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I was fortunate enough be invited as guest speaker on Kate Holmes’ Innovating Advice podcast. I got to talk about my advocacy for financial confidence and the risks women face in wealth and finance.
My advocacy on gender and pay equality came to be when I realised that women face a lot of long term financial risks due to their specific life circumstance. On one of my previous blog posts, I discussed the inherent risks of being a woman.
A simulation of women’s wealth accumulation over a lifetime showed shocking numbers. A pay gap of only 10% ( all else equal) could lead to a wealth gap of approximately 40% between a man and a woman!
To give you an idea of pay gaps in the EU, here are the numbers:
The country with the lowest pay gap as of 2019 is Romania at 3.5%.
The country with the highest pay gap as of 2019 is Estonia at 25.6%.
The EU average as of 2019 is at 16.0%.
If you'd like to read more about this. You can access the fact sheet from the European Commission here.
Further research shows that 8 out of 10 women believe their financial capabilities and knowledge are lower than their partners'. 6 in 10 women shy away from long term financial responsibility due to lack of financial confidence. In short, Women underestimate themselves and their capabilities.
My reaction to his research is simple: unless your partner would have a degree in finance, there is little reason to believe that they are inherently more savvy in long term financial matters. This is a perception gap that we really have to close.
Women are perfectly capable of managing short term financial matters, monthly budgets and household expenses. Trust me when I say this part of finance is far more time and energy consuming than long term financial planning. So if you’re already doing the hard part, why would you not be good enough to do the easy part, too?
To this I would also add a (potentially controversial) comment: if long term financial planning had been a boring chore, I am sure that historically, men would have found reasons to delegate it to the women in the first place. So rest assured that it is the more fun and engaging part of managing money!
If we want to reduce gender inequality, we have to empower fellow women to step up. We have to encourage them to learn and take responsibility when it comes to long term finances. We have to encourage and educate women about how we should perceive our worth, value our time, and plan for our financial futures. Women need to develop confidence so that they can fully take control of their finances.
The first step I recommend:
IGNORE THE INTIMIDATING FINANCIAL JARGON and the fact that you feel it is too complex to understand. Finance is complex, but the good news is: you don’t need to be an expert to put a robust, long term financial plan in place.
To make an analogy with the medical world: you don’t expect to be knowlegeable yourself in anatomy and medicine before seeking out a cardiologist if you have a heart problem. So why would you expect to have to be knowledgeable in finance before seeing out a trustworthy financial advisory?
All YOU need to focus on is: clarifying your short term, mid term and long term goals. Translating that into a robust financial plan is not so hard once you have found the right advisor. The latter is probably the bigger challenge, especially for many women. How can I find an advisor I can trust, who is not just pushing products at me or charging me for “financial wellness” coaching that I don’t really need to pay for at all? If you’d like to discuss that topic in depth, direct mail me and I’ll be happy to address it in a future newsletter.
Too many banks, financial advisors and event online platforms still tend to treat women simply as a segment to market to. We women are about 50% of the population and we cannot accept to be an afterthought in their sales processes, designed to meet the needs and expectations of men. We have the right to expect a value proposition that is tailored to our needs: to the language we feel comfortable with, to the level of information we seek, to the life circumstances we face, and to the time management challenges we face juggling families and carreers.
From the start, businesses and sales processes need to be developed with women in mind. Whenever they create something -- product, service, platform, etc. - financial services providers need to become more inclusive and ask "Will this appeal to women as much as it will appeal to men?"
On our side, we women need to learn to be more confident in speaking out our needs and wants. We need to put our foot down and know our worth - and if we don’t feel comfortable talking about finances with an advisor who throws jargon at us, WE ARE NOT THE PROBLEM: it is the advisor who needs to adapt to our needs, and not vice versa. Women are the clients. Women don’t need fixing. The system needs fixing, to fully embrace women’s needs and meet their expectations.
