Early influences matter.
In one household, a girl grew up learning about money so she would become financially independent and have the freedom to live the way she wanted. In another household, a girl grew up being told absolutely nothing about finance.
Is it any surprise which of the two girls suffered from a serious financial setback in later years?
Here is a quote from the woman who grew up in the household where financial education was a priority:
"My parents were small business owners and they always told me that I needed to learn about finance and be independent. When I was 16 years old I started saving $50 a month and at 21 I hired my first investment adviser when I got my first job. When I was 30 I started buying stocks on my own but it didn't suit my personality. I would obsess about things like how fast you could lose money. These were distracting thoughts.
"Also as a busy mom I have no time for analysis so I found a very good female adviser who put together a long-term financial plan for me and who could be my trusted adviser. My husband and I live to a very strict budget. We manage our lifestyle to what we can afford and I save 10% to 15% of my income every year. The first thing I do in January is pay off my RRSP, TSFAs, RESPs and other investments first."
But the woman with the opposite kind of upbringing has a very different story:
"Growing up I didn't learn anything about finance. My parents were Vietnamese refugees, and they had nothing when they arrived to Canada and I was born. Juggling work to provide for the family was their priority and they had little time to teach us life lessons.
"In my early 20s I met a man in university, and I thought he was the love of my life. We moved in together, bought a car, furniture, and appliances ... all on credit. We graduated and got jobs but the relationship ended shortly after graduation. During our time together, we spiralled into debt and everything was under my name. He told me he would help but our communication ended when he started dating my friend. After our breakup, I had to file for personal bankruptcy. From there, I decided that I would always take care of myself.
"After five years of settling my consumer proposal obligations, it took me a year to rebuild my credit rating and I had to hold off on buying a house that I wanted. I felt so frustrated - how did I not know about this?"
From my research, I know many women won't even think about investing unless they have "perfect knowledge." Could it be that they don't even think about giving someone a money message for the same reason?
After years interviewing smart and successful women, I can tell you that some of the best pieces of advice they received are simple: "Don't spend beyond your means" and "it isn't about how much you earn, it is about how much you save."