Parents are failing to educate their young daughters about money and putting them at greater risk of financial harm as a result, new Australian research has found.

In a report entitled Financial autonomy among emerging adults in Australia, researchers at the Melbourne Institute found that young women on average have lower levels of financial autonomy than young men while living at home.

The researchers believe this is because parents offer their daughters fewer opportunities to help with household finances in the final years before they leave the nest.

The report, which analysed data from the Household, Income and Labour Dynamics in Australia (HILDA) survey, also found the financial autonomy gap widens with age, with women’s financial literacy developing slower than men’s.

“If young women are not gaining experience in financial decision-making while living at home … these young women are likely to fare poorer in their initial financial decisions, which could have many negative far-reaching and long-term financial implications,” the report authors write.

“Potentially this could manifest itself with poorer choices with respect to high-interest borrowing, responsible credit-card purchasing, and financial planning.”

The report assessed children’s role in household decision-making for day-to-day spending, savings and investments and large purchases.

Financial advisers say allowing children to make mistakes with money can teach valuable lessons. Photo: Getty

Generations of unconscious bias

Women with Cents founder Natasha Janssens told The New Daily it’s unlikely parents deliberately exclude their daughters from important money decisions.

Rather, she said, it reflected an “unconscious bias” passed down through the generations.

“Because, traditionally, earning an income was the male responsibility, our parents, grandparents and great-grandparents didn’t tend to talk to women about financial matters,” Ms Janssens said.

“If our kids see mum is usually the one staying at home, going shopping or looking after everyone, and dad is the one ‘bringing home the bacon’ or paying the bills, they are more likely to replicate them in adulthood.”

But Ms Jenssens said parents can help bridge the gap by introducing their daughters to concepts – like compounding interest, savings and delayed gratification – through everyday situations.

For example, parents can give their daughters the option of agreeing to either buy takeaway pizza or head to the movies on a Friday night, to help them weigh up the opportunity cost of financial decisions.

And have them work for what they want – money today is invisible and it is easy for kids to view our bank cards as this magic key that unlocks every store and video game,” Ms Jenssens said.

It pays to make some mistakes

Multiforte director and advisor Kate McCallum told The New Daily two of the biggest mistakes parents make when talking to children in general,  and daughters in particular, about finances are:

• Not allowing them to make small blunders
• Speaking from personal experience – rather than directing their children to reputable financial advice and educational tools.

Ms McCallum said allowing children to spend birthday money on a toy they might regret, or letting them lose a tiny investment, helps ingrain financial stability over the long haul.

“If your child makes a mistake, you shouldn’t take over – and if things do go belly-up, you shouldn’t help them by instantly paying them back the money, but help them get a better education, as they should learn to be accountable with their decisions,” Ms McCallum said.

“If the parents drive the decision, the kids won’t learn and it won’t help improve their comfort level with engaging with financial decisions.”

Ms McCallum noted that resources such as ASIC’s MoneySmart website are also good starting points for discussions on how to use newer technologies safely.