As the saying goes: prevention is better than cure.
With that in mind, I encourage that you start teaching your kids about pay equality and financial confidence. It does not matter if they're a boy or a girl! What's important is that you open up these topics and teach them while they are young.
If they grow up aware and practising equality, then they can also become a positive force of change amongst their friendship circles and later on as professionals. After all, it only takes one to start a movement. If you also couple it with a lot of positive reinforcement and examples, then they're sure to grow up fighting for equality!
Once again, fellow parents, this is why I wrote A Smart Way To Start. I realised that only fighting for gender equality in the professional world is not going to be enough. We need to eliminate biases our children unintentionally grow up with. So I tried to break down all those concepts in a way that's easy to understand and to remember -- through rhymes and illustrations.
I do hope you found this helpful as you journey on through parenthood. If you'd like to learn more and read more tips, please subscribe to my Monthly Money Tips newsletter!
Albert, the sausage dog,
lives just next door.
He’s old and he sleeps
on a rug on the floor.
His legs are quite short
so he can’t jump up high
and his favourite teddy
is always nearby.
When he sees Marty, he stands up and barks:
he knows she will take him for walks in the park.
Because he’s so short, he gets dirty quite fast,
especially when he runs on the wet grass.
When the ground’s muddy, his fur is a mess!
But taking a bath is the part he likes best.
Marty likes rubbing him with his shampoo,
But when Albert shakes himself, she gets soaked too!
An old shaggy teddy bear and a chewed tennis ball.
Misnaming things adds to the world's woes.
Albert is named after Albert Camus (1913-1960), a French philosopher, author, and journalist. He won the Nobel Prize in Literature at the age of 44, the second youngest recipient in history.
In our busy daily lives, one thing that we don't always spend enough time on is teaching our kids about responsible and conscious living. However, I believe that an important (and often overlooked) aspect of any financial parenting is sustainability.
What kind of world do we want to live in? That’s a big question.
Do we want cleaner water and clean air? Do we want children to go to school? Do we want cities with infrastructure that supports the inclusion of all people? These are things we often take for granted living in Switzerland or in Europe. But we should be mindful that this is not a reality for everyone on this planet. And it’s a great question to engage the kids with, in almost any daily circumstance, because it enables them to develop a sustainability mindset.
As I mentioned in a previous article, sustainability is also about longevity. It's about teaching kids how to allocate their resources. It's about showing kids how to protect our planet. It's about raising kids that are conscious and aware of how they can positively (and negatively) affect nature and society.
We can't delay teaching kids these principles when they're older. We have to integrate these kinds of lessons and learning when they are still young, because their money habits are largely set by age 7.
We would love them to all be sustainably aware as they are growing up!
As always, good practices start at home, where your kids can observe them and experience them everyday. Make sure that you are conscious of the little things. It can be something as simple as recycling.
It can be something as simple as teaching your kids how to sort the trash or lessening single-use plastics. After all, sustainable eco-practices start with things that we do and encounter everyday!
This is like the money tip I've given previously, where I ask you to make your money decisions visible to the kids. You have to give children the chance to see your sustainable decisions in action. You are their role model and this kind of visibility opens up great conversations.
When you bring along your kids during errand runs, try to explain to the the logic behind certain decisions you've made. For example, try to explain to them that you chose a certain dishwashing liquid brand over another because of its non-harmful components. Or explain that you choose to buy vegetables in the farmer's market because it lessens air pollution if trucks don’t have to transport the foods too far. It's about making sure that your kids know that you are making certain buying decisions. And making sure your kids can grow to understand the reason why you make these important decisions.
Sustainability is a big word, which is probably why we try to avoid it when they're young. Don't be daunted! The important thing is that your kids are exposed to these practices. It's important also that they grow into a more sustainable and ecologically-conscious lifestyle. It will then be easier for them to consistently make good choices when they are older.
It's never too early for them to learn things that will help them protect their future.
