Financial Literacy for Women: How to Raise a Fearless Woman

A teen girl, her laptop open, holds a credit card in her hand and looks at her smiling mother.

(Image credit: Getty Images)

From an early age, I’ve been interested in money and how it works. As a lifelong member of the Girl Scouts, I have fond memories of selling those iconic cookies. But not only did selling Thin Mints and Samoas help my troop achieve its objectives, but it also supported my financial literacy — I learned how to set my own financial goals and prepare a plan to achieve them. After all, that trip to HQ in Savannah, Ga., wasn’t going to pay for itself!

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Those childhood experiences gave me the self-reliance and assuredness that have carried me throughout my life as a wealth adviser and mother. Sadly, many other women cannot say the same. According to a recent study from the George Washington University School of Business, while women disproportionately say “I don’t know” to most financial questions, they are more financially literate than they realize. However, that lack of confidence scares them away from things like investing and saving, which are key financial strategies for building long-term wealth.

As a parent, you are your daughter’s number one role model, so you can start by being open and transparent with her as you engage in your own financial planning — from choosing investments to setting savings goals and preparing your budget — so she can see how it’s done. Here are three areas to focus on, including some fun activities she can engage in at any age to get her feet wet and set her on her way to confident financial decision-making.

1. Financial Literacy

Simply put, financial literacy is the ability to understand the value of money and how to make money work for you.

Learn through play. When you consider the fact that most people’s money habits are set between the ages of 7 and 9, it’s especially important for your daughter to learn to appreciate money from an early age. This can be achieved by the power of imagination.

Games such as Money Bags teach the numerical value of coins and bills, whereas playing restaurant or grocery store can teach her how to count money and give exact change.

Earn an allowance. As much as you love her, you shouldn’t give your middle schooler money just for existing. By giving her an allowance for contributing to the family by getting things done around the house (and doing them well), you’ll teach her the value of hard work, dedication and the reward that follows.

Additionally, she can also learn the art of salary negotiation — a skill that many women find difficult to master — if you give her quarterly performance reviews in order to justify an allowance raise.

Becoming her own boss. Get your daughter off of TikTok and onto a secondhand selling app like Poshmark! By becoming an online seller, not only will your teenager learn how to negotiate prices, but she will also learn how to manage inventory, all while upcycling old items for things that she wants.

2. Budgeting

There’s no point in making money if you don’t understand how to manage it.

Setting goals. As any parent knows, delayed gratification is not a strong suit for young children. Sit down with your little girl and explain to her the difference between “wants” and “needs.” Once she understands those concepts, help her set a goal toward something she wants in the future, like a toy or new jeans.

Encourage her to maintain focus and help her track her progress. After all, she could spend her piggy bank change on candy now, but then she wouldn’t be any closer to getting the more expensive item she has been saving up for.

Weighing income versus expenses. If your teenager has been receiving an allowance or has picked up her first real job, she now has a regular paycheck coming in. While your daughter may not have regular bills and expenses like rent or paying for utilities, she might use the family car to get to and from work and school. She also probably does things with friends throughout the week that cost money as well, like eating out, going shopping or participating in sports.

Help her write out a budget that weighs her income versus expenses. If she starts to spend more than she makes, it might be time to cut back on how many times she goes out every week. This will also help her start to appreciate money and the work it takes to pay for all the things she is fortunate to have.

Becoming fiscally responsible. As your baby prepares to leave the nest, what better way to teach fiscal management (and take a load off your shoulders) than by making her responsible for the family’s meals for a week? The next time you’re beginning a meal plan, give her a certain amount she can spend (e.g. $100) and have her find recipes, prepare a grocery list, buy the ingredients and prepare dinner for the family.

Not only will the budgetary limit sharpen her comparative=shopping skills, but possibly her culinary technique and improvisation, as well.

3. Investing

As the old saying goes, nothing ventured, nothing gained, and that is especially true when it comes to money. As your daughter gains more financial knowledge and assuredness, it’s important for her to put her knowledge to the test in the real world.

Jar it up. Every little girl is familiar with piggy banks, but the jar system takes that basic concept a step further. Use three jars and assign a different purpose to each of them: spend, save and give.

Every time your daughter receives pocket money, she must put a little in each. When the “give” jar is full, encourage her to invest it in a charity of her choice. This exercise should continue into her teenage years with each paycheck earned.

Make it competitive. With apps such as Stash101, your middle schooler can simulate investing without any monetary loss. Before the market opens for a particular week, she can “draft” her team — that is, choose various stocks, bonds and exchange-traded funds for different positions in a lineup.

The more her lineup increases in value or profit, the more points she gains, and vice versa. The person with the most points at the market’s closing on Friday wins the game that week.

Enter the market. At this stage, your teen can put her knowledge to the test. With companies like Fidelity, your daughter can actively participate in the market by investing money into stocks, ETFs and mutual funds with no commissions, no account fees and no required minimum investments.

Best of all, because it is a custodial account, you can both monitor activity and have an opening to discuss market gains and losses.

Teach your daughter how to invest in more passive, pooled investments like exchange-traded funds, as well as buying stock in individual companies that she feels connected to, whether that be the product manufactured or the company’s mission.

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My time with the Girl Scouts not only taught me financial literacy and independence, but also spurred my drive to help women feel financially empowered and confident. By teaching your daughter lifelong skills like financial literacy, budgeting and investing from an early age, you, too, can teach her to be financially fearless and ready to face whatever challenges the world might throw her way!

What parent doesn’t want that for their child?

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.