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Podcast 100: National Financial Capability Challenge

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Today’s guest on the Consumerism Commentary Podcast is Carrie Schwab-Pomerantz, President of The Charles Schwab Foundation, which is sponsoring the National Financial Capability Challenge as well as the Make Change Count program.

Consumerism Commentary Podcast #100
National Financial Capability Challenge: S04E22 / 124

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Table of contents

[00:00] Introduction from Bryan J Busch
[00:38] Interview with Carrie Schwab-Pomerantz
[00:52] About the National Financial Capability Challenge
[01:57] What do educators need to know to help students pass the test?
[02:35] Why the challenge exists
[03:18] Winning prizes for passing the test
[03:49] Who is allowed and encouraged to participate?
[04:18] The Charles Schwab Foundation’s history with the challenge
[05:19] Which teachers are supposed to work with their students on the test?
[07:15] More resources at Schwab MoneyWise.
[07:46] About the Make Change Count Teen Pledge and its four tenets
[09:58] Previous successes with the partnership with the Boys & Girls Clubs of America.
[11:59] The Schwab Foundation’s efforts at financial coaching
[12:50] Young people really do want to learn about managing money
[13:59] End

We always welcome feedback from listeners. If you have any comments for this episode or for any other, or if you have suggestions for future episodes, please leave us comments here or email us at podcast at this domain name.

Theme music by Mindcube.

Full transcript

Bryan J Busch: On today’s episode of the Consumerism Commentary Podcast we talk about the National Financial Capability Challenge and how to make change count.


Bryan: Welcome back to the Consumerism Commentary Podcast. I’m Bryan J Busch. My guest today is Carrie Schwab-Pomerantz, President of the Charles Schwab Foundation, which provides education, volunteerism and advocacy toward lifelong financial well being. Thank you for joining us the Consumerism Commentary Podcast.

Carrie: Thank you for having me.

Bryan: Your foundation is sponsoring the National Financial Capability Challenge. Tell me about what that is.

Carrie: The National Financial Capability Challenge is a test. It’s administered by teachers to test the financial savvy of high school students nationwide and it’s sponsored and administered by the US Department of Treasury. It’s a 40 question online test and the whole idea is really to encourage teachers to teach kids financial literacy and financial basics and also to get kids excited about the whole topic.

The actual test is available between March 7th and April 8th. So, we really want to encourage teachers and parents who teach their kids at home to go onto Challenge.Treas.Gov and have your teenagers take the test and there is an educator tool kit for teachers as a resource to help your kids get prepared.

Bryan: Tell me about some of the things that are in the educator tool kit. I imagine all of the information in there is going to help you pass the online test.

Carrie: Yeah. It’s a tool kit that was designed by leading experts in financial education and it’s ready made material for a teacher to teach the kids the basic skills. There are topics such as earning and income, spending wisely, also saving and investing, borrowing, credit cards, which is a big deal today and then protecting your money.

Bryan: Did this idea come about because we found out that high school students are currently ill prepared to deal with financial matters?

Carrie: Well, all of America really has been ill prepared for financial matters and the last couple of years has really brought this to the attention of all of us as an issue really to the strength of America and really the best way that we can change this course is to give the kids basic knowledge, so that when they do go into college or go into the work place that they have the tools to live within their means and beginning to save and have sort of a financially healthy life.

Bryan: That’s great. Now, are there potential prizes for passing the test?

Carrie: Yeah. The Charles Schwab Foundation is sponsoring 25 $1,000 scholarships for the top winners of the challenge. We also are giving another $1,000 grant to the teachers of the schools in which these winners have come from really as a way to promote and thank them to continue to teach kids the basic of financial education.

Bryan: Who is allowed to participate? Just any high school student in America?

Carrie: The challenge is available to all high school kids, but it has to be administered by an adult. So, it’s available to all teachers and schools across America; for public schools, private schools. It’s also available to parents who home school their kids and again, you want to go to Challenge.Treas.Gov.

Bryan: Okay. I saw that this is the fourth year that this program has been going on. Has your foundation been involved the whole time?

