Talking Dollars with Our Daughters

Published by Deborah Repak, Managing Director - General Manager, First Rate Global
April 9th, 2015

My mom was a bookkeeper in the 70’s and instilled the fundamentals of saving in her children starting at a young age. She reminded us over and over about the importance putting aside a daughters_dollarsportion of each paycheck for savings before we started spending. We each had savings accounts and it was an event to go to the bank periodically to make deposits with the friendly bank teller and track it in our savings passbooks. I’ll call this Lesson #1 – Saving.

While this remains a life lesson that I carried with me into adulthood, I will never forget the conversation mom had with me explaining compound interest. She showed me how $100 invested at 10% could double in 7 years. (Okay, I did say the 70’s). If I added $10 a month to this $100 for that same time period I would have over $1400! I was astonished at this mathematical miracle and in retrospect, this was the start of my love for math and finance. I’ll call this Lesson #2 – Investing.

I attended the Women and Wealth conference in New York City in January and found myself amazed by the facts surrounding women and the amount of wealth they control and their investment behaviors. One session focused specifically on financial challenges for young women and as the mother of a nineteen year old daughter, I was particularly interested in hearing the facts.

  • Women who considered themselves the primary decision maker on their personal finances
  • While more women are enrolled in colleges now than men, the confidence most women have around their finances is trending the wrong way.
    • 25% of Baby Boomers
    • 6% of Gen X
    • 5% of Millennials

So, we have some work to do. The presentation had some great suggestions for bridging the gap with young women and building their confidence around managing their finances:

  1. Keep girls interested in math and science during formative years. Affirm that these are valued and attainable career paths. The financial services industry is great place for women to make a difference.
  2. Build confidence. Promote education around investing concepts and discontinue the use of industry jargon. Some women don’t know about beta, standard deviation, attribution or heaven forbid…kurtosys. (Isn’t that some kind of disease?) Don’t dumb it down, but find ways to communicate risk concepts that make sense visually using stories or examples.
  3. Break the taboos. Historically, discussing money with anyone other than your accountant or spouse was considered gauche. Based on my mother’s teachings, I have adopted an open dialogue with my daughter about money and financing. She understands my compensation plan, when I receive profit sharing and how much money I have in my 401K. She’s attending college now and knows I started investing money when she was 2 years old to make that a reality.
  4. Find the time. Most young women are busy building careers and juggling many responsibilities. Find ways to spend time with them that works with their schedules. Create events that combine networking, fun, and social connections and throw in some sage advice or education about a financial topic.

At the end of the session, the presenter gave us each a postcard to write to a young woman in our lives to start a financial conversation. Here’s what I wrote to my daughter:

Dear Young Lady,
I am so proud of you. As you continue through this phase of your life, I encourage you to find a passion and build a career around it. Don’t pursue a path just because it pays well. Love what you do…you will most likely be doing it for the majority of your life.You are in charge of your financial destiny. Save some money for life’s unexpected turns but invest the rest with a long term view. Pay attention to what is happening in the market and when appropriate, seek outside financial advice from someone you can trust. Be courageous and ask questions. I may not have all of the answers but I’ll help you find them. Talk to your girlfriends and challenge them to make a plan for their own financial security. Did I ever tell you the amazing story about how compounding interest works?
Your biggest fan,
Mom

Is there a young woman in your life that needs an encouraging word from you? Can you take the time to invest in a financial conversation? We want to raise future generations of young women who are wise and educated about investing and confident about their financial future. They are the largest emerging market in the US economy. Let’s be intentional and not dilly dally.

About the Author: Deborah Repak, Director in the Products group, has been part of First Rate since its inception. She initially worked as a part-time consultant and then became the second full-time employee in May of 1992. As a Director in the Products group, her responsibilities include assisting and leading the technical team in key development initiatives. Repak is a graduate of Louisiana State University and also has an MBA in Finance from North Texas University. Connect with Deborah via LinkedIn.

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