Eileen AJ Connelly

Early lessons are key to helping girls manage their personal finances as adults

By Eileen AJ Connelly
Associated Press / October 16, 2010

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Laura Wellington was left in the financial dark when her husband, Dean, died in 2002. At age 35, Wellington was a widow with four children; a boy, 9, and three girls aged 3 through 7. She also became the head of her husband’s two small businesses. Like many couples, before her husband’s death, she took care of day-to-day household expenses, and he handled bigger money issues like insurance and investing.

When he was gone, the Ridgewood, N.J., mom had to make sense of everything on her own.

It’s not just older women who leave the big money questions to their husbands. Women as young as their 20s frequently defer financial decision making to their spouses or even their fathers.

“I find that still, especially if they’re stay-at-home moms, they’re not in the know, or they don’t have equal say,’’ said Lyn Dippel, a financial planner in Columbia, Md.

Wellington has brought herself up to speed. But the experience taught her a lesson. “I will never let my daughters out in the world, or my children out in the world, without a knowledge of money,’’ said Wellington, now 44.

Exposure to financial issues is essential to help prepare young people to handle money. Studies show that parents have the single most important impact on financial behaviors and knowledge.

But women tend to get less information — and what they’re taught more often focuses on savings and budgeting than estate planning and the stock market, said Carrie Schwab Pomerantz, president of the Charles Schwab Foundation. Few families have frequent conversations about money, and when the topic comes up, they “speak to their daughters differently than their sons,’’ she said.

As a result, by the time daughters become women, they’re less likely to be familiar with the language of investing.

The best way to break down the intimidation factor is to start teaching kids about money as early as possible.

Financial literacy advocates say even toddlers can begin to learn about making choices at the store. By the time kids are in kindergarten, they should be introduced to the concept of money, and within a few years they should have been inside a bank and opened a savings account. Tweens can be taught to balance a checkbook, have some of their own money and be allowed to make choices about spending, saving, and charitable giving. Teenagers should have their own checking account and be introduced to investing issues.

“What’s easiest for parents to do in a busy world is look for those teaching moments,’’ said Kathleen Burns Kingsbury, owner of KBK Wealth Connections, an Easton, Mass., consulting company. She suggested having discussions about prices and choices during back-to-school shopping, and using opportunities like watching TV to question the money messages being shown.

Eileen AJ Connelly writes for the Associated Press.