not sure what to teach, a great resource (and gift) for daughters is Burton Malkiel’s terrific book, The Elements of Investing.

5. Be your own Money Genius

I was shocked when Anna Maria Chávez, CEO of Girl Scouts USA and a fellow member of the President’s Advisory Council on Financial Capability for Young Americans, stated at our inaugural meeting that while Girl Scouts earn $800 million a year selling cookies, only 12% feel confident about making money decisions.

I’ve seen it firsthand. Girls are often eager to let someone else handle the finances—someone who seems “better” with money. This might be a college roommate, a friend, a boyfriend, or even dear old Mom and Dad. Make it a rule that even if she’s budgeting with roommates (or, one day, her spouse), she always looks at every restaurant check and utility bill—and double-checks the math.

What’s the most important money lesson you wish to pass on to your daughter?   Please share in the comments below or on my Facebook page.

© 2014 Beth Kobliner, All Rights Reserved

Beth

Beth Kobliner is the author of the New York Times bestseller Get a Financial Lifeand is currently writing a new book, Make Your Kid a Money Genius (Even If You’re Not)to be published by Simon & Schuster. She is a member of the President’s Advisory Council on Financial Capability for Young Americans. Visit her at bethkobliner.com, follow her on Twitterand like her on Facebook.