This begs the question: how can we start our daughters off on the right financial foot, during the formative years that are so critical to personal development?
The answer? Learning through experience; that means—give them an allowance! Introducing a weekly allowance provides an opportunity for mothers to teach three important skills critical to financial success later in life: willpower, autonomy and negotiation.
Willpower: Delaying gratification can go a long way toward creating financially secure adults. Encourage your daughters to save part of their allowance for something special. Willpower is paramount to reaching savings goals and preparing for retirement.
Autonomy: Independent decision-making can help teenagers be less susceptible to peer pressure when growing up. Offer your daughters the chance to speak up and make their own decisions to help cultivate this skill early on. Try offering a “bonus” allowance incentive for participating in financial exercises that benefit the family. For example, ask your daughter to help plan your family’s summer vacation (keeping within limits, of course!).
Negotiation: Research has shown that even a slightly higher salary can significantly impact earning potential. By encouraging your daughters to negotiate purchases with their own money, you kick-start the development of persuasion, communication and problem-solving skills—all of which are critical to financial prosperity.
Wondering if you’re starting your daughters off right financially? Get in touch with your financial advisor to ask about their tips for inspiring financial confidence in the next generation.
By Nancy Anderson, Senior Financial Planner, Key Private Bank for the Healthy Moms Magazine
Nancy is a Certified Financial Planner™ professional with Key Private Bank. She has over 20 years of experience helping business owners, professionals and families make sound financial decisions.