Wall Street has been notoriously male dominated since its inception. This pattern has traveled down to elementary-aged school children. Even now, girls are often discouraged from entering finance, math, or stem industries. It’s concerning that many young women may still be discouraged from learning about money. Here are five tips on how to help raise your daughter to be financially independent.
1. Open a Bank Account
A good first step in teaching your child about money is opening a bank account in their name. If your child is under 18, you may have to open a joint or custodial account. Opening their own bank account, even if it is a joint or custodial account, teaches them about the value of money and the importance of saving. When they receive any money for their birthday or a holiday, take them to the bank and deposit the check with them so they can watch their money grow. When they are old enough to have their own job, they can deposit their checks directly to the account. Saving real money that they earned on their own will set the foundation for managing finances into adulthood.
2. Foster Good Habits
As with anything, good habits need to be developed to make progress toward our goals. Instill financial awareness in children by highlighting price differences on menus and in stores. When they are old enough to work and start handling their own money, help them create a budget that allows for leisurely spending (to an extent, of course) so they do not feel too restricted. This will teach them to budget and save for things they really want.
3. Make it Fun
Learning about money should be exciting, not boring or intimidating. When children are younger, come up with a game to make learning about money enjoyable. One idea is to place a candy into a box in front of your child. Tell them they can eat it now or put it back in the box. If they put it back into the box and wait a minute, they can get two candies. This simple example can explain to them the value of keeping their money in the bank so it can earn interest. If your child is older, you can delve into more complex topics such as compounding interest.
4. Allow Them to Make Mistakes
As much as we try and teach our children the lessons we have learned throughout our lives, people tend to learn more from the mistakes they make themselves. Allow them to make mistakes on their own and guide them in the right direction when they do mess up.
5. Remind Them Money Isn’t Everything
It can be hard when teaching money lessons, especially for parents employed in finance related industries, to remind children that despite its importance, money isn’t everything. Bond with your kids over activities that don’t require money, such as outdoor activities, so they learn new and different ways to enjoy life while saving, or when money is tight.