How Parents Fail Girls When They Talk About Money

Recent studies show that women are woefully unprepared for retirement and lack the confidence to make the bold investing decisions they need to secure their financial future. Now, new research reveals just how far back the roots of this problem go. Parents, you’re leaving your daughters behind when it comes to educating them about investing.

“Parents might subconsciously be socializing their children differently,” says Lynsey Romo, an assistant professor of communication at North Carolina State University and the study’s lead author. In interviews with more than 100 school-aged kids who averaged around 10 years old, researchers found that even at that young age, parents make gender-based distinctions in what they choose to talk about, and kids pick up on what they’re not being told — sometimes drawing incorrect conclusions that can have repercussions for them in the future.

More girls say their parents talk to them about spending money, checking accounts, earning and family finances. Boys were more likely to say their parents taught them about borrowing, budgeting and savings. “I think parents might just have this latent view that boys are more of the providers,” Romo says. “There might be some latent cultural assumptions there, for sure.”

These discrepancies pale in comparison to the gender divide when it comes to investing, though. “The results yielded a significant difference between girls and boys…with respect to communication about investing,” Romo writes.

Economists, behavioral scientists and other observers are realizing we have a big problem when it comes to women and investing. “Maybe parents are thinking girls don’t need this information, but we know that women do,” Romo says.

For instance, BlackRock’s Global Investor Pulse Survey released last month finds that only one in five women around the world say they’re comfortable investing in the stock market, and more than half agree with the statement “I am not willing to take any risks with my money.”

In the U.S., just 41% of women say they’re confident about making investment decisions, while 58% of American men say they are.

Romo’s research suggests that building this confidence needs to start much earlier if we want to avoid raising another generation of girls who aren’t capable of making the investment decisions they need to make.

“There’s so much out there about how grown women need to take control of their investments,” she points out. “Parents [think] that boys need to learn more about investing than girls do, but we know girls need to know,” she says. “Otherwise, girls are at a disadvantage later in life.”