FAMILY

Small lessons have a big impact.

I recently promised that I would weigh in on how to raise money-smart girls. That prompted an email from Anne Chernish, a certified financial planner in Ithaca, N.Y., who volunteered her daughter Sydney, 32, as an example.

When Sydney was about 3 years old, Anne says she began "dropping little hints" about money into her conversations with her daughter. For example, she would ask Sydney to think about where her money came from and what she did with it. As Sydney grew, Anne encouraged her to write thank-you notes for cash gifts, earn money by doing small jobs and save money from her allowance. By the time Sydney was 10 or 12, she and her mom were talking about stocks.

Now a brand manager for Diageo, Sydney has "the perfect financial plan," says her mother. She saves money automatically every month, maximizes her retirement plans at work and is fully invested in the stock market. Says Anne, "The key with kids is keeping it short, not getting into too much detail, and repeating."

Small lessons have a big impact, and parents -- and grandparents -- play a key role in teaching those lessons. Adults often feel awkward talking about money with kids. But the earlier you start, and the more you can make money matters a natural part of everyday discussions, the easier the conversation.

Unfortunately, even when parents do talk to their children about money, there's evidence that they often speak differently to their sons and daughters. A survey by Charles Schwab, for example, found that parents emphasize saving and budgeting with their daughters but are more likely to discuss investing with their sons. So it's not surprising that women are less likely than men to feel comfortable about investing.

Research shows that women don't lack financial competence, but they express less confidence than men when it comes to money matters. It doesn't help that they're less likely than men to talk about money with their friends, which puts them at another disadvantage. So getting an early start is as much about boosting girls' confidence as increasing their financial knowledge.

As a hands-on way of learning to manage money, nothing beats an allowance that comes with certain spending and saving responsibilities. Resist the temptation to shield your daughters from those responsibilities; they need to feel comfortable handling their own money so they aren't tempted to cede that job to someone else when they get older.

Never underestimate the importance of role models, whether that's you or someone else. I once attended an investing boot camp for teenage girls conducted by female financial advisers. Besides asking questions about the markets, the girls were curious about how the advisers got their jobs. When they discovered that one had once been a ballet dancer and another had been in retail sales, it was as inspirational for the teens as anything they learned about stocks and bonds.

(Janet Bodnar is editor at large at Kiplinger's Personal Finance magazine. Send your questions and comments to moneypower@kiplinger.com. And for more on this and similar money topics, visit Kiplinger.com.)

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