When we’re talking about money, there is a strong need to ensure that the way we talk to girls is the same way that we speak to boys. This is due to the fact that girls needs a leg up where money is concerned. That’s not to set them ahead of boys, I might add, it’s to put them on an equal footing.
The gender pay gap is well documented – and thankfully, slowly but surely it is starting to close. But women earning less than men is only part of the problem.
There are many factors that conspire to hinder some women’s earning, saving and investing potential. Having babies, raising children, running a household and caring for older family members further down the line can mean that women are likely to retire with a 40.3% smaller pension pot than the average man’s1.
Women are living longer and on average needing to spend longer in residential care than men1. Therefore, women may need more money in retirement than men, too. These challenges are the result of long-standing social attitudes and acceptance of cultural norms for women in Britain. Put bluntly, they are embedded in our society.
Speaking as a mum myself, I hope that it will become the norm for child caring responsibilities to be more evenly shared between parents and elder caring more evenly split between genders. But in the meantime, there is still plenty we can do to support our daughters, granddaughters, nieces or goddaughters.
Talking about money in the home
The first step comes down to having a good financial education. Of course, we can teach them 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.
With careful planning and the right savings and investment strategy, women can start to overcome the hurdles in their path. For example, taking time out to raise a family doesn’t necessarily mean your pension takes a hit if you plan for it. Equally, working part time doesn’t mean you have to sacrifice career progression.
We need to talking about money and life’s challenges to our daughters and granddaughters, not only to make them aware, but also give them the tools to tackle them.
Financial education in schools is notably lacking, so the onus is very much on families to do the teaching.
There are many ways we can help children around the house. Children can learn about budgeting by helping with the weekly shop or planning an outing. Giving them their own cash account will also help to teach them about the benefits of saving. Interest doesn’t provide much of an incentive, but parents can always pay their own top-up – perhaps 20p for every £1 saved.
It’s also about making sure that girls are being taught in the same way as boys. I recently read about a survey2 done in the US, which suggested that parents were far more likely to talk to girls about how to save money – while boys were taught about how to build their wealth.
Both are equally vital skills and should be taught to both boys and girls. Men need to be able to do a weekly shop without busting their budget as much as women need to invest for their futures.
Lead by example
To give parents and grandparents the support they need in this endeavour, there is a lot of advice and resources available to parents to help teach their children the financial skills they need for life.
Rob Gardner, our Director of Investment, 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, with a book available called Save Your Acorns. For older children, St. James’s Place runs its 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. You can try some of the fun ideas from this programme on our website at home.
Ronni Allsopp, Corporate Responsibility Specialist for Education at St. James’s Place said “Equipping our children with the knowledge and skills to manage their day-to-day finances is fundamental to their long-term financial well-being.”
“It is part of our goal to ensure that all people, especially children and young people, are confident and in control of their financial future and we are proud to be a working with the Centre for Financial Capability, schools and charities to make this a reality.”
I think we also need to be mindful that the biggest influence on children’s money habits will always be their parents. How we manage our own finances and equally importantly, realise how talking about money to our children can benefit them far more than any one-off educational activity.
1 Achieving Gender Equality in Pensions, Prospect 2020
2 Adolescent Income and Financial Literacy, Giftcards.com, September 2018, results from a sample of 1,000 parents
For more tips on talking about money, visit our Finance channel.
About the Author / Sharon Bonfield
