Here’s the middle-class female life plan in 39 words. Get good grades. Go to college. Marry. Pay your dues to prove you’re worthy of a non-miserable job. Birth 2.5 children. Teach said children the life plan. Retire. Figure out what you actually want to do with your life.
None of this required financial education for women 70 years ago. There were crazy things then, like pensions. Home-ownership was possible on a single income. A minimum wage job could pay for college. Unfathomable.
But nowadays, in spite of traditional gender roles, there are some excellent reasons to teach your daughter a thing or two about personal finance — reasons that directly benefit you.
#1: No Loans to Co-Sign!
Millennials (and soon Zoomers) aren’t buying houses without their parents’ help. It’s just not in the cards. It could be co-signing a loan, helping with the down payment, or even helping with the mortgage.
I mean, did you see that recent study about how many hours you’d have to work on minimum wage to afford an apartment? Dude.
But let’s say she has a career with the potential for home-ownership someday. The sooner she’s independently wealthy, the sooner you aren’t financially on the hook for her decisions.
#2: Your Son-in-Law will be useless
A good friend once told me, “behind every successful man is a surprised mother-in-law.”
Let’s be honest, no one is good enough for your little girl. There just aren’t enough doctors, lawyers, and CEOs to go around. Even then, if her husband is too successful, he’ll trade her in for a younger model in 8 to 12 years anyway.
We all can rattle off divorce statistics. You know them. Divorce or not, she’ll need the financial discipline to keep the family afloat.
By teaching her to invest while she’s still young, she can build-up capital to be the one asking for a pre-nup. Then, no matter how the cookie crumbles, she’ll be self-reliant. Plus, you can have the satisfaction of knowing that she’ll come out ahead because you taught her well.
#3: Grandkids are really expensive
Kids are expensive. You know this.
Let’s say your daughter realizes her mistake in marrying someone useless and divorces him. A woman’s financial situation tends to plummet post-divorce. By the way, 30.7% of custodial parents see precisely $0 of their court-mandated child support.
This leaves you in an awkward situation. If you’re retired at this point, you can diminish your spending to help support your grandchildren or let their mother handle it. But, you know, family first…so, sorry about that annual Caribbean cruise.
Wouldn’t it be nice to have the option of paying for your grandchildren for fun rather than helping support them?
#4: You can spend down your retirement funds without worry
One of the big selling points on life insurance is the gift of leaving something behind for your children. That’s a sweet thing to do.
But, if you teach your daughter how to max out her Roth IRA at 18 and invest 20%+ of her income each month, she’ll be well on the road to being “comfortable.”
You won’t have to worry about leaving something behind to help out your daughter. She’s already volunteered to take care of you as you forget where you placed your ability to live independently. It must be around here somewhere.
#5: She’ll be doing your elder-care
Statistically, women take care of their parents when their parents reach the venerable age of needing someone to take care of them. According to a 2014 survey, daughters provide 12.3 hours of unpaid care for a parent every month, whereas sons offer 5.6 hours.
This can cripple your daughter’s ability to earn income, invest, and save for retirement. Between a career, child care, household maintenance, your care, and heaven-forbid her own self-care, something will give. There aren’t enough espresso shots in an entire Dutch Bros drive-thru to sustain that workload.
Chances are, she’ll put her career on hold or retire early if she can to meet the other demands. It’s not like she can put you or the kids on hold.
Conversely, if you decide you’d rather live in a retirement home, she’ll probably be chipping in financially. The more money she can spare, the better accommodations you’ll have.
Either way, if you want to spend these years in peace, it’ll be better for you if she’s financially savvy.
#6: She’ll have a nicer car to drive you around in when it’s no longer safe for you to drive
Not that you’ll ever get to this point. You’ll always be perfectly competent. Not like that distinguished lady I saw last year. She was driving perfectly centered on the lane dividing line at 15 mph.
But if you decide someday that driving is now beneath you, your daughter, the self-appointed unpaid caretaker, will be able to drive you around in a fancy, new crossover that’s neither too low to get into, nor too high. You can comfortably fall into the passenger seat and critique her driving like she’s back in high school.
Maybe, if you really nailed it with the financial training early on, she’ll be able to shuttle you to doctors’ appointments in a Bentley.
Okay, But Seriously
The real point here is not seeing doom around every corner. Every person depends on their ability to earn income. What one does with that income will determine their future options. If you want your daughter to have options as she journeys through life, she’ll need to know her financial tools.
The trick comes at the moment a child understands that her money can do more than buy cookies or lip gloss. It can buy her more money if she has the patience to wait a little bit. In turn, that can buy her even more cookies or lip gloss, but the purchase impulse will have passed.
“There is no feeling in this world to be compared to self-reliance — do not sacrifice that to anything else.” — John D. Rockefeller
Eventually, children leave home. Understanding personal finance offers freedom — freedom from bad debt, freedom from being stuck in a job/relationship, and the freedom to realize all of her potential.