Every time I see my two young nieces, I’m reminded of what perfect, untouched little souls they are. They’re so lucky to have been born in a country where girls do have the opportunity (theoretically) to do whatever they aspire to.
Yet I often worry when will the influence of social media and unconscious gender bias take hold? According to one university study, by the age of 6 girls already consider boys better suited to “really, really smart” activities!
As an aunty I often think “what can I do to help them become confident, independent, self-assured women?”. One recurring thought is learning how important it is to have your own money for independence and how to earn it.
How is it so many girls in Australia (and around the world) grow up unaware of what it means to be financially independent?
Sure, I was good at maths in high school, but I didn’t have a clue about money. It wasn’t until I did a finance degree and became an adviser that I really understood basic money concepts.
I know I’ll share what I’ve learnt along the way to save my nieces from making the same costly mistakes I made in the past. My top five money lessons will be:
1. You can’t live in your shoes
In the world of online everything, shopping, fast fashion and sale after sale, spending a dollar couldn’t be easier. Before you know it, you have a new skirt, new shoes, new handbag in the mail and on its way. Your money spent, just like that, never to be spent again and for how much gratification?
Remind yourself of the time and effort it took to earn that dollar and question if it’s better-off saved for something more meaningful in the future, like a deposit for a house or a trip overseas!
2. The magic (and horror) of compound interest
There are two types of compound interest. The first is the magical type that comes from investing your money, where you earn interest on your interest.
The second, slightly more horrifying type comes with using credit cards, where you pay interest on interest if you can’t pay the balance off each month.
Some cards charge a whopping 20% p.a. interest or more. Compounding credit card debt can follow you around for years. Avoid using credit cards for as long as possible.
3. Negotiating is fun
Use your learned negotiation skills to ask for a pay rise. You’ve negotiated most of your life with mum and dad right? So, do the same in the workplace.
On average women earn $25,000 a year less than men. That’s a huge difference over your working life! Workplace diversity and gender is finally high on the agenda in many organisations, so even more of a reason to back yourself, your skills and your value.
The worst they will say is no… and then you can leave and get a better paying job elsewhere.
4. Sort out your super
Super matters… a lot! Over your working lifetime paying high fees for your super can cost you significantly.
Stockspot’s Fat Cat Funds research shows super funds that charge 1.5% p.a. or more in fees could cause a woman in her 20s or 30s to lose about $250,000 in fees by the time she retires. That’s a lot of money.
You may not always be able to control how much you earn, but you can control what you pay in fees by switching super funds.
If you change jobs, make sure you consolidate your super, so you don’t pay two lots of fees. This is super important!
5. Make your money work for you
Your money won’t do much sitting in a savings account earning next to nothing in interest. Investing can help your money grow over the years meaning there’s more for future you.
Consider this. Would you rather earn 3-4% p.a. from a savings account or 7-8% p.a. from investing over the long term? The choice is clear! You just have to accept there will be ups and downs along the way. Investing is so much easier these days with online investment companies like Stockspot.
Or if you have a passion you think you can earn money from, start it as a side hustle and see where it takes you!
Finally, in a world where we constantly live up to standards, compare ourselves to others (where they’re at, what they have and what we don’t…) STOP IT! It can be never ending and cost a lot mentally and financially. Most of what you need you already have.
Stockspot makes it easy to grow your wealth and invest in your future.
