The TOP 3 financial concepts to teach girls in honor of International Women’s Day ✨.

First financial concept of importance 🧾 BUDGETING 

I’m a mother of four daughters 👩‍👩‍👧‍👧 and the owner of a financial advisory practice which helps (mostly) female clients from ages 15 (my youngest daughter) – 80+.Through my work and personal life, I’ve learned a lot about important financial steps to take at every age. Many of these lessons are applicable to everyone, not just women, although we women DO need to pay particular attention to them as we are often disadvantaged when it comes to financial security 🔐.

First of all, we must talk to girls about saving  and investing, at early ages. When my girls were young, we often spoke about the ‘SPEND SHARE SAVE’ concept. Each gift or small earnings from household chores would be broken into three envelopes 💌 . One would have the money I expected them to save, one would have the money we would donate to something that was important to them, and the last one would have funds they could spend. It wasn’t a perfect system, but it at least prompted financial conversations.

As they got older, it was very important to me that they learn about budgeting. We tried many things, but finally ended up with a clothing 👗 allowance. I had each of them make me a budget proposition for the season. It may say, “2 pairs of shorts; 3 tee shirts; 2 bathing suits, etc.” (we had many hand-me-downs in our family – so they typically had to just fill in to complete their wardrobe.) They also had to come up with prices 🏷 for those items. 

And THEN – then the fun began. We would negotiate 🤝. Did they really need 2 new running bras? Or should we add in a new pair of 🏃‍♀️ running sneakers? I would be the final arbiter of the allotted amount, and then they could spend it how they wanted. They may decide to blow the whole amount on one fancier item, and then be stuck with old clothes for the season, OR, maybe they find a good sale, and be able to stretch their budget to include more items. We would also discuss the impact of brands 🎩, and how often you’re paying just for a name. Sometimes that is important to them, and sometimes not, but they at least had the opportunity to think about how they felt.

So while this is what finally worked for my GIRLS 👩‍👩‍👧‍👧, I can imagine it working for many children – you just have to find out what motivates 🧐 them enough to care about the costs. Maybe it is video games for one child, 📚 books for another, sports equipment for another. I can probably find one of those old budgets we used if it interests you – just contact me and I’ll be happy to share it!

Second financial concept of importance – start long-term investing early 🌱.

Next, when your kids start working and have reportable income, I would encourage your family to consider opening a ROTH IRA for them. When they are younger than 18 in most states, it will likely have to be a Guardian ROTH IRA until they are adults . But consider opening this retirement account, either with their funds, your funds, or a combination. And then, as children have 50+ years to invest before retirement, that long time horizon allows them to have those funds invested in an aggressive 💪🏽 portfolio of equities (stocks). 

AND, discuss what the account actually is, why you’re doing it, how it works, etc. There are plenty of ‘early investor books’ to help, and I also have some great guides to investing on my website if you need help with the language. I don’t think many young children will 100% grasp the concept, BUT, it DOES provide an early introduction to investing. Later, when they start their first adult job 👩🏽‍⚕️, and are presented with the opportunity to save in a retirement plan, they will be familiar with the concept and hopefully appreciate the importance of investing early. This strategy allowed our family to discuss the concept of ‘Beneficiaries’ of retirement accounts. My daughters chose their sisters as their beneficiaries, and even threatened to remove them when they were been annoying! 😂

Third financial concept of importance – BE INVESTORS! 🌱 🌳

The third concept that I work every day to help my clients, especially women, grasp, is the importance of INVESTING. While this is a generalization, I will say it rings true based on the experiences in my own practice, but women tend to be more conservative investors than their male counterparts. I’ve had way too many women come to me with their retirement savings that are underinvested – either sitting in cash 💵, or some type of product that is not well-suited for providing the potential of higher long-term returns.

Women MUST start to feel more comfortable with taking the investment risk that is associated with more volatile 📊  stock investing, as over the long-term, equities (stocks) provide higher potential for return than more conservative options such as cash or bonds. This can make some investors uncomfortable, so of course we would never advise an investment strategy that lies outside of their comfort zone. But women DO need to understand that sometimes their personal definition of the comfort zone should be questioned, and they should feel educated enough to feel comfortable with the appropriate mix of investments aligned with their time horizon and goals. 🥅

In summary, I like to say that I help clients make their money work 👷🏼‍♀️ for them, instead of them working for the money 😓.

Wow. That was a lot to digest. Obviously, there are MANY more important financial planning topics that occur for anyone, not just women, and at every age, but I wanted to share with a few of those I discuss often with my clients, their children, and their parents. I would be honored to discuss them with you. Please contact me at your earliest convenience so I can share with you my philosophy behind educating and partnering with my clients, in order to help them lead happy, healthy, financially rewarding lives.

Peace ☮️  and love❤️,

Catherine

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.