Friday, July 11, 2008

Teaching Your Girls About Money

Five years ago, Life Prep for Homeschooled Teenagers was first published, and since then I’ve gotten many email messages from readers who used the curriculum with their kids and were pleased with it.

Sadly, I’ve also been asked why I chose to include girls in my target audience for the book.

Now, I realize that many homeschoolers are even more conservative than I am, enough so that they plan to keep their daughters at home until and unless they marry. But to keep them in the dark about financial matters seems so misguided to me.

In the past, many women were uninformed about their finances. Men kept track of the money, and their wives kept track of the cooking and cleaning. But if their husbands died before they did (which is statistically more likely to happen), they often found themselves wondering if they were rich widows or poor widows, because they didn’t know. They had to rely on other male family members to help them find the paperwork needed for probate and figure out where they stood financially.

Unfortunately, marriages also break up, and women who are unaware of financial matters can find themselves left with children to support and no idea of how to prudently handle the income they now need to bring in. The pain of an unwanted divorce is thus compounded by the need to learn about money. It’s hard to learn something new when you’re emotionally distraught.

My grandmother raised four children as a single mom during the Great Depression, and the stories my dad told me about what she went through made it clear to me that girls need to know about finances every bit as much as boys do.

Recently, I was reminded yet again of that when I read this article about women who find themselves losing their homes because they were not knowledgeable about the mortgages they applied for when they bought them. The combination of ignorant consumers and greedy mortgage companies has resulted in some single moms also losing thousands of dollars that they really can’t afford to lose.

In the stories quoted in the article, the women now losing their homes didn’t understand that buying a home without putting any money down is a warning sign that you’re going into a loan with some danger zones. They saw it as a lucky break, when it was anything but that. It usually means that you have an adjustable loan, and in the current climate, your house payment will continue to rise, even if the value of your house does not rise (or worse, drops.) You are responsible for the amount of money borrowed to buy the house no matter what the house is now worth.

Even if her loan did not have an adjustable rate, the first woman seemed like a great candidate for a house because of her income level. She also thought she was making a good purchase because she didn’t borrow as much as she was approved to borrow. Big mistake! Pneumonia and then a broken wrist made her miss work, and she was forced to spend what cash she had paying bills. But she ran out of money, and could no longer make her mortgage payments. She not only lost her house but ended up owing the bank $32,000.

These women were also apparently unaware of how stressful it can be to have a huge house payment when you’re the head of a single income family. Had they been taught about financial freedom and the joy of being debt-free, they might have never become homeowners, but they wouldn’t have lost their homes, either. When you look at everything through the mindset of minimizing debt, you have more control over your financial situation, especially as the years go by and the good habits you’ve developed bear fruit.

Reading the sad stories about those women has reminded me yet again how important it is that we educate our girls as well as our boys about how to handle money and how to aim for financial freedom. Judging by what’s going on in our economy right now, this kind of education is more important than ever. We homeschooling parents have the time and the opportunity to do it right.


Brumbemom said...

Hey, it is so awesome that you would write this now. I have been thinking alot lately about the woman's role. I recently heard someone talking about how the woman's role is to be a helpmeet and nothing else. I know my oldest seems to be very career minded and I don't think it is appropriate for me to only let her study "home ec" or something like that. I think being a mom and wife is my calling, but does that mean that it is everybody's?
Thanks for the post.

Janet said...

YES, YES, YES!!!!!!! Girls need to know this stuff too! DEFINITELY!!!!!!!!!!I don't care if my girls stay home and look after kids their whole lives, it is ALWAYS important for a woman to know finances!!!!!!!!!!!!!!!!!!!!!!!!!!!

Polly said...

I totally agree. And I must add that my husband, who trusts me implicitly, basically allows me to pay the bills and create our budget. He may line-item veto things or say "actually let's do this" and if he does that, we'll do it, but in general he thinks it's great that I handle our finances--it's one less thing for him to worry about. To be honest, as an attorney I am more knowledgeable than he is on many financial matters {he's an engineer} though we are both VERY frugal. I do a lot of reading and research on this topic, and implement our budget, and he LOVES it.

Was the Proverbs 31 woman in the dark about financial matters? I think not! She's buying fields, planting a vineyard w/ the profits, making sure her trade is profitable, watching over the affairs of the household.

girls absolutely need to know this.

Melissa Markham said...

My mom was the one in charge of the checkbook, paying the bills, keeping a budget. I never will forget when Dad took me to the dentist (I was a teenager) and I had to show him how to fill out the check. Mom always had cash out for him to use.

But, even with all of that, mom ran into problems when they divorced after 25 years of marriage. She had always signed everything Mrs. John W. Orndorff. She had no credit in her name whatsoever and at the age of 45 had to start building it. So when women are getting credit cards, they need to make sure they put it in their names. Sheila L. Orndorff and their social security number, else they may go through the same difficulties later due to divorce or death.

On lighter note: I am having a book giveaway. Come check it out!

BarbaraLee said...

Ladies shouldn't be left in the dark about money. There might be a time like you said that they need to take over. Even a hubby illness. In my case dh doesn't want to do the books. Not to much just the value of a dollar. I girls don't know what that means how can we expect them to be wise.?

Barbara Frank said...

Brumbemom, your dd is fortunate to have a mom like you :)

Janet, I agree, they need to know about money no matter what they do with their lives.

Polly, I'm also the money person for our family. Dh never had the time or the interest, but I did. I often review things with him so he'd know where everything is if something happened to me.

Melissa, that's a really important point about women establishing credit in their own names, not their husband's.

BarbaraLee, as Polly mentioned re: Proverbs 31, the wise woman knows how to handle money.

Thanks, everyone, for the thoughtful comments!

Angela said...

Bravo! I also think many folks overlook that fact that not all men have been taught how to handle money properly, nor are all capable of making wise choices. While sometimes a struggle, working together on money decisions where both partners have a voice can often save lots of financial woes in the future!

Barbara Frank said...

Oh yes, Angela! If we can just take the time to teach all of our kids about financial freedom, they'll have a better chance for strong marriages where husband and wife work together on their finances. Great point!