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Women’s financial literacy doesn’t come from textbooks

The most effective way women learn about finances isn't through textbooks or lectures but through real stories from real people, says chartered financial analyst Barbara Stewart.

The Toronto financial-counselling and portfolio-management specialist recently released a white paper called Rich Thinking: A Global Study — A Guide to Building Financial Confidence in Girls and Women.

Her research took her around the globe to talk to successful women of all different ages and occupations. They all said they gained financial literacy by gleaning insight from family members, friends, and mentors. And that kind of real-life experience has helped them build financial confidence and independence.

"If you're not interested in financial tables or charts or all that dry information on websites of banks, you probably won't have the desire to educate yourself or learn more about it," Stewart says. "These women are saying they're being taught through stories and life lessons. Having worked in the industry for a long time, I really believe we don't pay enough attention to the way women learn."

For her Rich Thinking study, Stewart conducted 50 one-hour interviews with women from Beijing to Stockholm from diverse fields including law, communications, human resources, finance, marketing, architecture, and the arts.

Stewart asked them each three questions: 1) When you were growing up, do you remember anyone acting as your role model when it came to money? 2) Do you recall any pivotal moments that shaped who you have become in terms of your confidence in taking care of money/life matters? 3) What would you advise the next generation of girls/young women regarding money?

"I really delved into the 'what we want' piece — you need to be clear on that and do a lot of work on what your values are and what kind of lifestyle you want," Stewart says. "When you figure out what you want, you can align your financial values around that.

Passing on wisdom

"Young people are educated in many ways but they are usually given relatively little help in understanding how a fulfilling life develops."

Stewart distilled her research into 10 key tips for women wanting financial independence.

1. Determine the lifestyle you want.
What type of house do you want to live in? Where do you want to live? How much do you need to make to live there? What type of people do you want to work with? Figure out what you really want out of life because you become what you think about.

2. Plan and be persistent.
If you look back at how a person became successful, there was almost always a well-thought out plan she followed with tenacity. Understand clearly that what you want costs money. Determine what is important to you then set realistic goals to make it happen.

3. Get smart.
Cultivating intelligence is one of the most important things people can do to ensure happiness and financial success in life. Education builds people's confidence to make decisions, to face life, and to accept successes and failures. Once you get an education, no one can take it away from you.

4. Start work at an early age.
Evidence suggests that starting work young can boost self-confidence. Whether your first job is pumping gas, bagging groceries, filing, or bussing restaurant tables, the discipline of work trains the mind to focus. A first paycheque is also a great motivator, as you learn the link between work and money.

5. Get paid for what you do.
The onus is on you to do some research and find out the value of your contribution to the marketplace. From there, ask for this amount and do not settle for less. Whether you are an engineer or an artist, value your own work, talent, and efforts.

6. Have faith in yourself and your dreams.
Follow what truly resonates in you. What and whom do you admire? Align your personal and financial decisions with your values.

7. Be independent.
Being free to come and go as you please is made much easier by having your own money. Handle money and financial transactions yourself.

8. Seize opportunities.
A lifetime of preparation, study, and hard work will likely feel wasted if not put to good use. Stay alert. Be ready when opportunities present themselves and be open to them.

9. Respect money but do not let it define you.
Too much focus on money is not a good thing. Make sure to read the news, travel, have some context for your place in the world. You don't develop your identity through the process of amassing wealth.

10. Know when to ask for help.
Have the courage to acknowledge what you're good at and seek out the advice of experts when needed. Whether you need personal or financial advice, look for someone you admire and ask them for help.