In today’s rapidly evolving world, financial literacy has become an indispensable skill for navigating the complexities of modern life. It is for this reason that as we close out the 2024 International Women’s Month dialogue and celebrations, it is imperative that we be intentional about inspiring inclusiveness for girls in the areas of financial literacy and wealth creation.

The importance of financial education for girls cannot be overstated. From closing the gender wealth gap to achieving greater financial independence, educating girls about finances sooner rather than later should be a priority for all because, let us face it, one’s relationship with money and attitudes towards wealth are often rooted in childhood experiences. Let us explore three key reasons why empowering girls with financial knowledge and skills is crucial for their long-term financial well-being and overall upliftment.

Closing the Gender Wealth Gap

The gender wealth gap is real. Despite considerable progress in recent decades, women still face disparities in earnings, savings, and investment opportunities compared to their male counterparts. According to the International Labour Organization (ILO), the wage gap stands at around 20 per cent globally, meaning that women earn 80 cents for every dollar men earn for work of equal value. Furthermore, in 2021, roughly 37 per cent of the Jamaica Central Securities Depository (JCSD) account holders were women, indicating that men still held the majority (63 per cent) of accounts. In fact, at NCB Capital Markets Limited, we have observed that when broken down by gender, assets under management are less for women when compared to men. This could be a result of women earning less over their lifetimes, often due to factors such as the gender pay gap, career interruptions for caregiving responsibilities, and societal expectations. By equipping themselves with financial knowledge and skills from an early age, women can take proactive steps to overcome these challenges, build wealth, and secure their financial futures.

Financial Independence and Autonomy

Another crucial reason for girls to learn the art of finance early is to foster greater financial independence and autonomy. Financial independence empowers individuals to make choices that align with their values, goals, and aspirations, without being overly reliant on others for financial support. By gaining a deeper understanding of budgeting, saving, investing, and debt management early in life, women can take control of their financial destinies and shape their futures on their own terms. Whether it is pursuing higher education, starting a business, buying a home, retiring comfortably, or building generational wealth, financial literacy provides women with the tools and confidence to achieve their dreams independently. Additionally, financial independence can serve as a vital safety net in times of economic uncertainty or personal adversity, offering women the freedom and resilience to weather life’s challenges. Furthermore, empowering women to achieve financial independence is likely to have broader societal benefits, especially in Jamaica where around 40 per cent of households are headed by women. With improved financial stability, these mothers are better positioned to provide for and educate their children, while also passing on valuable financial knowledge.

Knowing the Fundamentals of Wealth

To set the stage for establishing financial autonomy and closing the wealth gap, it becomes imperative to introduce girls as early as possible to the nuances of money and finances. Teaching girls the fundamentals of wealth such as the value of saving and investing lays the foundation for financial stability and success.

By instilling the habit of saving from a young age, girls learn the importance of planning for the future and building a financial safety net. For example, a mother can pass on this lesson by involving her daughter in setting a savings goal for a specific item or experience she desires. Together, they can create a plan to save a portion of the daughter’s allowance or earnings each week until she reaches her goal. As the daughter sees her savings grow over time, she gains a sense of accomplishment and learns the rewards of patience and discipline. This practical example not only teaches the value of saving but also empowers the daughter to take control of her financial decisions and work towards achieving her goals. Through such hands-on experiences, girls develop lifelong money management skills that will serve them well in adulthood.

They also learn to understand and appreciate financial concepts such as the power of compounding and the benefits of delayed gratification. For many of us, we were first introduced to this topic in a maths class probably by a maths teacher we were not so fond of, resulting in the concept being overlooked as a life lesson. However, by appreciating how small investments can grow significantly over time, girls can appreciate the importance of starting to invest early and consistently. How can this lesson be imparted? For example, if a parent purchases units in a pooled fund, such as a unit trust, and encourages the child to contribute to the fund monthly from their allowance or from funds they earn for doing things around the home or for other family members, outside of their chores. Through this ongoing investment, the child can observe how the initial investment grows over time. This practical example not only highlights the power of compounding but also serves as a powerful experience to teach the value of delayed gratification. By emphasising the long-term benefits of saving and investing, parents can empower their daughters to resist impulsive spending and prioritise financial security and wealth accumulation in the future. Witnessing your money grow can and will have a profound impact on your mental outlook and increase your ability to resist impulsive spending. It reinforces a sense of achievement, discipline, and financial responsibility.

As we close out this year’s celebration of International Women’s History Month, let us all commit to instilling these values in girls from a young age. By doing so, we can help create a generation of financially literate and empowered women who are equipped to take charge of their financial futures, achieve their dreams, and contribute to closing the persistent gender wealth gap.