For many parents, broaching the subject of money with their children can be a minefield. Even parents who want to teach their children about personal finances struggle to have those conversations. That’s especially true when their kids are young: In a recent survey by Edelman Financial Engines, 49% of parents with children aged 4 to 8 said they didn’t know how to talk to their kids about money. But about 90% of them felt it was important that their children have sound financial habits, and admitted that they should be the ones to impart those habits.
I spoke to a number of parents who have taken that to heart and are making the effort to talk to their children about money. For all of them, their approach is a departure from their parents’ attitude toward finances. Most of their parents tiptoed around the subject, whether they grew up in a working class or upper-middle-class family. “My dad managed the money, and I think my mom was on an allowance,” Katie*, a 56-year-old teacher based in Phoenix, told me. “It was kind of like the man worried about the money; this was a traditional Texas home. I don’t really remember my parents ever talking about it.”
Some of the people I heard from made poor financial choices early on because their financial literacy was so low. Leslie Forde, who works in publishing and runs a self-care site for moms, says that during her first year of college, she opened a credit card and swiped it too frequently. “I was really sloppy about financial management that first year until I ran into having to pay down debt,” she says. “I realized that you’re paying a real premium and interest when you use credit card debt. After that experience, I became kind of obsessive about learning about personal financial management and planning.” Bob Moul, who works in tech and now advises his employees on saving and investing, grew up in a working class family and had to give himself a crash course in personal finance, years into his marriage and well into raising children. “This has all been a process of painful discovery,” he says.
As they raise kids, these parents are trying to strike a balance, cultivating good financial habits and offering guidance without overloading their kids with the minutiae and weight of family finances.
Starting young
Kids establish spending habits by the age of 7, according to finance writer Beth Kobliner. That’s why parents like Forde—whose kids are 4 and 8, respectively—have already started conversations about money. “I’ve tried to introduce these more mechanical concepts that I was missing–the actual routines associated with managing money and tracking money,” she says. “And I try to introduce it in age-appropriate ways.” Over the summer, she took her kids into the bank for a “kid’s day” event, during which they transferred the contents of their piggy banks into bank accounts with interest. “When their statements come in, I show them how their money is increasing,” she says. “Granted, the interest rates are paltry. But I’m showing them that just by their money sitting at the bank and not in their piggy bank, it’s actually making them more money.”
Forde also talks to her kids often about the idea of making “trade-offs.” If her son wants new toys, for example, they calculate how much each costs while in the store, and talk about how he can swap out toys to stay within his budget. She uses a similar framework to talk to them about things like housing as well—why they live in a condo outside Boston when their cousins live in a two-story home in Florida, and what lifestyle changes they would have to make to afford a house like that. “I really try to explain, in terms they can understand, that there are trade-offs associated with what you want, and what you can have in the moment versus what you can have in the future,” she says.
Ben Carter, the cocreator and cohost of a podcast and show about personal finance, is already thinking about how to talk money with his kids, barely three months after becoming a parent to triplet girls. Carter, for his part, was acutely aware of finances from an early age. That awareness was self-initiated, he claims, not a function of how his parents talked about finances. “In my mind, my family didn’t have as much money as I thought you needed to feel comfortable,” he says. “That could have been a figment of my imagination. We had everything we needed. But I had this notion that, ‘Oh my gosh, we’re getting by day by day.’”
When it comes to his own children, Carter’s wife doesn’t want them to be as preoccupied with money as he was. “My wife doesn’t want our kids to grow up with an overwhelming sense of what money is, so for me it’s about trying to find a balance,” he says. “How can you teach it in a way that’s more casual and part of our day-to-day, week-to-week lives?” One example of that is talking about the cost of groceries, Carter says. “You’re learning these concepts that, as an adult, you’ll find are directly related to money,” he says.
With his first three children, Moul didn’t talk money until they were in their late teens, though he did expect them to do chores for an allowance and set them up with savings accounts. When he got remarried and had kids again, Moul was eager to start their financial education earlier. One of his priorities was to show them the power of compounding, and how they can have more in the bank simply by putting their money in the right place. “The main thing that I’m trying to get across–even to the younger employees I have–is the earlier you start, the better,” he says.
Teaching financial habits without the burden
Some parents are wary of talking money with their children because they fear making them feel like they need to worry about family finances.Simone Oppenheimer says of her parents, who were the children of immigrants, “I think that there’s kind of a trend in that first-generation Americans felt like they put a lot of burden on their parents, watching them work so hard and try to provide for large families. Our parents tried to shield us from that burden.” They projected financial security and didn’t expose their kids to financial struggles or limit their opportunities, Oppenheimer argues. When she attended a private college, Oppenheimer says, she didn’t fully grasp the cost of her education, and how much of a dent that put in her parents’ finances.
