Take The Gender Out Of Money Smarts
Boys make money, girls spend it? Make sure your kids aren't getting the wrong message.
By Andrea Rock

(MONEY Magazine) – Adora Mora knows a thing or two about money. At age 16, the high school junior is already an experienced entrepreneur, running her own graphic-design company after school (see page 74). She also has a long-term financial plan: Since money is tight in her large family, she wants to help by paying a substantial share of her future college tuition, and she has calculated just how much she needs to earn and save each year to reach her goal. Says Adora, who lives in Columbus, Ohio with her parents and seven siblings: "I have it all mapped out."

Unfortunately, financially smart and confident teens like Adora seem to be the exception, not the rule--particularly among girls. While girls in general don't know any less about money than boys, they feel a lot worse about their financial skills. In one study of high school students, for example, boys were nearly twice as likely as girls to say they were knowledgeable about financial issues, and they expressed a lot more confidence about their ability to manage money too.

Yet national surveys measuring the financial know-how of high school seniors show that both boys and girls earn equally dismal grades. On a comprehensive test sponsored by the JumpStart Coalition for Personal Financial Literacy, the average score in 2004 was only 52%, with little difference in overall grades by gender. But boys and girls did differ in their knowledge of certain aspects of money management. Boys consistently scored higher on investment subjects, while girls knew more about topics like who needs life insurance and how to achieve job security.

How can you make sure both your sons and your daughters grow up financially savvy? These simple steps should help.


As you've probably seen in your own family, boys and girls begin to show distinctly different approaches to money at a very young age. Studies show that girls as young as six, for instance, are more likely than boys to cite "going to the mall" as one of their favorite activities. Boys, on the other hand, express more interest than girls in investing and entrepreneurship. A surprising number of adolescents also express what seem like some pretty old-fashioned ideas about what life will be like when they're older. Despite the fact that 60% of women are in the labor force, a majority of middle school boys report that they expect to have a stay-at-home wife, while nearly a third of girls in another survey said their "financial plan" for when they grow up is to marry a wealthy man.

Where do they get these crazy ideas? From us, their moms and dads, of course, with a heavy assist from popular culture. Even in two-income households, parents still sometimes send mixed messages about careers without meaning to. "We convey to girls, yes, you'll have a job if you want, but you won't really have to rely on your earnings to support yourself," says Nancy Gruver, founder and publisher of New Moon: The Magazine for Girls and Their Dreams. And when the conversation moves beyond work, we still talk to girls more about shopping and to boys more about making money, particularly as they get older.

Meanwhile, toymakers heavily advertise games like Mall Madness for girls (winner: the first girl to make six purchases) and target them for financial products such as the Hello Kitty MasterCard, a pink debit card marketed as "the cutest way to shop." And teen-girl magazines are heavy on advice about buying the right clothes and makeup but skimpy on motivational stories about young women who have accomplished great things (other than nabbing a bargain).

Of course, boys need to learn consumer skills just as much as girls do, and both need training in saving and investing for the future. You can start teaching both sexes the basics at a young age by seizing everyday opportunities to explain what they need to know. Take your son as well as your daughter to the supermarket and the mall, then verbalize your thoughts as you compare prices and quality. Let them come with you to the bank, and explain how money can earn more money simply by staying there untouched. Buy each a few shares of a company whose products they can relate to--Disney, McDonald's or Nike, for instance--and talk to them about what it means to own a stock. Even very young children can grasp the idea that the more people who visit Mickey and Minnie, the more money an investor can make. They'll really pick up on the idea if they have a stake in the outcome.


To learn how to manage money, kids have to have cash of their own to spend and save. Studies show parents are just as likely to give allowances to daughters as sons, but we sometimes give boys more money to work with. We're also more likely to simply give girls cash whenever they ask for it, instead of a set amount each week. What this unconsciously communicates: Girls aren't capable of handling larger amounts or need to count on someone else to take care of them financially.

In addition to giving your kids equal allowances, you should also give them equal encouragement to let their money grow. David Owen, author of The First National Bank of Dad: The Best Way to Teach Kids About Money, advocates setting up savings accounts early and sweetening the interest rate your-self--he suggests 5% monthly--so kids quickly learn the magic of compound interest. Another tactic to encourage saving: Create the equivalent of a parent-sponsored 401(k), in which you offer to match a portion of every dollar your son or daughter manages to save.

Also encourage trading games that introduce kids to the world of wheeling and dealing, suggests Joline Godfrey, author of Raising Financially Fit Kids. Boys grow up trading everything from Yu-Gi-Oh to baseball cards. But while girls collect and costume their Barbies, they rarely barter and so don't get the same early practice in negotiating prices and assessing market value. Ebay can be a useful tool to get these lessons across because it's a natural marketplace for the items both boys and girls tend to collect, suggests Owen. When Beanie Babies were the rage in his son's fourth-grade class, he notes, the boy sold two of his "rarest" ones for nearly $125.


"When girls get their first job babysitting, adults often respond by saying something like, 'That's cute, honey,' or 'You're so good with kids,'" says Whitney Ransome, co-executive director of the National Coalition of Girls' Schools. "But when boys start mowing lawns, they are congratulated on being enterprising." Without meaning to, our comments tend to trivialize the jobs that our daughters do and motivate our sons to work harder.

The right response: Consciously encourage both your son and your daughter to take jobs seriously. Then go a step further and help them determine what they're really worth in the job market. When prospective employers ask what they charge, boys sometimes get carried away by starting with a number that's too high, says Ransome, while girls tend to err on the low side or simply mumble, "Whatever you want to pay me." Teach them instead how to find out what prevailing rates are for the job at hand. Then role-play a wage negotiation, suggesting the kind of language they might use with adults to suggest a fair price or, if warranted, to press for more.


Kids pick up most of what they know about money by observing their parents--particularly their mothers, studies show. If your son and daughter see that Mom does all the shopping and, maybe, pays the bills, while Dad does all the investing and long-term planning, then that will strongly influence what they'll believe their financial roles as adults should be.

So don't let them catch you playing to type. Instead make sure your kids see that both of their parents take an active role in the family's finances and in important investment decisions, even if one takes the lead in bill paying or actually implementing investment moves. Let them hear Mom talking about their college fund and her retirement account and see Dad clipping a few coupons too.

Most important, though, is to simply keep the conversation going and help children of both sexes see that their financial roles aren't carved in stone. Says Godfrey: "We need to equip our sons and daughters to see that financial responsibilities should be shared, roles are blurred and the options out there are so much more diverse than they may believe."