Tips to help all your family become financial feminists part II

Give all your kids a financial education for a solid head start in managing and investing money.

By: The Family Money Team

04.11.2022

5 minute read

Educate your kids about the gender pay gap and explore some ways to achieve financial parity between genders.

Key Points

  • Explain how the gender age gap impacts women
  • Demonstrate financial feminism through actions
  • Talk about how money can be acquired and grown
  • Encourage daughters to explore traditionally male dominated fields

Women in the United States lag behind men in financial literacy. While most women have an understanding of money and household finances, there is a significant disparity in knowledge when it comes to acquiring wealth and managing personal finances compared to men. Unfortunately, there is not just one solution to level the playing field, especially since women generally make less money, live longer, and are more likely than men to take time off from their careers to care for family members.

Historically, women did not have access to education, money, and power. Even today, 102 years after Congress ratified the 19th amendment for women’s right to vote, there remains a significant pay gap. Overall, women earn only 84% of what a male wage earner makes in the same job. That means, women have to work 42 more days than men to earn the same amount. And while strides are being made, women tend to be overrepresented in low wage jobs and underrepresented in high paying, top tier managerial, CEO, and CFO jobs–which may explain part of the compensation disparity.

Another reason that may contribute to the economic disparity may be because most women must take off time from work to bear children. According to the Pew Research Center, mothers in the U.S. are more likely than fathers to say they needed to reduce their work hours or felt like they couldn’t give 100% at work. The US Family and Medical Leave Act of 1993 (FMLA) requires 12 weeks of unpaid leave annually for mothers of newborn or newly adopted children if they work for a company with 50 or more employees. 92 countries across the world offer paternity leave for male employees, but the United States does not mandate a specific, paternity leave policy and many men do not take leave because of the potential cut in pay or the negative impact on their careers.

But times are changing and not only do women have the power to hold elected office to lead the charge for equitable family leave policies but also can educate their entire families in becoming true financial feminists. Financial literacy begins at home and is not just education for daughters, but for your entire family. Providing a strong foundation in financial literacy leads to the opportunity of achieving a college education, the ability to earn more money, homeownership, investing opportunities, personal financial stability, and retirement options.

Teach investing early

Women make over 90% of the household decisions, but only 56% of married women make major financial decisions. This means they control how and where money is spent and saved in the home, but women continue to defer to their husbands with the big financial choices like investments or money earmarked for retirement. According to the Boston Consulting Group, globally, women’s accumulated assets could reach $93 trillion by 2023–despite a gender wage gap. Generally, women want to use their money to make a difference in the world and invest in companies that correspond to their beliefs. It used to be considered “unladylike” to discuss money, but that is no longer true. It is important for all your kids, especially daughters, to understand financial terminology so they have a clear voice when discussing finances. A good topic for a dinner table discussion to share with your children is sustainable investing–an investment discipline that considers environmental, social, and corporate governance. Examples of sustainable investing include clean energy, community development, climate change, workplace benefits like family leave, and human rights. It is exciting to invest in a cause that resonates with individual personal philosophies. Ask your children how investing can impact the world in which we live.

Nurture financial independence and curiosity

Daily life presents multiple opportunities to help your daughters become ready for the real world. Family Money is just one way young women and men can learn to manage their money. It allows them to learn the value of a dollar through chores and how long it takes to save to reach their financial goals. Exposure to money-related activities may peak her interest in personal finance early in life. Encourage your daughters to not only save money but research ways earnings may be invested at a later time. It is important for your kids to understand investment terminology like debit, compound interest, ROI, blue-chip, 401(k), S&P 500, mutual funds, and diversification. Understanding these basic terms solidifies their understanding of the stock market and why investing wisely long term may be less of a risk than popping in and out of the stock market for quick gains. Talk to your kids about some of your investments including any mistakes along the way. Perhaps try flashcards to test their financial vocabulary. Explain how the gender gap in wages places women at a disadvantage with both saving and investing for the simple reason that there is less money. Ask your older kids how they think the gender pay gap can be closed. You may be surprised by their answers.

Encourage daughters to explore traditionally male dominated fields

Women have long sought employment in fields like teaching, nursing, secretarial, and clerking and represent between 84 and 98 percent of these occupations, according to U.S. Census Bureau data.

In the United States, only 6.5% of women worked full-time in male-dominated occupations in 2020. Male dominated fields include those in: finance, IT, software development, mechanical engineering, plumbing, truck driving and architecture. By nurturing your daughters' interest in well paid, non traditional jobs, you are helping to level the playing field for all women. If your daughter shows an interest in the math and sciences field, nurture her interest and help her overcome potential societal bias to follow more traditional career routes. According to Scientific American, girls tend to have less positive math attitudes. Generally, they experience math anxiety in their teen years and feel less confidence in their math skills than boys, even when they scored the same on tests. This type of math insecurity may lead girls away from the more lucrative math and science centric fields. Other ways to help is to explore summer camps such as Girls Who Code, speak with teachers about possible scholarships for girls who study in the STEM fields, and find mentors that can support girls in math and science careers.

It has been over 50 years since pay discrimination became illegal in the United States and there is no magic bullet that will fix the gender wage gap. Long standing political and societal legacies continue to persist today. An important part of the solution lay at the feet of every mother and father. Perhaps model a little gender equality in your family by switching up traditionally male/female chores for both mom and dad as well as the kids. Ensure your kids understand how to earn, save, budget, invest and advocate for themselves and others. Financial education is the biggest investment you can make to pave the path for a bright financial future.

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