Though her kids are young (both below the age of 7), Oppenheimer seeks to familiarize them with financial realities, albeit without overloading them. “I went to a Jewish private school, and my kids do as well,” she says. “I’m much more transparent about the fact that they go to a school that costs money.” If her children ask why a friend has something that they don’t, she explains that she values certain things–their schooling, for example, or healthy food–and prioritizes putting money toward that. Oppenheimer has already seen her kids internalize some of those lessons. When she took her children to the grocery store recently, her son put part of his $5 allowance toward buying oranges and contributing to their groceries. (“I’m going to buy two oranges to help you,” he said.) “He’s realizing that it’s helpful, and money means something–and that mommy earns what we use,” Oppenheimer says. “He didn’t do it in a way that was guilty or that he should help me. He was proud of himself for his contribution.”
Oppenheimer has also tried to be cognizant of giving both her children the same financial education. Many parents make the mistake of encouraging their daughters to save and not take financial risks, while teaching their sons to invest and build wealth. Some even help normalize the workplace pay gap by modeling it in their own homes, paying daughters less than they do boys for comparable work–in this scenario, chores–or their allowance. “I have a boy and a girl, and it’s always really interesting to see the differences there,” she says. “I’m finding myself in my own biases and trying to push through that–and making sure that I’m raising two strong, independent kids equally.”
Relieving some of the burden of personal finances includes illustrating where you can afford to spend a little. That’s why Katie taught her kids about the three buckets of savings: long term, mid-range, and “fun right now.” (Her youngest child had dubbed his mid-range savings pile the “Taylor Swift fund” while saving up money for concert tickets; the name stuck, though his enthusiasm for the singer did not.) “We’ve tried to teach them that saving is really important, but you also have to live your life,” she says. “You’ve got to have that fun stuff, too.”
Planning for college
If there’s one reason to talk about money with your kids, it may well be this: As of last year, more than 44 million Americans are on the hook for more than $1.5 trillion in student loan debt. It’s no surprise that college–how to pay for it, whether to pay for it, what to expect of their children–is top of mind, even for parents of young kids. And in many cases, the choices parents make around paying for college have to do with how much financial support they received from their parents.
For Oppenheimer, whose parents footed the majority of her private college tuition, her experience and the changing job market convinced her that her children don’t need the kind of financial assistance she had. “I decided that I’m not opening a college savings account for my kids,” she says. “I don’t see the need to go to a private college in this day and age, for all that money, when college is not necessarily worth as much in terms of your future as it once was.” Oppenheimer adds that had she been expected to pay for college beyond a nominal loan she took out, she would have made different decisions. “I think at that age, it’s important for kids to start understanding the implications of their decisions,” she says. “I don’t see the harm in having kids start saving for college or paying for it themselves. Maybe they’ll make smarter decisions and be more serious students if that’s the case.”
As a teacher herself, Katie has a similar take. “As a teacher, I see these kids going to these really expensive colleges,” she says. “I think it’s a shame right now in our society that the expectation is that you’re going to assume these loans.” When it came to her children, Katie set aside a fixed amount of money to put toward college; she sat down with each of them and laid out their finances and how much their savings would cover in terms of tuition. “We’ve tried to be very transparent with them,” she says. “I’m very debt averse. I try to instill that in them.”
But some parents want to give their children the financial support they didn’t have growing up. “[My parents] made it very clear that there was no way they were going to pay or even help pay for college,” Moul says. “Of the four of us, three of us did not go to college after high school. My second oldest sister did, and I’m amazed to this day that she pulled that off.” He ended up covering tuition for all three of his older children, though he did expect them to work during college and foot expenses like textbooks. “I wanted them to have a college education for sure, and if I could do it for them, I wanted to pay,” he says. “I also felt like if they’re going to go to college, let them focus on learning.”
Forde hopes to do the same for her kids, though she also expects them to contribute financially in some way. Her parents emigrated from Barbados and things were “very comfortable” when she was growing up. But her family’s financial situation changed when she was a preteen, and she ended up putting herself through school for most of college. She doesn’t want that for her kids.
“I want my children to have the experience of moving through the world and choosing the career and path that they love and that’s right for them–not just choosing a path that’s financially viable,” she says. “I want them to have some freedom and choice and less stress, frankly, associated with the climb from their academic life into their professional life. I would like them to be less stressed out about it than I have been.”
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The number of women leading Fortune 500 companies in 2017 broke a record at 6.4%, or 32 women in the top spot at companies on the list. But when the 2018 list was released in May, that number toppled with just 4.8% of listed companies led by women.