Carrie: Yeah. We’ve been very involved. My father was the Chair of the President’s Advisory Council on Financial Literacy and so, Schwab has been sponsoring the challenge since the beginning days. In fact, we’ve had about 200,000 kids go through the program and now I am serving on the Council myself, both on the Youth Committee and the Partnership Committee, again to help Americans become more financially literate and to bring the public/private sectors together to really make a change in this country.

The Charles Schwab Company has always been about helping Americans become financially fit and we do it not only with our clients every day, but also our foundation has been extremely focused on helping Americans, primarily from underserved populations to get the skills to, again, have a healthier financial life.

Bryan: Are teachers of certain subjects being encouraged more than others to work on this with their students? I remember not having any kind of economic education in high school. I think we had one home economics class in seventh grade, but we really didn’t talk about checking or credit cards or anything like that.

Carrie: There are about nine states in the United States that require personal finance as a subject for graduation, but the bottom line is because it’s a state by state decision on whether to teach it, it comes in all forms. So, there’s no particular teacher that’s encouraged; however, the most obvious teachers who are probably in a better position to teach it without a lot of training is an economics teacher or a math teacher, but I have to tell you there’s this one teacher in Florida who had – I guess it was last year – and she had probably like three or four kids get perfect scores on the exam and I’ll tell you.

I took a look at the exam and it is very hard and I’ve been in the business for 30 years. Very hard test and what we found out from this teacher is that she’s teaching it before school even begins. Sort of like driver’s ed was before school started and she’s finding that this demand is more than what she has seats available to teach these kids.

So, what we’re finding is that kids really do want to learn and it’s just really up to the teacher who’s inspired to do so.

Bryan: I was looking at some of the example questions and one of them was about the fact both the employer and the employee make contributions to Social Security. I don’t think I learned that until two years ago. One of them was about car insurance, which I didn’t get the right answer to.

Carrie: There you go and it’s a hard test, but it’s important for all of us to know and I think the earlier we know, the less likely we’re going to get into trouble like some people did a few years ago.

In addition to the Department of Treasury’s educator took kit for teachers to help their kids develop the personal finance knowledge; we also have a resource at It’s available for teachers, students and parents to help them find the details about the scholarship awards, additional tips, tools and resources for teaching the ABC’s of personal finance.

So, that’s another resource for adults to help the next generation.

Bryan: Now, this isn’t the only program that you’re currently involved in. There’s also a thing called the Make Change Count Team Pledge. Can you tell me about that?

Carrie: We have a national partnership with the Boys and Girls Club of America where we created an after school financial education program for their four million kids and in fact, we’ve had probably at least 300,000 kids go through the program. We felt that we’ve had such success in changing the mindset of these young kids in terms of starting to open up savings accounts and starting to save and really think about college within their sight, which for some of these kids, it just never would be an option.

We wanted to take this beyond the Boys and Girls Club and create sort of a movement among teenage kids to really make a commitment to themselves and to their families to have better financial skills and behaviors.

So, we created this Make Change Count Challenge in which we’ve asked kids to go to the and commit to four personal steps. The four steps that we have asked them to commit to are save their money, so in other words, if they don’t already have a savings account and aren’t saving, to start doing so. Spend wisely, again what we found in America, adults and children, that we’ve been living beyond our means. So, we’re trying to encourage kids to think about their needs versus their wants before spending on anything that comes their way.

The third area that we’re asking them to commit to is planning for college and what we’re asking them is to explore the opportunities of paying for college because there are a lot of ways to do that and they can start right now and then lastly sharing what they know. We want kids to encourage their friends and their families to really start thinking about the basics of their finances and commit also to saving and spending wisely.

So, again, we’re trying to create a sort of movement, more awareness around the need for good financial habits.

Bryan: How has the success of either of these programs been measured so far? In addition to I think you mentioned opening savings accounts has gone up.

Carrie: Yes. We don’t have metrics necessarily for Make Change Count, the pledge for teenagers yet. I know we’ve got thousands of kids that have taken the pledge, but of course we’d like to see hundreds of thousands of kids make the pledge. In terms of the Boys and Girls Club Program that I mentioned, we’ve had such success in terms of where we’ve actually looked at kids change, whether they’ve changed their behaviors due to the financial education program and we did find those kids who go through the program are starting to track their spending.