We all love our kids. And by teaching them to make informed choices, we are helping to shape the better future we all wish for. Our kids will be the ones to reap the benefits of our drive to protect the planet.
So practicing sustainability is about making sure that there are enough resources to go around for generations to come.
It's about making sure that our kids will inherit a world that is equal and just.
And most importantly, it's about enabling your kids will do the same for theirs! Once we set precedent to our kids about our love for the planet and our will to protect it, they will continue the practice and pass it down to their kids too!
Last April 21, I had the pleasure of delivering an online webinar hosted by SmartPurse. I was invited to talk about "How To Teach Your Kids About Money" in their Weekly Money Hour session. In this webinar, I got to talk to fellow parents about about the importance of teaching your kids about money.
I discussed why it's important to introduce kids to the concept of money and savings as early as possible.
I've worked in finance long enough to see that we need better ways to talk about money, especially to little girls. To tackle the gender pay gaps we still experience in the professional world, we need to equip young girls with the skills to talk about money with confidence. I realised that if we only talk about earning, equality and knowing your worth to adult women and men, we are tackling the problem 20 years too late!
Here are three important research-based facts:
Confidence is shaped by the age of 5.
Adult money habits are set by the age of 7.
Girls can experience pay gaps of 10-30% by the age of 10.
This is why I push for early financial education with kids, girls and boys alike.
The earlier we discuss money and confidence, the earlier we can help children to understand the notions of time-value and equality, and to adopt good money behaviours. Learning relies a lot on concrete actions and routines, so it's essential to start them early. You can incorporate money conversations and negotiation training in their everyday. Negotiating the value of a chore is an important part of learning to know one's worth and speaking up confidently to claim that worth. You can integrate these lessons on everyday things like allowances and chores.
With your guidance, your kids will be able to grow up responsibly, conscious about value, fairness and equality.
After all, it's easier to raise kids with the right habits. Undoing any bad habits they grew up with is so much harder.
According to the World Economic Forum, it will take about 257 years before we can reach economic gender parity. We cannot wait another 7 generations to close the gap.
This is why I created A Smart Way To Start. I want to encourage parents to teach their kids about money, equality and sustainability. If we start these conversations with kids early on, they will grow up and come into the workforce already well-informed.
Imagine if we multiply these efforts to thousands or hundreds of thousands of families. We will come to a new generation of workforce that is financially-savvy and equality-minded.
Imagine how pay and workplace equality will be revolutionised when a generation of well-informed children come of age. Imagine how policies and regulations will change when a generation of values-driven youth enter the workforce.
When we teach kids about financial responsibility, we are teaching them how their money impacts our world. How it impacts others (fairness and equality) and how impacts our planet (responsible consumption/production and sustainable choices.
Indeed, money is not only a transmission of value, it's a transmission of values. With issues like global warming, unjust work policies, unsustainable business practices, every money decision counts! Teaching your kids about ethical and eco-friendly options lets them know that they have a choice when spending their pennies. Each product they choose to spend their money on will show that kind of practice and policies they support! When we choose consciously, we can have a huge positive impact!
That's how powerful money is.
At the end of the day, despite whatever money and sustainability lessons we try to impart to our kids, they won't believe us if we don't practice what we preach. We have to set good examples to our kids.
Let's be more conscious with our with our purchase choices, especially when we're around our kids. And even with our savings and investments, we can chose to steer our money towards more positive impact. This might still be quite an abstract notion for little kids, but as they grow older they will grasp this notion too. In whichever form we give money to companies, whether buying their products or buying their shares, we are supporting the way they do business.
If we want to raise our kids to be conscious and discerning adults, it has to start from us.
If you'd like to watch the whole webinar, check the video below:
My bother is called Edmund.
He’s soon 12 years old.
He enjoys going swimming,
even when it is cold.
He loves going snorkelling
at the seaside,
and plays by the rock pools
when it is low tide.
