Picture Wall Street during its most notorious days — intense pressure, high stakes, testosterone, insane amounts of money, expense accounts, fancy dinners, limos and very few women. A war zone from 9:30 a.m. to 4 p.m., you all go out for drinks after the closing bell to destress and reconnect, and back to the battlefield the very next day.
That’s when I started my career in finance. As a college graduate, I fell into a job as an administrative assistant at a financial firm. As I became immersed in the industry, I learned to compete and thrive in the male-dominated field. I worked hard to quickly climb the ranks, collecting several licenses along the way, and ended up working on the institutional side of Wall Street for 25 years.
I’m now a wealth advisor and proud mother of two amazing daughters, ages 19 and 21, truly my greatest accomplishment. For Women’s History Month, I wanted to share some of what I have learned along the way, and how I’m raising my daughters to be financially independent.
1. Have them open their own bank accounts
Take your kids to the bank and set up accounts in their names. If your child is under 18 then you would need to set up a custodial or joint account. Notice I didn’t say to fund their bank accounts. Whenever they get money for birthdays, holidays or work (more on that below), make sure they deposit a good chunk of the money into their account. It’s important that they get to experience the process and see the money grow in their accounts.
Teach them how to deposit checks with their bank’s mobile app and show them what happens when they buy something with their debit card — and the consequences of spending more than they have. Technology can make money feel like it’s not real sometimes, so it’s important that they understand the value of their digital dollars.
2. Encourage them to work
At a young age, both of my daughters worked. I knew it was important for them to learn the value of a dollar and develop a work ethic. This promotes financial independence, so why not start at an early age? Initially they worked at the nursery school in our town, which would turn into additional babysitting jobs in the evening. Now, they are beach lifeguards over the summer during breaks from college. They work hard, full-time, sometimes till 7 p.m., which allows them to appreciate their days off. This helps them understand that nothing is given to them, and everything must be earned. It also keeps their spending habits in check; they understand the limits of what they should spend, because it’s the money they work very hard for.
3. Make investing fun and relatable
The markets can be confusing and even frightening, especially to people who haven’t been taught about the risks and rewards. So, I knew I had to teach my daughters about investing early. I asked them to pick a brand they liked by giving them examples of companies I know they followed and told them to pick a couple they believed in.
You can start with individual stocks or index funds, which is a great way to get them involved early. If they have earned income, they can open a Roth IRA for tax-free growth and tax-free withdrawals come retirement. The greatest thing they can do is to get an early start on their retirement savings.
4. Let them make mistakes
As a mother, I worked hard to bond with my children on activities that didn’t require materialistic things, to avoid teaching them potentially harmful habits. Of course, we go shopping together from time to time, but they have dialed that back all on their own. Sometimes my daughters would go to the mall with their friends and come home with a purchase just for the sake of buying something. Of course, it’s normal for teenage girls to buy clothes, but it’s not a good habit to reinforce if it’s excessive.
So how did we fix this? Early on, I would ask questions about the price they paid for clothes. We would go into a designer store and look at the price, and then go into Forever 21 or H&M to show a dramatic difference in the cost. Also, they started noticing how much things cost when they started paying for things out of their own pockets. Now, my daughters elect not to buy things they believe are too expensive. Sometimes when we are shopping, I’ll tell them I’m treating and to pick out an outfit. They’ll reply, “No, thank you, Mom. I don’t need anything.” WOW! Now that’s a parenting win!
5. Keep an open mind
I’m a big believer in this. As a young girl, I would…