As a money journalist and blogger, I’m celebrating International Women’s Day by writing about…you’ve guessed it…money.
Pondering issues for women at work and home made me consider what lessons about money I’d like to pass on to my daughter.
Fairy tales have a lot to answer for. Sure, I’d love to sprinkle her with a good dose of health, wealth and happiness. But really I’d like to encourage my daughter to grab life by the scruff of the neck, rather than waiting for a fairy godmother or Prince Charming to step in.
So when it comes to money matters, here’s what I’d like to teach my daughter:
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Money isn’t boring, it can set you free
Mortgages, Isas and pensions don’t sound a whole bundle of fun compared to Pokemon. But don’t get bogged down thinking money is boring, focus on the freedom it can bring. Get your money sorted, and it will give you choices – choices about where to live, where to work, where to travel, who to spend your life with and how much time you have with them. You may not be able to have everything all at once, but by managing your money you’ll have much more chance of making it happen later.
Live within your means
I reckon this is the most important money message I can pass on to either of my children. It’s not how much you earn that matters – but how much you have left. Spending more than you bring in is a sure route to a whole heap of trouble. I don’t think I’d do my children any favours by subbing them every time they want to spend more than their pocket money. Whether they spend less and save up, or earn more doing jobs round the house, I’d like them to understand the value of money.
No-one knows what’s round the corner. It’s never too early to start saving, and no amount is too small – as the long-suffering staff at our local bank have seen, when you hand over pocket money and then whip it out to spend at Build a Bear. Stashing some cash as emergency savings or a freedom fund can help you cope with whatever life throws at you. And remember, investing isn’t only for old men in braces, something I wish I’d discovered earlier myself. Make your money work for you – think interest, dividends and even rental income.
Don’t spend money you can’t afford
See that credit card? It’s not free money. You still have to pay it back. If some bank is willing to give you a credit limit of £2,000, that doesn’t mean you should go out and spend it. As my driving instructor said about the speed limit – it’s a guideline not a target. Think what you can actually afford, and try not to spend more than that. Otherwise, the free money could suddenly become very, very expensive if you can’t pay your bill at the end of the month and get shedloads of interest added.
Treat debt with respect
Debt is expensive. Borrow money, and you have to pay interest to someone else. Save the money yourself – and someone else will give you money as interest instead. So where possible, try to spend your own money rather than borrowing from elsewhere. If you are going to borrow, make sure it’s for something worthwhile. Maybe you need the education to get a job, a car to get to work or a home to live in. Check the interest rates and repayments, so you don’t take on a bigger burden than you can afford to repay. But if you do end up with debt problems – don’t be ashamed, don’t leave it to get worse, and seek help sooner rather than later.
Once it’s gone, it’s gone
Fancy the expensive sweets, toys, shoes, holidays or whatever else? Sure, save up until you can splash the cash. But remember – once it’s gone, it’s gone. Once the sweets are eaten, or the toy broken, or the shoes go out of fashion, you can’t get the money back. All those small items could add up to a whole deposit on a house, or the chance to quit a job you hate. Weigh up how much you really want something, and how much it would stop you getting something else. But once it’s spent, no point beating yourself up. Don’t cry over split milk or spent money, pick yourself up and carry on.
Forget Prince Charming, stand on your own two feet
Don’t hang around waiting for some man (or woman) to sweep you off into a life of luxury. Take responsibility for your own career and earning power. Work hard to get your own job, so you can pay your own bills and save for your own future. I really hope you do find someone to share your life with. But sometimes Mr Right turns into Mr Very Wrong, looking at the divorce statistics. Don’t leave all financial decisions to your other half, think twice before taking on a joint account and always keep some money in your own name.
Know your own worth
Don’t assume certain jobs are for boys and others are for girls – pursue your own path to the best of your abilities. Know your own worth, so you speak up for pay rises and promotions. Make your own choices about how you juggle work and family, and try to avoid feeling guilty whatever you decide (easier said than done). If you do ever take a break from getting paid, consider how you might return to work in future – you never know when you might need to earn your own income again.
Fund your own future
I may seem as old as it’s possible to get (“Mum, were you alive in the Stone Age?”), but believe me lots of us are living a lot longer! Odds on, my kids will make it past their 100th birthday, and women have longer life expectancies than men.
That’s an awfully long time to keep working, if you don’t set aside any money for retirement.
So while you’re earning, remember that money doesn’t just have to cover right now, and you’ll need to save for your future too. If your employer and the government are still willing to give you money towards a pension, take them up on the offer.
Don’t measure yourself in money
I’ve banged on at great length about money, but remember there are far more important things in life. Don’t define yourself or others by how much you earn or how much you own. The clothes you wear or the car your drive don’t make you a nicer person. Just because something costs money doesn’t make it worthwhile. The most important things in life aren’t things at all. Kindness counts.
Now over to you – what lessons would you like to teach your own daughter? What do you wish you had learnt yourself? I’d love to hear your thoughts, so do comment below.