He wants to protect
all the oceans and seas,
and make sure the water
is all plastic-free.
His dream is to learn
how to dive in the deep,
and see in real life
a pretty “leaf sheep”.
He loves the anemones,
sea snails and slugs,
and he’s equally friendly
to beetles and bugs!
Siamese fighting fish, blue angel sea slugs (glaucus atlanticus) and leaf sheep sea slugs (costasilla kuroshimae).
Those who don't know history are destined to repeat it.
Edmund is named after Edmund Burke (1723-1792), who was an Irish political philosopher and statesman often regarded as the father of modern conservatism. He wrote about the importance of moral stability and was a proponent of underpinning virtues with manners in society.
One thing that I want to talk about that may seem very obvious is how to teach your kids to save money. I talked about how important it is to teach your kids about money, to give them an allowance, and to open a bank account for them. Now, I want to talk about concrete steps on how to teach and encourage your kids to save money.
The whole idea of financially educating our kids is to prepare them for the future. Teaching your kids how to (and why they should) save is the most important part of any financial education.
After all, smart saving is the core idea of financial savviness. We teach our kids to save the right way so that they can have a comfortable future. The idea is that we teach our kids not only how to save money but also why they should save money.
As parents, it's our responsibility to guide them and help them. I want to help you do so by giving you some simple, practical guidelines.
As I have mentioned before, kids learn more easily when things are concrete and not too abstract. This means that they retain things better when they are visible. Writing down their savings goals is a simple way to take advantage of this.
For example: your child wants to buy a £30 toy. You can print a savings sheet that your child can cross off or draw on every time he/she puts money towards that goal. That way, they see their little efforts adding up towards their savings goal!
There's no better way to keep a kid at it than through constant positive reinforcement. And what better way to positively reinforce your children’s behaviour than by letting them see their goal getting closer.
A simple explanation of saving is putting money aside for future use. But smart saving is also making sure that you are teaching your kids the different uses of money.
When teaching your kids how to save smartly, you need to explain how to allocate their funds. You have the opportunity to introduce the following 4 categories:
Each category should have its own jar or section in a piggy bank with multiple slots. I recommend the KinderCash because it's a piggy bank that does exactly this - which I think is quite brilliant indeed.
It's important that kids begin to separate their savings into different categories. It makes it easier for them to make sure that their money has a purpose. A tangible meaning associated with money makes it easier to learn why saving is important for those goals to come to life.
Another way to take advantage of your kids' need for concrete hands-on money moments, is to let them count their savings on their own.
When their savings jar or piggy bank is filling up, let them count the money they've set aside. This lets them own their accomplishment: being able to save money for a specific goal. Once they know the feeling of how amazing it is to be able to set aside the amount they counted -- they'll be encouraged to keep on doing it!.
This is definitely the most important step that you, as parents, can take. The best way for kids to learn how to save smart is if they see adults around them do so, too. Often we don’t make these money moments visible to our children. So we warmly encourage you to do so.
As your kids' role models, it's your job to make sure that you set good examples for them to follow. If your kids don’t see taht you are saving, they won’t know that you certainly are. Keep your own savings and spending jars near those of your kids, and show them that you too are putting in your pennies, that you later bring to the bank. If they see that you are walking the walk and talking the talk, then your kids will be encouraged to follow. As parents, we should always act and practice the things we are teaching them.
Here at A Smart Way To Start, we want to make sure that our kids are not only putting aside money for the sake of saving. We also want our kids to grow up living a conscious and fruitful life.
We aim to teach kids that money is an expression of values and share practices that will help them become savvy and forward-thinking adults. We hope that all kids may become responsible stewards of the planet.
If you want to receive more tips and ideas on how to talk about money with kids The Smart Way, join our Monthly Money Tips newsletter.
My father’s called Adam
and he’s very tall.
So tall that beside him
I look very small!
He enjoys telling jokes
and he loves silly puns,
We laugh - or we cringe -
and it’s really such fun!
