American girls are at a financial disadvantage compared to boys.
Sound strange, doesn’t it? But think about it. Think of everything we know about men, women, and money in this country.
Let’s start backwards chronologically: Women are twice as likely to end up in poverty in retirement, compared to men. While still working, women earn 78 cents on the dollar compared to men, with some groups like older women earning even less. Millennial women early in their careers are earning nearly 40% less than their male counterparts. Young women just graduating college under-negotiate young men, which by some accounts, can cost them half a million dollars over a lifetime. So why would it be a surprise that girls are also at a financial disadvantage?
Other statistics show that women may lose over a million dollars in lifetime earnings due to the gender wage discrepancy. Another, equally troubling trend, is that the gender wage discrimination is happening within industries. So it is doctor vs. doctor, and salesperson vs. salesperson, not that men are choosing higher-paying professions than women.
Financial issues are challenging for so many reasons. Sometimes the math is hard. Sometimes money causes fear and anxiety. Sometimes people just don’t understand more complex financial concepts like investing.
One of the reasons financial issues are challenging is because money is social, meaning, what society thinks and says has an impact on how we deal with money. What we’re finding out is that societal messages about money are different for girls and boys, including how their families talk to them about money.
A great example of this are the results of a recent study by investment company T. Rowe Price. In their annual survey of 8- to 14-year-olds, 38% of girls reported feeling extremely confident about money, compared to 45% of boys. This sentiment reflected the parents, with 69% of those who had a girl reporting they believed she understood the value of a dollar, compared to 80% of those with a boy. Children also reported that parents talked to 50% of the girls about setting financial goals, while they talked to 58% of the boys.
But think about it. Is it really a surprise, given what we know about men and women of all ages, that the inequities start with kids, at least in terms of the messages they get? That is the primary reason it makes sense to teach kids about money — to head off the wrong ideas and destructive behavior, and instill healthy understanding and patterns with money for adulthood.
I offer advice in this space for how to teach girls about money, and also a series of free online exercises. We offer courses in schools, and privately, for girls and young women. We are working on a curriculum that can be licensed and used by schools, and with some luck, I will be publishing a book on teaching girls about money at some point in the near future (and I will keep you posted about that!).
Girls need to be taught how to value themselves, articulate that value, choose the right major and career, and eventually, how to negotiate competitive salaries. Girls need to understand the financial context they live in, and that it’s not okay for them to earn less simply for being female, and that earning less may impact their lives, their opportunities, and their families in many adverse ways.
We can no longer make assumptions that American men are the primary breadwinners of their families, given the recent study that shows that 40% of households with children under 18 have a woman as primary breadwinner. Women in the US now make up almost 50% of the workforce. While women’s independent access to credit only came along in the 1970s — which feels like recent history to some of us — the fact is that today, women are active and independent financial participants in US society.
When I teach teenaged girls about money in a classroom setting, the first lesson is always on the context of women and money. The point is not to teach them their role, or tell them how to live their lives. The goal is for them to understand that they are coming up in a world that is biased against them financially, and that they personally need to take control of their financial futures. This is a message girls and young women need to hear in all areas of their lives, if they are to grow up to become women who can take care of themselves and their families financially.