How to Talk to Girls About Investing and Help Close the Gender Gap

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Women have a money problem. They earn less than men and also invest less.

The gender investment gap can be partly attributed to uncertainty, experts say.

“The way people can become confident is based on knowledge,” said Betsy Kelder, executive director of Invest in Girls, a program of the Council for Economic Education.

The numbers tell the story. According to a 2018 report by S&P Global, only 26% of American women invest in the stock market and invest less aggressively than men. However, a 2017 Fidelity study found that women who invested outperformed men by 40 basis points.

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These resources can help you teach your children about money

A 2019 Merrill Lynch Workplace Benefits Report by Bank of America found that women are retiring on $ 70,000 less than men. Almost one in five women didn’t save anything, according to a 2020 survey by CNBC / Survey Monkey Women at Work.

“We live an average of seven years longer, and if we divorce we’re more likely to fall into poverty,” said Jennifer Openshaw, CEO of the online entrepreneurship program Girls With Impact.

“It is important that we think about it early and get into the habit of saving.”

In fact, parents can start bridging the investment gap by having conversations with their children – the sooner the better.

Girls’ self-confidence drops by 30% between the ages of 8 and 14, as the authors of “The Confidence Code for Girls” found in their survey at Ypulse. When girls hit their lows by the age of 14, boys’ self-confidence is 27% higher.

It doesn’t have to be complicated

When talking to your daughter, context is important.

“Make it a relevant conversation,” said Openshaw.

If they’re older and like Apple products, for example, you can show them how much they would have made if they had invested in the company 10 years ago.

When you are young, start with concepts of money like budgeting and what it means to save. As they get older, investing can become a more organic, natural conversation.

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“When you’re not comfortable with money, investing seems insurmountable,” said Kristen Kimmell, director of consultant recruitment and field marketing at RBC Wealth Management.

Kimmell noted that when her eldest daughter was around 13 years old, she felt less confident about math. Kimmell and her husband created a matching program for their two daughters – when the children put money into their bank account, the parents brought it together. When the eldest daughter got her first job, she wasn’t intimidated by the concept of a 401 (k), Kimmell said.

Parents can also have their children split their money into envelopes labeled “Spend”, “Save”, and “Give”.

Sometimes a teachable moment can be as simple as getting kids into the things you do, whether it’s buying groceries, buying school supplies, or paying for a restaurant meal. You can also watch as you pay bills or prepare your taxes.

Learn together

“One of the obstacles we see is that parents don’t talk about it because they don’t understand,” said Invest in Girls’ Kelder. “So they are uncomfortable.”

Parents can learn about money and invest with their children. The Economic Education Council offers financial fun packages for families at home that include age-appropriate money lessons and worksheets.

Once children become interested in the concept of investing and compound interest, they can try a stock market game available through the SIFMA Foundation, which helps children teach financial markets through partnerships with schools.

“Take advantage of what’s out there,” said RBC’s Kimmell, who is on the SIFMA board. “There’s a lot of information out there.”

Include them in decisions

As your children get older, you can involve them in larger family financial decisions, such as: B. To determine the annual household budget, if you have one.

When they’re in their sophomore year and start thinking about college, talk about what higher education costs, Kelder advised. You can discuss an appropriate budget, how much you can afford and how much debt your child wants to take on.

“Include children in the conversations we have as adults,” she said. “We don’t give enough credit to children.

“They learn a lot that way.”

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