My dad’s a great cook
and I love what he bakes:
the best apple crumble
and coconut cake.
When it comes to our chores,
here’s what he’ll tell:
“If a job is worth doing,
it’s worth doing well.”
We’ve heard this a million times,
if not more.
So Edmund and I
must always make sure
we’ve done all our work,
and checked how it’s done,
then we can go out
and play in the sun.
What do you call cheese that isn’t yours?
All money is a matter of belief.
Adam named after Adam Smith (1723-1790), who is a famous Scottish economist, moral philosopher and pioneer of political economy, who laid the foundations of free markets and the division of labour.
Banking is the most important (and most basic) financial institution. Everyone will encounter the bank at some point in their lives, right? So it's much better for your kids to be familiar with banking sooner than later.
The best way to talk about banking with the kids is to make them understand how important banks are in safekeeping people’s money and lending money to people and companies who need it to grow.
You have to let the kids know what banks can do for them as children and individuals.
First, a bank is a place to keep and safeguard their money. It can’t get lost and you can get it back whenever you needed it.
Second, it's there to help them prepare for the future by helping them safely increase their savings.
Third, it's there to help them in case they need money when they are older.
It's important to explain it in a simple manner first and then expand on these concepts as they grow older.
Kids will most likely ask you why they need a bank account when they can simply save their money at home. So here are several reasons you can tell them, to explain to them the importance of banks.
Explain to them that banks will keep their money safe. They have personnel and systems designed to make sure that money is stored securely. In olden days money was kept in large safes (though today it is managed digitally). You can explain that it's not advisable to keep big amounts of money at home. It's dangerous and there's a risk that it could be stolen.
Explain that money that you have on hand is money that can be easily spent. Putting your money away in institutions like banks creates a barrier to deter you. Instead of getting the money from your wallet to spend it right away, you need to think twice before doing so. Wise spending is one of the most important aspects of managing money.
Explain that banks have the capacity to make your money grow while in their care. Banks lend money to other people or businesses and use the money you put in to do so. In turn, they pay "interest" to you because they used the money you deposited to lend to others. But you needn’t worry: you can get your savings back whenever you need them.
Explain that banks will allow you to borrow money them if you need it. But also explain that borrowing entails responsibilities, costs (negative interest) and very careful money management. Also, don't forget to include to mention credit tools like credit cards and cheques. It will become very important tools when they grow older. (See our e-book A Smart Way To Spend Digital Money for more details on this. The same way you cannot touch digital money, you cannot touch this book. It is digital only.)
1. Make them open a savings account. As I mentioned in my previous post, a savings account will definitely help your kids jumpstart their financial journey.
2. Bring your kids to the bank. Whenever you do simple transactions like withdrawing or depositing, bring the kids. Make sure they're also there when you open their savings account.
3. Make them count their own money. When doing transactions for their account, make your kids count their own money. Let them be the one to hand over the money to the teller as well.
It's important for you to demystify banks to your kids early on, to reduce the barrier for them to access these institutions. With banking becoming more and more digital as well, it's important that you introduce them to the brick and mortar concept of banks.
As I mentioned in my previous posts, younger children tend to think more concretely, and tangible, tactile experiences make learning easier. This means that bank visits will be very beneficial to them. Keep exposing them to the bank whenever you can so that it's easier for them to practice on their own when they are older. After all, our goal is to make sure that they are independent and educated financially.If you want to learn more tips and tricks on raising and training kids financial responsibility and independence, subscribe to our Monthly Money Tips.
My grandma is Beatrix.
Her hair is all grey.
She has lots of wrinkles
that don’t go away.
Her blue eyes light up
whenever she smiles,
and her favourite thing
is walking for miles.
She might not be young
but she still is quite fit,
she strolls through the fields
and won’t stop to sit.
She loves taking photos
of birds in the sky,
and watching the swallows
that swoop as they fly.
