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Seven Ways to Teach Girls About Money and Financial Literacy

Seven Ways to Teach Girls About Money and Financial Literacy
Girls doing crafts on a lawn
Did you know 56% of adult Americans¹ can’t pay an unexpected $1,000 bill with savings? Also, 22%² of the US adult population has no emergency savings.

While these figures are shocking, they’re perhaps not surprising. Finance for kids is not a core subject in US schools; only around 30%³ of public school students get financial literacy classes.

But what about younger kids? A Cambridge study⁴ reveals that children will have formed thought processes impacting their financial capabilities as adults at age seven, so why not start now?

In this article, we unpack the best ways to teach financial literacy to kids and (early) teens, equipping your daughter with skills to manage money now and as an adult.

Why Is It Important to Teach Kids Money Management?

When we teach kids money management, they tend to make wiser financial decisions later in life. Data supports this claim. Of individuals with lower financial literacy, only 35%⁵ spent less than their income, compared to 53%⁵ of adults with a higher financial literacy.

Financial literacy for kids means they can understand and apply basic economic concepts.

Experts⁶ say these are the key concepts:

• Value of money
• Needs vs. wants
• The power of saving
• How to budget
• Tracking money
• Digital literacy
• Loans and debts

Here’s how to teach them in simple, empathic, and fun ways.

1. Play Money Games

When your daughter is only three or four, playing shop will teach her the value of money. Dorothy Singer, Ed.D⁷., a retired senior research scientist at Yale University, agrees⁸. ‘By exchanging play money for goods, your child begins to understand the basics of commerce.’ Use fake money and food items like cereal, fruit, vegetables, and household cleaning products.

If your daughter is five or six, plan an imaginary party with a budget and coupons for drinks, food, and other party essentials. Encourage her to design a party plan to suit her budget.

Seven or eight-year-olds will learn about wants vs. needs by playing the desert island game. Write down a list of 12 items, such as water, food, toys, and ropes, and tell your daughter to pick six things she’d need if stranded on a desert island.

Do the marshmallow test to teach her about delayed gratification. (Give her a choice between two options: getting a marshmallow now or waiting fifteen minutes and receiving two).

If your daughter is older, allow her to oversee your yard sale. Let her price and sell items. Or teach her to be money savvy by playing board games like Monopoly, Catan, and The Game of Life.

2. Discuss Money

Studies reveal that an ongoing money conversation⁹ between parents and kids leads to more positive financial outcomes once the children reach early adulthood. And by fostering an atmosphere of openness, your daughter will know she can come to you with any questions she may have.

Explain the key financial concepts for kids in age-appropriate terms in an open conversation. Say, every time money changes hands, when shopping, donating to charity, or banking online.

When your daughter is younger than nine, explain:
• How you work for a salary.
• Coins and notes have different values.
• Why saving is essential.
• The difference between cash and digital money.
• How can you differentiate between wants and needs?
• Why do we donate to charities?

When your daughter is older, talk about:
• Budgeting
• Comparing prices.
• Bills, receipts, and bank statements.
• Borrowing, mortgages, and the risks involved.
• How advertising works to help people part with money.
• The cost of cell phones (Even if you’re waiting, it’s an excellent exercise to lay out the price of one.)

Besides an ongoing conversation, modeling⁹ sound money management skills will help give your daughter the insights she needs to become money-savvy.

3. Make Saving Fun

Encourage your daughter to save by giving her a (small) weekly allowance and three jars labeled with different saving goals, or use a digital version with a bank and a savings account.

Consider only giving her gifts on birthdays and holidays and letting her save for things she wants.

If pocket money is not an option, perhaps she could earn cash by doing chores.

4. Practice Budgeting

Help your daughter keep track of her money in a journal to see how she can increase savings to reach her goals. If your daughter goes over budget, be empathetic. The whole object is to learn by making mistakes, and it’s easier to correct a $10 error now than a $1000 mistake later.

Model daily budgeting by taking a packed lunch to work, visiting thrift stores, or making new dishes from leftovers.

5. Go Shopping Together

Turn shopping trips into teaching moments, and let your child help by clipping coupons beforehand, checking what needs buying, and writing a list. Set a budget, encourage her to find lower-priced versions of your usual buys, and pay the cashier.

6. Help Her Gain Digital Savvy

Teaching digital financial literacy is essential. Open a bank account and show your daughter how to save online. Discuss how to keep bank details safe and warn her about online scams.

Explain the insidious ways kidfluencers promote products, and lastly, describe how gaming platforms like Roblox get kids to spend money.

7. Teach Financial Literacy for Teens

As she grows into a teenager, build on your ongoing money conversations by focusing on these topics in depth:

• Peer pressure: Avoid dismissing her requests, but listen and be sympathetic. If a brand purchase exceeds your budget, explain why and aim for a compromise.
• Targeted Marketing: Tell her how it works and help her focus on making sensible purchases.
• Investing: Explain the basics and introduce her to games like Build Your Stax¹⁰ and the Stock Market Game¹¹.

Money management for kids is a vital skill your daughter will need to manage money now and later. Our financial literacy for kids guide will help you shape a secure future for her.



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