At Financial Nutrition, our mission is to teach girls and young women about money so they can lead a life of independence and success on their own terms. Here are five key money ideas to share with the girls in your life:
1. Set goals — This is the first step at any age in any area of life! Figure out what your goals are around money. Goal-setting is powerful — not only does it provide a foundation for a larger plan, it provides easy reference for the delayed gratification involved with forgoing buying everything you want.
2. Be intentional — Money is complicated for most people, and very psychological. Money can make people feel happy, successful, sad, powerful, anxious, and an assortment of other feelings. As such, how money is spent and managed can be lost in a range of emotions. In order to manage money effectively at any age, you have to be intentional — know what you are spending, saving, borrowing, investing, and why. And keep track of it on an ongoing basis.
3. Weigh opportunity costs — An opportunity cost is the cost of alternatives not chosen. Money can only be spent on one thing at a time — money spent on a big trip can not also be used as the down payment for a house or an investment in a mutual fund. Put this in terms a younger person can understand, and ask her to compare her spending to her goals. It is just as important to know the value of what you are giving up when you make a choice!
4. Speak your value — Knowing your strengths and being able to communicate them to others is a powerful tool that women are often taught to downplay. But when you have trouble articulating your worth, it can have a direct impact on future paychecks. With women still under-earning men and having less representation in the executive suite and boardroom, we need to teach girls to know, speak, and earn their value.
5. Start early — The power of compound interest is something many people only feel from borrowing money. Compound interest is the reason credit card debt escalates so quickly. But it works on the income side as well — the earlier you start saving and investing, the more you will benefit from the power of compound interest. Investing early — and keeping your money invested — means you can ride out more economic cycles as well. Remember, the market does not always go up but the more time you have, the more likely you can ride out the storms.