Empower a Girl in Your Life by Teaching Her About Money
“The task of a teacher is not simply to impart information or to provide training in skills intended to deliver some economic benefit to society; education is not and must never be considered as purely utilitarian. It is about forming the human person, equipping him or her to live life to the full—in short it is about imparting wisdom. And true wisdom is inseparable from knowledge of the Creator, for ‘both we and our words are in his hand, as are all understanding and skill in crafts (Wis 7:16)’” (Pope Benedict XVI).
One of my favorite parts of my job is educating others, particularly women, about money. Many schools’ curriculums do not seem to provide sufficient financial education. At most of my meetings with clients, the topic of education comes up. Whether it is a 26-year-old who is so grateful for the financial education his parents passed along or parents of a 10- and 12-year-old who do not know how to teach their kids about money, the general sentiment is the same: “I want the next generation to know more than the current generation about how to handle their money and make prudent decisions.”
As Catholics, we understand parents to be the primary educators of their children. Parents use school, religion classes, extracurriculars, and other trusted adults to help them, but the parents must be at the heart of all education. Still, as a businesswoman, you are in a unique position to teach money skills to any children in your life, particularly girls and young women (with the permission of their parents).
As women, it is natural to bond with and mentor other women or girls. As business leaders, we have a respected role that gives us the opportunity to encourage and instruct on topics that may not be brought up at home or may be accepted better from someone other than mom and dad. In my experience, there are two common reasons parents don’t teach their kids about money at home: They don’t feel equipped to do so, or they believe their kids will just catch on or learn through osmosis. As much as I wish this were true, I have spoken to too many millennials, whose parents are well equipped financially, who have no idea what to do for themselves.
Not only do parents need to take more responsibility, but other adults—like you—need to step in to help where they can and when it is appropriate.
Where to Start
The financial world is complicated. For kids (and even adults) to understand it, they need to start with the basics. As a business leader, you have some experience managing money, whether it is your or your business’ (or both). Start with a simple conversation to understand what the girl you’re teaching may or may not know already. Does she have a piggy bank or bank account? Does she use Venmo with her friends? Does she receive an allowance? Are there money rules in her home?
Take her to coffee or on a walk, and talk about her experience. Then, use your experience to answer any questions she has or fill in any gaps. (Be sure to talk to her parents first so you understand their boundaries, if they have any, regarding what you should or should not bring up.)
Make Things Tangible
After you have a feel for where your mentee is, make things tangible for her. Children struggle to understand things they cannot see or touch. Show her a spreadsheet or graph. Write a simplified “kid” budget on a piece of paper. Buy her a piggy bank with a small amount of money as a gift. If you are trying to help her learn about budgeting, it is helpful to give her money as one-dollar bills rather than a 10- or 20-dollar bill so she can see how it adds up.
Have a conversation with her about what she might want to spend the money on or save it for. Personally, I love this piggy bank from Martha and Mary. Not only is it transparent, so she can see how much is inside, but it helps her start thinking about the big budgeting categories.
Managing Money/Budgeting
Next, you can talk a bit about how your mentee manages the money she receives. As a Catholic businesswoman, you probably have some form of retirement plan (savings), monthly spending amount for your lifestyle needs, and charity budget. You don’t have to share how much you put into each category, but helping her understand the categories will help her start to think about categorizing her own money.
I’ve found that using percentages and a circle helps make this activity more visual (I can email you a template if you need one). Basically, draw a circle, and have her color in slices of the “pie” for each category. Then, use an easy number like $10 to explain the slices: “If half the pie is your spend budget, you have $5 to spend. If a quarter is for saving, you should keep $2.50 for the future. If one-tenth is for tithing, you have $1 to give away.”
Goal-setting
Conversations about budgeting are great places to set goals. Ask your mentee if she has something she really wants but that is too expensive to buy with her allowance or the money she already has saved. Help her do the simple math to figure out how many more times she needs to babysit or how many more weeks of allowance she needs to reach her goal.
If your relationship allows, be her accountability partner to help her reach her goal. Maybe even give her a small reward for getting there. Having someone who encourages saving and cheers her on will help her learn to delay gratification and about the importance of planning for major purchases in the future.
Understanding Debt
One final area you may be able to help your mentee with is understanding debt. Again, it might depend on your relationship with her and her family, but you could act as the bank to fund something that she may need before she will be able to pay for it herself. You have probably encountered loans within your business and have a good understanding of how they work. Using these principles, set up a pretend loan for her.
Let’s say she wants a new dress for Easter, which is two weeks away. The dress costs $50, and she only has $20. Her weekly allowance is $5, and she occasionally babysits for $40, but she does not have any babysitting jobs on the calendar right now. You could agree to loan her the $50 or $30 to pay for the dress, but you would change her interest until she pays you back.
Set up a simple spreadsheet amortization schedule. You can find an online calculator here. Explain to her how much she will owe you per week and how much more she will end up paying for the dress because she is buying it on credit rather than with cash. This is an important lesson to learn in our world of credit cards and loans. The sooner she understands it, the less likely she will be to get into too much debt.
Make It Fun!
As a final point, try to make learning about money fun! Both of you will learn and grow more if you enjoy the time and process. Create little challenges with rewards that you work your way toward. Be excited and encouraging. Sure, money can be stressful, overwhelming, and frustrating—but it does not have to be. With the right perspective, a bit of humility, and a game plan, it can be fun and exciting. When we set goals and make progress toward them, when we teach and help others learn, and when we are growing with someone else, we tend to have a feeling of fulfillment and purpose.
Follow the Prompting of the Holy Spirit
As in everything, allow God to guide you. No two children are the same, and the way they learn and grow varies. You may play a small role in your mentee’s financial education—or a huge role. God will work how he works. Allow him to use you as he sees fit. You may be amazed at the blessings, or you may never see them. Either way, God is in control; our job is to surrender to him and his will.
Financial education is a lifelong journey; there is lots to know. God will place the people or resources in your life—and in your mentee’s—to teach you in each moment. He will equip you for whatever he calls you to.
Erica Mathews currently works for Financial Counseling Associates. She completed her course work for the CERTIFIED FINANCIAL PLANNER™ certification at the College for Financial Planning and is a few months of experience away from completing her certification. She is passionate about helping families build their wealth so they can live out the calls God has places on their hearts. She lives in Colorado with her husband and four kids. They love everything outdoors including gardening, hiking, biking and simply exploring nature. If you would like to reach out to Erica, her email is erica@fca-inc.com.