Financial Literacy for Girls
Financial literacy is a growing concern in our country today. High unemployment, foreclosures, personal and national debt, inflation, and financial uncertainty are just some of the key issues. In order to properly grasp these concepts and prepare themselves for their financial future, today’s youth need a solid understanding of age-appropriate money management and economics. This is especially important because financial literacy is not currently a standard component of the K−12 education curriculum. The responsibility for teaching these skills has fallen to parents, families, and out-of-school programs.
A few research studies have looked at youth and financial literacy. Preliminary data suggests that children are most likely to go to their parents for information on money and finances, but parents often fail to communicate and teach children effectively about these issues.
These studies have also demonstrated that teenagers appear to have a basic understanding of money matters such as saving and spending, but less knowledge about credit, debt, and long-term savings.
Other research indicates that young people are burdened by finances and more pessimistic about the country’s employment and economic outlook than in past generations. While some research has suggested that girls have even lower financial literacy than boys and also lower confidence in their financial knowledge, very few studies have focused on girls specifically.
To address this gap, the Association for Financial Counseling and Planning Education conducted a nationwide survey with over 1,000 girls ages 8−17 and their parents in an effort to better understand girls’ financial literacy and their confidence about, attitudes towards, and experiences with money.
This generation of girls is empowered and independent.
A great majority feel gender is no barrier to what they can accomplish financially, and they envision a future family structure where they are fully engaged in financial decision making and planning.
The vast majority of girls would rather make their own money than rely on their parents, and many would rather make their own money than marry someone who would support them financially.
Girls see little difference between genders when it comes to financial capability, with seven in ten saying that both men and women are equally likely to be financially responsible and a similar number saying that men and women are equally likely to be in a lot of debt.
Only 13 percent of girls believe that men are better with money than women (mirroring 13 percent of parents). Almost 8 in 10 say both men and women are likely to run a successful business.
Girls also feel strongly that a family’s financial responsibilities should be shared, with 86 percent saying that both household partners should make financial decisions for the family and 81 percent saying that both should manage family finances. Three quarters of girls also say that both partners should be responsible for raising children and for financially supporting the family.
Girls are extremely optimistic about their future lives but admit to lacking the financial confidence and knowledge to achieve their dreams. They are also coming of age in a changing landscape, many distrust large financial institutions and think that debt is a normal part of life.
Nearly all girls say it's likely that they will have a job or career they enjoy; be able to provide for their families; and own a home one day.
They are similarly optimistic about obtaining a college degree; being able to retire comfortably; being able to save a lot of money; and making a lot of money.
A very high percentage of girls also say it's likely that they will give back to society, either to their communities directly or through charity.
However, only half of girls feel confident making financial decisions, with far fewer considering themselves very confident.
Financially confident parents are key influencers.
Girls say they learn about money and finances primarily from their moms, dads, teachers or guidance counselors, financial classes in school, and friends.
The majority of parents consider themselves to be financially confident, with dads more likely to say this than moms.
Financially confident parents are more likely to teach their daughters about money management and financial literacy. Specifically, they are more likely than non-confident parents to say that they:
Teach their daughters the differences between needs and wants.
Teach their daughters how to save money.
Set a good example for their daughters for managing money responsibly.
Financially confident parents are also more likely to report already having talked to their daughters about:
The importance of saving money.
How to manage their own money.
The benefits of investing money at a young age.
Tips for Parents When Discussing Financial Literacy for Girls
#1: Support girls with the opportunities to develop the skills they need to reach their goals.
Girls are extremely optimistic about their futures. They want and expect to “have it all”. A college education, a career they enjoy that allows them to provide for their families, a nice house, and enough money to live happily and retire comfortably. Girls want to live the American dream!
In order for them to follow their dreams and achieve their goals, adults must teach them how they can get there with smart financial planning and money management. Encouraging girls to work hard and not give up in math, as math offers essential skills for everyday life and is used in many different careers, including those that involve money management.
Encourage girls to pursue fields of study that help with financial empowerment, like mathematics, accounting, finance, and business. Even if you are supporting a girl who is too young for a job, encourage her to start her own business in the community, like selling lemonade, helping with a yard sale, or babysitting. When she has some money, she can better manage it and figure out what she should use it for.
#2: Support girls’ goals and expectations for their financial future by steering clear of stereotypes about girls, women, and money.
Girls have high hopes for their future in regards to education, career, and money. However, gender-stereotypes can hold girls back or make them feel disempowered. There are some things you can do as an informed adult to make sure negative stereotypes about girls and money are not reinforced.
Don’t assume that girls are irresponsible with money, only like to shop and spend, and can’t be trusted with the credit card. How will they learn how to manage their money if they aren’t given the opportunity to use it?
Steer clear of comments that indicate that you might be uncomfortable with math. Don’t assume that girls are bad at or afraid of math and numbers. Budgeting money, planning for future purchases, and many careers require a solid understanding of math.
Encourage your daughter to pursue math and business fields like finance and economics; we need more women in these fields.
Don’t assume that girls don’t care about budgeting, saving money, and investments. Our research shows that a high percentage of girls care about these things, but a high percentage of girls also lack proper knowledge in these areas. Girls know that they need financial literacy skills in order to be successful in the future.
Tip #3: Girls’ financial literacy comes primarily from parents. Involve your daughter in your day-to-day financial activities and teach her money management skills any chance you get!
Encourage your daughter to help you with the financial tasks that you do on a daily basis, like going to the bank or ATM, cashing checks, making a budget, saving money, paying back loans, giving out allowances, paying bills, and shopping for food and other household necessities.
When she understands the complexities of money and finances, and the importance of regular budgeting and planning, she will develop an understanding of the value of money, the concept of saving, and the importance of getting a job in the future that can financially support her goals and dreams.
Too often, children only see the spending side of money, or hear abstractly that the family “just can’t afford that” without seeing the process of earning, spending, taking out a loan, paying back a loan, etc. Show your daughter that you don't just spend money; rather, you pay bills from an account that needs to be filled, that there are limits to spending, and that important decisions need to be made.
Talk to your daughter about the importance of saving, managing, and investing money at a young age. Teach her the difference between needs and wants. Does she really need a new pair of jeans, or is that just something she wants?
Work with your daughter to develop a budget so she can save for that big item she may want to buy. Most girls say they learn about finances from their moms, and many also learn from their dads. If you are not teaching your daughter about money and finances, start now!
Model shared decision making when it comes to finances.
Show your daughter that decisions about budgeting, planning for large expenses, and setting a cap for spending are made jointly between spouses or adults in the household, and that each person plays an important role in this decision making. Even if only one parent makes the money, the other parent or adult in the home might be involved in managing and budgeting this money, as well as in making key financial decisions that impact the family.
There is no better time to involve girls in a financial literacy program or class.
References
Danes, S. M., & Haberman, H. R. (2019). Youth Financial Knowledge, Self-Efficacy, and Behavior: A Gendered View. Association for Financial Counseling and Planning Education, 18(2), 48–60. https://files.eric.ed.gov/fulltext/EJ1104367.pdf