“Women in the Workplace 2018,” a report McKinsey & Company and LeanIn.org found troubling data well before women reach the top. Women earn more bachelor’s degrees than men, and ask for promotions, negotiate compensation, and stay in the workforce at the same rates as men. But, they’re also less likely to be hired for manager roles and face a bigger gap when it comes to being promoted into manager roles. For every 100 men promoted to manager, just 79 women are. And the news is worse for women of color. “Most notably, for every 100 men promoted to manager, 60 black women are,” the report found. Largely because of these gender gaps, men end up holding 62% of manager positions, while women hold only 38%.
Find the right fit
Until companies improve their diversity efforts, women need to first seek out organizations committed to diversity and developing women as leaders, says Stacey Caywood, CEO of Wolters Kluwer Legal & Regulatory, a $1 billion global legal and compliance firm with roughly 3,500 employees.
“I think it’s really important for everyone, maybe in particular for women, to make sure that you’re really looking at an organization that has strong alignment with your own values,” she says.
Beyond finding the right environment to grow, women can be savvy about their own leadership development. Caywood and three other formidable women who landed the top spot at their companies weigh in with advice on becoming a top CEO candidate.
Grow strategically—and boldly
Good CEOs understand every aspect of a company’s operations, so your career trajectory will look more like a lattice than a straight line. You need to learn different functions, says Diane Dietz, president and CEO of Rodan & Fields, a $1 billion direct sales skincare and beauty products company with more than 700 employees.
Dietz herself is a good example. She held an executive role at grocery giant Safeway, overseeing all aspects of operations, and spent 18 years with Procter & Gamble, where she oversaw a turnaround of the Crest brand. Even with her vast experience, after Safeway was purchased by a private equity firm, she began looking for president roles before a mentor asked her why she was looking for “another number-two role.” That helped Dietz realize she was ready to think bigger.
“I think men sometimes are more willing to say, ‘Well, I’m gonna go for it.’ And sometimes they’re not even as qualified as the woman who is saying, ‘I’m not ready yet,’” she says.
Embrace risk
Taking the tough assignments—overseeing a struggling business line or managing an overseas assignment, for example—means you’re going to fail sometimes, too. But it’s important to own those failures and not sweep them under the rug, says Carol Lavin Bernick, former executive chairman of Alberto-Culver, which her family sold to Unilever in 2011 for $3.7 billion. Bernick is now CEO of Polished Nickel Capital Management, a private company with diversified holdings, and author of Gather as You Go: Sharing Lessons Learned Along the Way.
“Business is tough. Every business has issues and failures. If you can talk about what [standard operating procedures] you put in place to fix them, that’s big because you don’t want it to happen to others,” she says. Showing that you were able to move past such challenges and improve is an important skill for a CEO.
Raise your profile
Building a big network can help you immeasurably as you grow your career, says Dorothy “Dottie” Herman, CEO of Douglas Elliman Real Estate, the third-largest residential real estate brokerage in the country. When she was building her career, Herman took every opportunity she could to network with leaders. “I would pay out of pocket to fly across the country to be at an event if I knew that someone important would be there,” she says.
Don’t get lost in the crowd, she counsels. Make sure your senior leadership team knows who you are and how you’re contributing so they think of you when it’s time to plan promotions, she adds. You can’t be afraid to toot your own horn.
Caywood agrees. “If you have results to show, you should also gain the confidence to be able to showcase what you’ve done,” she says. “If you deliver or exceed the expectations [of] the team, you want to make sure that you are sharing that,” she says.
Be the boss people brag about
Another way to inspire faith in your leadership ability is to build a strong succession pipeline, Bernick says. Too many people overlook the importance of having strong successors in place at every level. You don’t want to end up in a situation where you’re so good in a role that you get stuck there because there’s no one to fill your shoes, she says. “Work on having at least two people who are superstars who could take your job,” she says.
And bond with your team, she adds. Be collegial. Don’t be afraid to share some personal details about your life. All in all, be a great boss. “When your team is bragging about your management style to other employees, that’s absolutely the best kind of validation, and I think people notice,” she says.
Find mentors who will push you
Each of the CEOs interviewed agreed that mentors were critical. Go beyond the established mentor programs in your company and seek out people who will push you, Dietz says. She again points to the mentor who encouraged her to think bigger than a president role. She encourages CEO-wannabes to find people who will say, “Do this. Try that. Push for this.”
Caywood says it’s also important to find “internal experts” who can give you counsel in specific areas or disciplines. Having people to whom you can turn with questions about an area you don’t know well is invaluable, she says.
Get board experience
Get to know what it’s like to oversee a CEO and the issues they face by getting board experience, too, Bernick counsels. Nonprofit boards and corporate boards can both provide relevant experience, as well as a peer group of corporate leaders who may prove to be valuable mentors and networking contacts, she says.
Reaching the CEO office doesn’t happen by accident. But by creating a long-term strategic plan that builds toward that outcome and selecting roles at companies that value women leaders, you can put yourself on a path toward that top spot.
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