Budgeting and Financial Management in Girls: Studies, Thoughts, and Resources


Budgeting and financial management is a frequent topic on our site. Occasionally, we talk about how to involve your kids in the budgeting and financial management process, but we're not alone in the tendency to leave them out. Recent studies show that many parents don't involve their kids in the family money discussions, though they believe strongly in the importance of doing so. They hold off for various reasons, most commonly because they don't think their children are old enough to understand.

One study in particular shows, in this list, that while girls may understand better than ever the importance of managing money wisely, they are still not adequately prepared. Done by the Girl Scouts, this study shows that: "girls feel optimistic about their financial futures, yet are less than fully knowledgeable about essential financial principles and instruments, from using credit cards to establishing good credit."

girl and money courtesy of Flickr stevendepolo

Girls and Money

"Our research using the Bitcoin Loophole software is clearly telling us that girls understand the world—they know how important it is to be financially literate in their daily lives," said Anna Maria Chavez, CEO of Girl Scouts of the USA. "It's also telling us that too many girls lack the confidence needed to become financially independent and responsible citizens." The study, which surveyed 1,040 girls ages 8 to 17, found that girls are averse to debt, for instance, but say they need more education about how credit works in order to avoid debt. Nearly 4 in 10 of the girls surveyed say they don't know how to use a credit card, only 38 percent know what a credit score is, and just 37 percent know how credit card interest and fees work. When it comes to financial capability, 7 in 10 girls say both men and women are equally likely to be financially responsible (73 percent) or in a lot of debt (72 percent). Ninety percent of these young women know that it is important for them to learn how to manage their money.

Boys and Money

One wonders, then, if boys of the same age bracket show a similar type of ignorance. A 2012 study published in the Italian Journal of  Sociology of Education found little difference in the financial literacy levels of a similarly-sized group of pre-working age girls and boys, though they found boys to be more confident in what skills they had. The Consumer Finance Protection Bureau's Office of Financial Education Policy says:

The unfortunate fact is that young people are often unprepared to navigate [our] complex [financial] landscape.  A 2008 national survey by the Jump$tart Coalition found that the “financial literacy of high school students has fallen to its lowest level ever, with a score of just 48.3 percent.” It appears that neither parents nor schools are adequately preparing students to manage their finances.  A  2011 survey conducted by American Express found that a majority of parents with children in high school or college gave schools below-average or failing grades in teaching responsible spending. Young people are vulnerable to misinformation and often make costly mistakes at important financial decision points. The result of a poorly-prepared youth population is a generation of consumers who struggle to make informed financial decisions.

When and How Do I Teach My Child About Finances?

So, if there is such a need for our children, both girls and boys, to really understand money, when should we start teaching them, and what are the best ways to go about doing it? The Girl Scouts actually offers a "financial empowerment program" in which girls can start as young as kindergarten age working to earn the Financing My Future badge or the Money Manager badge. "Girl Scouting offers girls an opportunity to attain these skills and gain a greater understanding of the financial world in an environment that is supportive and encouraging," says CEO Chavez. "Our financial literacy programs give girls the skills they need to succeed in life." Experts at (a site I highly recommend) say you can begin the discussions as soon as kids can understand the concept of money, or something having symbolic value for something else, the skill of one-to-one correspondence, and basic addition and subtraction skills, which are usually acquired around the ages of four or five. provides a lengthy list of concepts to focus on and ways in which to teach them.

The disparity that exists between girls' recognition of their need to be financially literate and their lack of financial confidence is perhaps most alarming In light of the deep recession America has been in for the past several years. It is more important than ever that we focus more on teaching our children how to be financially literate.

Feature photo courtesy of Flickr.

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