With a divorce rate of around 50% and many people not marrying until they are in their thirties, it is surprising to find that there are still many women who arent financially educated. Most of this can be traced back to two factors: upbringing at home and society. In both cases, boys have often been given much more training and many more resources than girls have and the effects are damaging women financially today as they face a world in which they have to take care of monetary issues on their own but have never developed the skills to do so.
The Safe, Secure 1950s
In the 1950s most women quickly married and settled down to raise families. Very few of them worked outside the home, and finances were handled by the men. It was a financially prosperous time and women were expected to focus on the home and child-rearing. This focus on home-making was passed on to daughters while sons were groomed to the breadwinners of the family.
The obvious separation between girls and boys activities also managed to keep girls sheltered from financial concerns. They werent expected to pay for anything on a date and parents didnt often expect them to hold down jobs. Boys, on the other hand, were expected to get a job at a young age, even if it was merely a paper route. The expectation was that a young man needed to take on some responsibility and contribute.
As the generation raised in the 1950s grew up and raised families of their own, they passed on the financial biases that had been instilled in them to their own children. Many of todays parents have made the same mistakes their own mothers and fathers did, ignoring the obvious need for women to understand and learn to handle their own finances in favor of hoping that their daughters wouldnt have to face the harsh financial facts of life.
The belief that men would take care of womens financial needs was so ingrained that many of the big picture financial lessons were overlooked. Women tended to learn how to shop for bargains at the grocery store, stretch the budget at the holidays and that was about it. More complex lessons such as long-term investments, retirement planning and stock portfolio development were not a part of the picture.
Boys learned how to manage their money, save for a rainy day, and make smart investments and a host of other financial strategies.
Play and School Contribute to Gender Gap
Interestingly, boys more than girls tend to develop habits that are more geared toward understanding numbers and how they relate to finances from a very young age. While girls tend to be collectors, says Joline Godfrey, founder of Independent Means, boys develop informal economies based on relative value from the age of six on while trading cards and other items. By the time boys start trading stocks and bonds, its just another form of the game. Independent Means is a company which promotes economic independence and growth for girls and women aged 14 to 24.
Even in school settings, boys are rewarded more consistently for being risk-takers, and investing is often perceived as a risky venture. Girls arent encouraged to take risks and arent rewarded for these types of behaviors and instead are likely to be cautioned to be careful. When faced with the prospect of learning about investing in the stock market or learning about retirement options, these same girls now women are more fearful of making decisions and less sure of themselves in making choices for themselves.
Statistics Show Gender Bias
A recent survey showed some startling discrepancies even today between teenage boys and girls and how much education they have received in the very basics of finance. Some of the findings include:
Many more teenage boys than girls report understanding of how to write a check and how a credit card works, including accrued interest.
Teenage girls are much more likely to be in debt than boys, with almost 50% reporting credit card debt as opposed to less than a quarter of teen boys having any debt.
Girls are more likely to report that learning about investing is boring, while boys report a real interest in learning about it. When asked to elaborate, girls often pointed out that this wasnt something they would be doing in the future, while boys indicated that it was important to learn so that they could be successful.
The perception that girls shouldnt have to worry about their financial future in the long term (based upon the faulty premise that a man will take care of her or that she can hire a financial consultant to handle all of the boring stuff) is still present in many homes. Fortunately, the balance is beginning to shift as more parents realize that women who are successful in their careers must also be able to guide their own financial futures, not rely on others to do it for them.
Programs Aim at Closing the Gap
Todays girls are more likely to learn how to handle money at a young age. Cautionary tales in the news and on talk shows about women left destitute and the fear that social security can no longer support an individual in their golden years has, perhaps, contributed to this. After all, with most women outliving their spouses and more than half of women divorced, its likely that todays girls will be supporting themselves in their retirement years understanding Roth IRAs suddenly becomes very important.
Companies and organizations are also stepping to the forefront with programs designed to educate teens in general and girls in particular. Boys and Girls Clubs of America, in collaboration with Charles Schwab, offer Money Matters: Make It Count programs in cities across the country.
Visa works with Girl Scouts of the USA to provide two resources, the Cashin In workbook and the Makin Cents web game, to teach girls aged 13-17 financial responsibility. The web game specifically challenges players to find real-world solutions for characters financial challenges.
With such programs increasingly popular and the need for women to understand finances now a hot topic, its to be hoped that this generation of fathers will teach their daughters as much about finance as they teach their sons.
Author of: Think Your Way to Riches Kids Style
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