The Importance of Teaching Girls Money Confidence

If we want to change the wage gap for our girls, we must teach money confidence. When girls learn about money, they learn critical life skills like salary research and negotiation, and the need to maximize their incomes throughout their lives to build wealth and financial independence. They also learn about investing and the power of compounding and time. That information can help girls learn to start saving early in their careers to ensure sufficient funds for retirement. Finally, girls’ financial literacy means a foundation for creating a life with opportunities and choices.

Why Teach Girls about Money?

Money Confidence

  • End the gender wage gap
  • Promote economic empowerment
  • Ensure a safe retirement
  • Create opportunities throughout life

The scary financial story for our girls today is that despite the Equal Pay Act of 1963, and lots of press about Hollywood and other industry wage discrimination, women working full-time continue to earn a fraction of what their male counterparts do — coming in at 80 cents on the dollar in 2017, according to the U.S. Census Bureau. Even scarier is that our academically successfully — and frequently superior — recent female college graduates continue to under-earn their male counterparts. According to a recent study by the Economic Policy Institute, recent female college grads earned 86% of what men earned in 2015, down from 91% in 2000.

Salary Negotiations

Money Confidence

So, what does that cost women in a lifetime? Studies show that a half million dollars is what under-negotiations in a first salary can cost someone by age 60. Why is this still going on despite policy changes, publicity, and overall greater awareness of the problem? One thought is that women earn less because they do not negotiate salaries as effectively as their male counterparts, if at all. So why not? Let’s take a step back and look at what happens as girls grow up and what they learn about speaking up for themselves.

Psychologist Carol Gilligan has shown that girls learn between the ages of 11 and 15 or 16 that it is dangerous to say how she actually feels, compared to younger girls who are more courageous. Conversations with older adolescents can be marked by the phrase “I don’t know” when a few years earlier, the girls were outspoken and confident. Another psychologist, Mary Pipher, talks in her book Reviving Ophelia: Saving the Selves of Adolescent Girls about how girls who speak frankly are labeled negatively, and that girls are trained in society to be feminine and to “achieve, but not too much.”

In my experience as a mother and a teacher, I remember my middle school daughter and her friends starting to say that it was not nice to “brag,” which really meant avoiding saying positive things about themselves. Later, in my financial education classes with high school girls, I saw the evolution of that idea. When asked if my students would ever try to negotiate a higher salary, one girl said she would not ask for more money if it could hurt the company or other people working there. Another girl said she would never speak up for herself; she would work hard and wait to be noticed.

Money Confidence is the Answer

Money Confidence

So how do we break this cycle for the next generation of women? The answer is money confidence. Money understanding is multi-faceted. There is the knowledge that needs to be acquired, there are the skills that need to be developed, and then there are actions that need to be taken. For example, it’s not just enough to know that you should be earning what you’re worth, you actually have to negotiate the salary. In simple terms:

Money Understanding  = Knowledge + Skills + Disposition

Money confidence is believing in your ability to take care of yourself financially. It involves the ongoing learning and demonstration of the skills, mindset, and deeper understanding of how the critical financial pieces of your life fit together. These pieces include human capital, wealth management, and value creation.

In one recent high school girls financial education class of mine, we discussed the context of women and money, looking at issues around the gender wage gap, women and work, girls’ rising ambition levels, and the importance of income in the overall financial picture. We did a fantastic exercise about salary negotiation, so the girls could begin to understand — and experience — that critical process. When we came back together for a debrief of the activity, the girls discussed the challenges of the process and also the exultation when they had made a strong argument for a raise and got it. We talked about what it would take for them to negotiate a higher salary in a real-life situation. In the exercise, the girls had to make a case for why they should be paid more. During the debrief discussion, one student remarked that she could see how much confidence in herself would align with what she would be paid in the future. The answer is obvious. Without confidence in your own worth it can be difficult, or even impossible, to make a cogent argument on your own behalf, or even start the conversation for a higher salary.

The Gender Wage Gap

Money Confidence

Salary negotiations can be tricky. Part of the process is speaking up about your skills and contributions, defining that value in the workplace, and asking for more of the employer’s scarce resources for yourself. So, if you are someone who has grown up being taught not to “brag,” chances are explaining your skills and asking for recognition of your value is not going to be something that comes easily to you.

While the gender wage gap is caused by a number of different factors, an unwillingness to negotiate is certainly one of them. Carnegie Mellon economics professor Linda Babcock suggests that men are four times as likely as women to negotiate their salary. When we look at the evolution of adolescent girls, it is easy to see where women’s reluctance in this area might come from. Once we know where a problem comes from, the solution becomes that much clearer.

For more information on teaching finances to children, check out 5 Priceless Tips for Teaching Kids About Money


Melissa Donohue

About the Author: Melissa Donohue, Ed.D. has done extensive research and writing on women’s financial literacy, and is the founder of Financial Nutrition, a non-profit organization focused on women’s and girls’ economic empowerment. She is the author of the book ­Financial Nutrition for Young Women: How (and Why) to Teach Girls About Money, a 2018 recipient of the Independent Publisher Book Award. Currently, Melissa is the Senior Managing Director for Family Wealth Education and Leadership Development at Cresset Family Office. At Cresset, she is responsible for all financial education initiatives, and leadership development for ultra high net worth families. Melissa has a Masters Degree from Columbia University and a Doctoral Degree in Education from the University of Massachusetts. She is involved in a variety of educational initiatives including serving on the board of CISV-New York, a global organization focused on youth multicultural learning. Melissa was selected to be a founding member of the Columbia University Alumnae Leadership Group, and is on the Executive Committee of the Alumni Association of the School of International & Public Affairs at Columbia University. She is a Class President and Class Agent at Oberlin College.For more information about conversation points and activities to teach your girl how to grow in confidence, articulate her worth, and negotiate a salary, go to

Picture Credit: Pixabay

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