Chats with my daughter: talking money, building confidence
Emma Douglas, Director of Workplace Savings and Retirement, shares three ways employers can build their future workforce by supporting women’s financial knowledge.
It’s in the moments that were easily missed, and often forgotten in the hustle of everyday life, where her confidence grew. Between reminding my daughter to eat her vegetables and tidy her room, at different stages and ages of her life, we chatted about the value of things. And, of course, about money.
As a child, my daughter would often join me on our weekly shop, and we’d have lively debates about which biscuits would make their way to the checkout. Or how much pocket money she’d need to save for the new cuddly toy that grabbed her attention.
Over the years, the building blocks of her financial knowledge were stacked on a solid foundation of seemingly inconsequential talks; letting her voice and thoughts be heard. Now, at seventeen, our chats look to her career options, and she is taking the lead weighing them.
For employers, my daughter and young women across the country may hold a valuable lesson: our financial literacy, and confidence with money, can affect the health of a workforce. And, by supporting financial education in our children today, employers can build that strength into their business of the future.
Women’s financial education and confidence
In my career, I’ve watched the financial world change towards more equality of resources and opportunity in the workplace. But, there’s more to be done.
From lower participation in the stock market, Footnote 1 to gender differences in subjects like maths (and science, technology, and engineering), there’s a worrying pattern surrounding women and financial education.Footnote 2
Our latest Working Lives report (2023) finds that, “Men are significantly more confident than women at planning for a financially comfortable retirement (58% of men versus 44% of women).”Footnote 3
Studies have also found that women have less financial literacy than men, and across The Organization for Economic Co-operation and Development (OECD) member countries, men have greater financial knowledge and financial wellbeing scores.Footnote 4
Gender differences in understanding money issues, says one OECD study, may make it more difficult for women to find a safe financial future and participate confidently in economic activities.Footnote 4
This shouldn’t only concern parents and carers of young women, but also business owners and employees. From retirement planning to securing mortgages and confidently moving through a career, understanding the impact of financial decisions is the bedrock of a healthy economy.
Being able to understand and make informed decisions about financial planning, wealth building, pensions and debt shouldn’t be seen as lofty goals for women. It’s a necessity. And there’s much to do in building women’s confidence around money.
In a recent study, only a quarter (25%) of women (versus 42% of men) rated their financial knowledge with investments as ‘good’. And while 31% of women rated their understanding of retirement planning as ‘good’, nearly half (46%) of men would say their knowledge in this area is ‘good.’Footnote 5
And yet, when asked how confident they are in dealing with day-to-day financial matters like tracking expenses and credit or debit cards, 82% of women (versus 79% of men) are ‘confident.’Footnote 5
As employers, parents, and carers we can empower our youth to be knowledgeable and feel confident about all areas of their finances – now and in their futures.
3 ways to support our young peoples’ financial growth
Encouraging parents to think about long term investments for their children, like a junior ISA or children’s pensions (yes, that is a thing), is great. And if some employees are in a financial position to explore these options, that’s a positive step. However, there are other ways to support employees with their children’s financial understanding.
- Become a financial wellbeing champion – guiding employees towards their own financial wellbeing may ripple down to their children. Footnote 2 Creating initiatives that encourage employees to feel comfortable speaking about finances at work or asking for information to grow their understanding of money, could help break taboos around money. This may translate to employees feeling more confident and comfortable talking about money with their children.
And there’s a solid business case for it, too. “There is plenty of good research evidence,” according to the CIPD, “to show that financial wellbeing is an important aspect of HR strategy.” Footnote 6 And this could mean businesses helping to raise the next generation of financially switched-on employees. To find ideas on how to become a financial wellbeing champion, have a look at our article, Jump through the taboo: financial wellbeing and your employees.
- Bring it into daily life – it’s in the little pockets of life, small moments from day to day, that build children’s awareness of value and money. From playing Snakes and Ladders to playing heated games of Monopoly around the coffee table, these fun moments could help bring abstract ideas down to practical discussions. Encouraging children to count the pounds and pence in their palm before handing it to a cashier or watching the love of a bargain grow into prudent decision making, happens in thousands of moments that make up childhood.
Remind employees that their children’s financial understanding isn’t about a rigorous study program they must develop; it’s more about adding on to the things they’re probably already doing. These reminders could bolster confidence and encourage more fun ideas to help their family build positive relationships with money.
- Build a community of building blocks – parenting is hard. Talking to children about money and values can be hard, too. But recognising that, as parents and carers, we aren’t alone may help ease the anxiety.
Creating a safe space or internal channel at work that encourages employees to share their thoughts, experiences, and resources on teaching children about money may be a positive step. Shared knowledge, and realising you’re not alone, is powerful. This community could be a helpful support network and resource hub for employees with children of different ages.
The more parents and carers feel comfortable and confident about talking money, the more children feel this, too. And the more this could benefit businesses of today and the future.
To learn the latest about employees’ perspectives on workplace matters and money, check out our Working Lives report.
Emma Douglas joined Aviva in October 2021 as Director of Workplace Savings business, with the accountability to deliver the best possible outcome for over 4 million customers/members and their £95bn of assets as they save for and access savings in later life. Emma is also the Chair of the Pensions & Lifetime Savings Association; having previously chaired the PLSA’s Policy Board since 2018.