Have you had “the money talk” with your daughter?

Girls whose parents talk to them about money are more likely to become women who participate in their financial future.

22 Nov 2019

Key takeaways

  • When girls have financial conversations growing up, they’re more likely to participate in financial decisions with their spouse or partner when they’re older.
  • It’s important to be transparent, so don’t shy away from the conversation. Remember, financial know-how will empower your daughter in the future.
  • During the conversation, be sure to discuss your values, differentiate between wants and needs, and touch on investment priniciples.

Having the “money talk” with your daughters

When girls have financial conversations growing up, they’re more likely to participate in financial conversations with their spouse or partner when they’re older, according to Own your worth: How women can break the cycle of abdication and take control of their wealth (PDF, 1 MB), a UBS research report.

This participation matters, as our research has found that traditional gender roles run deep, with many women in couples deferring to their partner or spouse on major decisions about investments and long-term financial planning. Not only that, 69% of fathers and 52% of mothers said they wouldn’t be bothered if their daughter’s future spouse took the lead on financial matters.

“We embarked on this research to try to find out why this gender dynamic exists,” says Carey Shuffman, who oversees the Women’s Segment at UBS. One of the key things they found is that ideas about who should be in charge of what develop early, and are often based on the household dynamics children see modeled as they grow up. For example, women who grew up in families that spoke openly about money were about 33% less likely to abdicate major financial decisions than women who grew up in families where money was not discussed.

“It’s so important to instill healthy money habits from an early age in an equitable way among boys and girls,” Shuffman says. “If we want our daughters to be able to take a seat at the money table, we shouldn’t be shying away from talking about money with them.”

Here are a few tips for helping your daughters, and children more broadly, feel empowered to take charge of their finances in any situation.

Be transparent

“It’s very rare that families talk openly about money,” Shuffman says. “Trying to make it so that money is not such a taboo topic is a huge step in the right direction.” One of the best things parents can do is to have financial conversations with each other to the extent that they feel comfortable in front of their children—boys and girls—about things like paying bills, budgeting and spending habits. Even basic conversations with children about the price of the food on the table can be eye-opening. And though parents may have the instinct to hide their financial stresses or decisions from their children, modeling good financial decision-making can be empowering for kids.

Talk about values and give specific examples

Shuffman says one of the best ways to instill values around money is through telling personal stories around money goals. “Storytelling and sharing makes it much more real,” she says, and will help connect the dots for children. For example, tell the story of how you were all able to enjoy the family vacation at the beach last summer because you saved for it in the months leading up to it. Show on paper the amount you were saving each month and earmarking for that vacation and how—once that amount was reached—you could rent the house at the beach

Talk about wants vs. needs

Parents can also reinforce the concept of wants vs. needs at home in specific ways to highlight all of the little choices that can add up. For example, you need sneakers, but you may want the more expensive pair. If you spend money on that want, you may not have the money for another need. “You can show them that they might not be able to have all of their wants, but they can pick which one is most important and work toward it,” Shuffman says.

Involve them in investing

When asked why they take a back seat on money matters, the most common reason women give is that they don’t know where to start. In fact, 85% of married women who stay out of long-term financial decisions do so because they believe their spouses know more. Our research shows that women who report that their parents talked to them about investing are almost twice as likely to be involved in financial decision-making. However, you don’t have to be an investment expert, Shuffman says. You can do simple things, like looking at the markets with them and choosing a few companies they know and like to follow, like Disney or Nike. You can take a small sum and invest it on their behalf and follow that with them, or make it more hypothetical. Either way, the key is to explain how money can grow when you invest it and to demystify the process as much as possible.

“Time constraints are very real for all of us, so spending that extra five or 10 minutes a day to teach these money-smart habits to children can be challenging,” Shuffman says. “But it can go such a long way in how girls, and boys, grow up thinking about financial matters, as we’ve seen in our research.” Our UBS research shows that women already manage money day to day, and that is all the knowledge needed to start participating in major financial decisions. This new site is at ubs.com/mymoneymove, and it's a good place to start.

Connect with your UBS Financial Advisor

Have “the money talk” with your daughter