How financial literacy can help solve our biggest social issues

April 15, 2021
Carrie Schwab-Pomerantz highlights the importance of financial literacy today and why she sees her recent appointment as board chair for Boys & Girls Clubs of America as an important blueprint to propel change in other areas.

Carrie Schwab-Pomerantz, president of Charles Schwab Foundation, senior vice president of Charles Schwab & Co., and board chair of Boys & Girls Clubs of America discusses financial literacy as a survival skill and how greater access to financial education can help lift people and communities.


You were recently appointed board chair for Boys & Girls Clubs of America. What do you hope to accomplish in the role?

I’ve worked with Boys & Girls Clubs of America (BGCA) for nearly two decades, and I’ve seen firsthand the impact its programs can have on a child’s life. One reason Charles Schwab Foundation decided to partner with BGCA was that it touches nearly every aspect of a child’s development, from financial literacy and health and wellness programs to workforce readiness and leadership development.

Of the work Schwab and BGCA have done together, I’m particularly proud of the Money Matters: Make It Count program, a suite of financial education resources for teens that we launched in 2003. Since then, it has reached more than one million teens, including many from underserved communities.

One important topic I want to focus on in my new role is ensuring that our teens and young adults are ready to join the workforce and have the skills they need to succeed. BGCA plays a significant role in teaching America’s youth critical life skills, which contributes to their job opportunities, economic mobility, and quality of life. I hope the learnings from BGCA can serve as a blueprint for propelling change in other areas.

You’ve been a lifelong advocate for financial literacy. Why does it matter?

Many people don’t realize that the lack of financial literacy cuts across Americans from all walks of life, and it has real consequences, from limiting access to college, housing, and good jobs, to causing stress and anxiety. Lack of financial literacy contributes to bigger social issues, including poverty, a growing wealth gap, and racial inequity. Ultimately, it’s weakening our economy and our communities.

Studies show that when people are financially literate, they’re more likely to go to college, have higher credit scores, and perform better in their jobs. They also have a greater ability to manage financial shocks that can derail goals and disrupt a sense of well-being.

Through Charles Schwab Foundation, we are committed to doing our part to make financial education more accessible to more people. We believe it’s our responsibility to leverage our leadership, our partners, and our collective resources to make sure every American has the financial know-how to achieve their hopes and dreams in life.

The COVID-19 pandemic has had a financial impact on many Americans. Has that changed how people think about financial literacy?

COVID-19 began as a health crisis but quickly became an economic crisis, too, exposing just how financially vulnerable most Americans are.

A 2020 Charles Schwab Financial Literacy Survey showed that nearly all Americans (89%) agree that lack of financial education contributes to a number of the biggest social issues our country faces, such as  poverty (58%), lack of job opportunities (53%), unemployment (53%), and wealth inequality (52%).

This pandemic has been a wake-up call for a lot of people, especially those who live paycheck-to-paycheck. Half (50%) of all Americans would experience financial hardship if they had to cover an emergency expense of $1,000 or less in the next 30 days, according to our research. That means half of our country is teetering on the edge of financial despair.

As a result, most see greater value in personal finance. When asked what they would teach their younger selves based on what they know today, Americans named the value of saving money (59%), basic money management (52%), and how to set financial goals and work toward them (51%) among the top responses.

Schwab Moneywise offers education resources, calculators, worksheets, and other tools to help people budget, save, invest, and achieve their life goals.

How can we inspire our children to be better and smarter about finances?

I always say financial security starts with a conversation at home. Research shows money behaviors are set by age 7. Exposing kids to money at an early age helps to demystify it.

Little girl writing in a notebook

It’s also important to talk to children – boys and girls – about money equally. Research shows that parents tend to talk to girls about household finances, like saving and budgeting, and to boys about wealth-building concepts, like investing and borrowing, which means our daughters are leaving home without the knowledge they need to be financially secure.

When my kids turned 16, I had each of them an open an IRA so they started saving and investing early. I insisted that they go to the branch office and fill out the forms themselves so they would become comfortable handling money matters.

What's the best life advice you've ever received?

It may sound odd, but the most inspiring life advice I’ve received is to not always follow advice. Never let anyone discourage you from pursuing something you love.

I learned this lesson when I was an undergraduate at the University of California-Berkeley and was trying to zero in on my major. I liked math, especially statistics, and wanted to pursue it more. All that ended abruptly when the dean said something to the effect of “don’t major in statistics; you don’t have the grades. Try something less demanding.”

I don’t know if he was right or wrong about my abilities, but I definitely know that he was wrong to discourage me from finding out. So, don’t let anyone discourage your curiosity. Listen to yourself!


For more from Carrie, follow her on Twitter and LinkedIn, and read her personal finance advice column Ask Carrie.