How to chat money with our daughters

 

The month of March celebrates International Women’s Day, so we thought it was a great opportunity to open up the discussion on how to chat money with our daughters.

Here at UKDS, we have a desire to establish solid financial foundations for our children because we believe that financial education in the UK needs more awareness and application. By creating great financial foundations, it allows our children to mature into adults that have a healthy relationship with their financial wellbeing and are less likely to fall into bad debt.

Given that many of us who are now parents have not been subjected to a good financial education, you may be wondering how we should go about instilling good financial habits into our children? And how to even begin a conversation with them?

Why chat money with our daughters?

We have focused on our daughters for this article because recent studies have found that women are disproportionately affected by debt in the UK. Stepchange released a study in November 2023 which illustrated this and according to research from Money Advice Service, women made up 55% of over-indebted people in the UK. Of course, there are many other factors associated with these findings, however what is widely regarded as definite, is that women are subjected to added financial challenges.

Also, it is indeed more expensive to be a woman. Women are subjected to the “pink tax” on everyday products, the gender pay gap, disparities in pension savings, and lower earning potential throughout their lives. Therefore, initiating conversations about these gender-based financial discrepancies is vital. Parents should educate their daughters about these inequalities, empowering them with the knowledge to navigate and challenge such disparities.

What tips can parents use to open up the discussion of money with our daughters?

Start Early

There is research which shows that some girls start forming money habits from as young as seven years of age.

Begin discussing money matters from an early age. Incorporate basic financial concepts into everyday conversations and activities. Teach the value of budgeting, saving, and wise spending through age-appropriate means like piggy banks, allowance management, and simple budgeting exercises.

If your daughter is around the ages of 8-10 and you can stretch to it, giving pocket money is a great practical tool for them to understand money, saving and spending. Give actual cash rather than putting into an account. We have found that tangible money helps to understand value better than numbers on a screen.

Be Transparent

There is a definite taboo around money that needs to be broken. Be open about your own financial experiences and decisions. Share stories of both successes and challenges, emphasising the importance of learning from mistakes. We need to allow our daughters to make mistakes around money in order to learn and grow, so impress upon them that mistakes do happen and it is how you rectify the situation that matters the most. Encourage questions and assure your daughters that financial discussions are safe spaces free of judgement.

To start off, you can ask specific questions about how money is spent in your home to discover what they already know. You need to foster a realistic idea of household expenses such as food costs, energy bills, etc.

Address Gender Disparities

Don’t shy away from this one or get offended. We know that being a woman in the UK is more expensive than being a man. Educate your daughters about the gender-based financial inequities they may encounter. Discuss topics such as the gender pay gap, pension disparities, and the extra costs associated with being a woman. Empower them with the knowledge to advocate for themselves and challenge these inequalities.

Cultivate Financial Literacy

Equip your daughters with essential financial skills and knowledge. Teach them how to budget, save, invest, and plan for the future. Encourage them to take an active interest in their finances and seek out resources for further learning, such as books, courses, or online tutorials.

We have been recommended Cash is Queen for pre-teen and teenage girls to equip them with tools and knowledge on mastering their money.

Instil Confidence

Build your daughters’ confidence in managing their finances independently in an age appropriate way. Encourage them to set financial goals and take ownership of their financial decisions. Involve them in cost saving activities at home. They may help with identifying discounts in the supermarket, or planning a free family day out. Museums, libraries and galleries are great places to go to for free.

Remind them that it’s okay to seek help and advice when needed, but ultimately, they have the capability to control their financial futures.

Foster Resilience

We find through our helpline, that financial resilience is low in the UK. Not just from a savings point of view, but also from a coping mechanism point of view. Prepare your daughters to navigate financial challenges with resilience and resourcefulness. Teach them the importance of emergency funds, insurance, and contingency planning. Emphasise the value of perseverance and adaptability in overcoming financial setbacks. Teach them not to be ashamed of making mistakes or asking for help with their finances.

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The biggest take away from this article is that money need not be a taboo subject. Foster open conversations about finance with your daughter which will in turn, empower them to make informed decisions, build financial resilience and strive towards a more equitable future. They will also be equipped with the tools to help themselves out of debt if they find themselves in that situation, rather than burying their head in the sand.