She once owned a business
but now she’s retired,
and likes to write stories
at night by the fire.
Each single story
comes straight from her heart,
and I love all her lessons
on how to be smart.
Swallows, blue jays and red-cheeked cordon bleus.
And Francis, of course!
There is something delicious about writing the first words of a story.
You never quite know where they'll take you.
Beatrix is named after Beatrix Potter (1866-1943), who was an English writer, illustrator, natural scientist and conservationist. She wrote twenty-three wonderful children’s books featuring animals and illustrated her books with lovely watercolour paintings. She is the inspiration for the watercolours in A Smart Way To Start.
Here are some arguments why opening a bank account for your kids early on is one of the best things to do:
It's a great way to start teaching your kids how to save, especially for the long-term.
When you open the bank account with your kids, make sure to let them know why the bank is the best place to keep the money. Ask the bank teller to explain to your child what a bank does and why the child’s money is safest there. Most banks have children account packages of some sort that allows children to engage in a playful yet serious way. And whether they receive a savings booklet or an account card, make sure they know this is theirs and that you are the guardian of it for them.
As I mentioned in my older post, use every moment you can to teach your kids about good money habits. Taking them to the bank is a good one.
While money on an account might feel a bit abstract, make a point of taking your child regularly (at least twice a year, better if once a quarter) with you to the bank to deposit money from their piggy bank. Help them count the money and then let them hand over the savings book to the teller. This way it makes the banking experience a bit more tangible. And you can show your child how their savings are growing over time. So whenever you can, take your kids with you to the bank. Especially if it's their account you're going to deal with, make sure the kids are with you.
I know ATM cards are the norm nowadays, but I recommend that for younger kids, you need to use passbooks first.
With a passbook, you can easily see how money goes in and out of the account. Everything is recorded and kids can see how the money adds up every time they make a deposit. Besides, there's no need for an ATM for kids when they're young anyway. They will not need to spend money on big-ticket items, which is very irresponsible.
You can consider giving them an ATM card or a prepaid card when they're older and are more responsible with money. By the time they're old enough to own an ATM card or a prepaid card, they're mature enough to be responsible spenders.
Opening an account for your kids is also a good way to to start taking advantage of the compounding interest in banks, if your savings account still has a positive interest rate - which is admittedly becoming a rarity nowadays, as interest rates are negative in many countries. Nonetheless, If you start putting money on their account from a very young age and don't withdraw from it, imagine how much your kids will have accumulated by the time they’re 18! And if you discuss with your bank how best to invest these savings, you can certainly benefit from long term market developments despite the short term ups and downs..
In fact, especially for long terms savings that you do not need to draw upon in the short term, investing is the best way to achieve a positive compounding effect over the years. Make sure you explain to your child that this is how their money is “working for them” by circulating in the economy, and this is how it generates a return. That will encourages them to continue saving up over the years.
One of the most important pros that I can point our for this is the positive effects on a child's development. Studies on Oklahoma's (United States) Child Development Accounts (CDA) program "shows that creating lifelong savings accounts for children at birth promotes their long-term well-being"
The hypothesis was that CDA and other similar asset holding or building accounts would positively affect a child's well-being and development. The study showed that kids who had money deposited in a special education savings account had better social and emotional scores compared to those who didn't.
You see, this becomes a domino effect for the kids and the expectations we have for them. Opening a savings account increases your confidence and support towards the kids. If you open an education fund for the kids, then it already creates a sense of expectation towards education. With that, parents will tend to encourage their kids to excel or do well in their studies.
I don't see any reason not to start very early with opening a bank account for your kids. It's one of the most important things to tackle, in order to nurture good money habits.
If we want our kids to grow up forward-thinking, financially responsible, and financially literate, then banking is one of the most basic things that we can do for them.
If you want to read more tips and tricks on raising and training kids to be financially responsible, subscribe to our Monthly Money Tips.