There’s no avoiding it – the girls in your family will face financial challenges boys won’t. Our daughters, granddaughters, nieces and goddaughters therefore need a leg up – not to set them ahead, but to put them on an equal footing.
Indeed, equipping the next generation with the knowledge and skills to manage their day-to-day finances is fundamental to their long-term financial well-being. Here’s what you can do!
Mind the gap(s)
We’re all aware of the gender pay gap, but it’s only part of the picture. Having babies, raising children, running a household and caring for older family members can further hinder women’s earning, saving and investing potential, meaning that women are likely to retire with a 40.3% smaller pension pot than the average man’s.1
Many of these challenges are the result of long-standing social attitudes that are embedded in our society. As time goes on, we’re seeing a gradual shift in mindsets, and we hope to see even more progress in terms of gender equality.
But in the meantime, there’s still plenty we can do to support our younger female members of the family!
Education holds the key
Of course, we must teach our daughters they can change the world if they want to, but even if they have more modest aspirations, we can still teach them how to thrive in the one we currently live in. It all comes down to financial education.
With the right savings and investment strategy, women can start to overcome the hurdles in their path. Taking time out to raise a family doesn’t have to mean your pension takes a hit if you plan for it. Working part-time doesn’t mean you have to sacrifice career progression.
The key is to not only make our daughters and granddaughters aware of the challenges, but also give them the tools to beat them.
Set an example
Financial education in schools can be inconsistent, so the onus is very much on families to do the teaching.
Children can learn about budgeting by helping with the weekly shop or planning an outing, and about the benefits of saving with their own cash account. Low interest doesn’t provide much of an incentive, but parents can always pay their own top-up – perhaps 20p for every £1 saved. What’s more, we need to make sure that we are teaching girls the same things as boys. Budgeting and building wealth are equally vital skills and should be taught to both boys and girls.
Finally – and perhaps most importantly – financially empower your daughters. Help them feel like they’re in control of their finances and give them the confidence to ask for that promotion or pay-rise at work!
A helping hand
Thankfully, there are a lot of resources available to parents to help teach their children the financial skills they need for life. Here are a couple of examples:
- Rob Gardner, Director of Investment at St. James’s Place, is an advocate of providing financial education to children and co-founded a company called RedSTART to improve the financial literacy of children and young people.
- As they get older St. James’s Place runs its own Financial Education Programme for Young People, which has been created alongside teachers and is delivered by our own financial education specialists in schools across the country. Some of the fun ideas from this programme are available on the James’s Place website for you to use at home.
To summarise, then, in a world where it’s the norm for women to be financially disadvantaged, they’ll need to learn to become strong advocates for themselves.
As a parent or grandparent, you’ll be your youngster’s biggest champion, so it’s important to remember that you are the biggest influence on their money habits. How we manage our own finances and how we talk to our children about money can benefit them far more than any one-off educational activity.
Not sure how to approach the subject? Talk to your Wellesley Wealth Advisory to find out how they can help.
1 Achieving Gender Equality in Pensions, Prospect 2020