They’re opening up savings accounts, which by the way, there’s millions of Americans who are unbanked, particular in the underserved populations and being banked or having a relationship with a bank is really the first step to getting into our economic system and the chances for better opportunities financially.

We’ve also found that kids are opening checking accounts and they’re actually exploring ways to get to college and we have a lot of anecdotal stories of kids who never thought they could ever afford college and they start saving a little bit of their after school money and sure enough they have maybe $5,000 within two years saved to go toward college.

Bryan: It must be awfully tempting for a young person to want to spend that.

Carrie: It’s very tempting, but I think when they see how money can -– just putting a little away at a time and making it so it’s painless in a sense and for forgetting about it how fast it can grow. These kids are teaching their parents too. Again, a lot of stories we hear through Boys and Girls Clubs. Kids that are sharing what they learn with their parents and getting them excited about opening up retirement accounts and saving for themselves.

Bryan: What other sorts of things is the foundation working on?

Carrie: The national partnership with the Boys and Girls Clubs has been something we’ve been focused on for about seven or eight years and it’s a very integrated program in terms of not only giving these kids financial education, but providing scholarship opportunities as well.

We also have some regional partnerships with some organizations in San Francisco, Indianapolis and Austin in which we’re helping the more underserved population with what we call financial coaching, where our employees – similar to Boys and Girls Club – are volunteering and they’re actually sitting down with people to go over their budget and attract their spending and look for ways to save and build assets.

Bryan: I have to tell you I really could have used some of this when I was in school.

Carrie: We all could. I think like you mentioned, we took home economics and we learned how to sew a button or I guess shop, auto shop and so forth, but none of us learned how to budget and what I’ve found from our research – we do a fair amount of research on teenagers and actually 20 something year olds and they all say that they really want to learn about money and managing money and investing.

I think that a lot of adults think that these kids will think it’s boring, but that’s absolutely not the case. They really want to learn and I think we need to look for different ways to do that. By having families talk about the basics of money management, having the schools more involved and that’s what’s so great about the challenge. The challenge is more – it’s not a mandate for states to do it. It’s really an encouragement and it’s a sense of fun. So, hopefully we’ll create more awareness around schools as well and to sign up for the exam, you want to go to Challenge.Treas.Gov.

Bryan: That’s wonderful. Thank you again for joining us on the podcast today.

Carrie: Thanks Bryan. It’s been a pleasure.

Bryan: Join us again next week for more great personal financial advice and information.

Updated May 3, 2011 and originally published March 20, 2011.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 7 comments… read them below or add one }

avatar 1 Anonymous

99 and 100 not showing up in itunes.
Congrats on 100!

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avatar 2 Luke Landes

Thanks, Art! I think we may have the iTunes problem sorted out. You should see the podcasts appear in iTunes shortly.

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avatar 3 skylog

i love this topic this week. it is great to hear that high school students are getting a chance to learn some personal finance in schools. only good things can come from this. i personally believe the country as a whole would be in a much better spot if more people had some basic understanding of even just a few personal finance concepts.

CONGRATS on getting to 100 flexo!

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avatar 4 Cejay

I love this idea/ I have nieces and nephews that graduated from college and cannot balance a checkbook. This is their personal checkbook with no expenses just their spending money. They need more education.

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avatar 5 wylerassociate

good podcast and I applaud groups like the Charles Schwab foundation who are trying to improve the financial literacy of american high school students.

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avatar 6 4hendricks

Thank goodness someone is finally addressing this problem. Kids need to know what retirement plans are, why they need to contribute to one, how to balance a checkbook, how to budget, save money, pick insurance – the list goes on and on. I struggled for awhile after leaving my parents house at 17, but I see my friends kids who have grad from college up to their eyeballs in money problems. What do you mean I have to pay my credit card bill, and my rent, and my cell phone bill, and my car payment –

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avatar 7 sarahlee9

I have actually met young adults who do not know how to even fill out a check or balance a checkbook let alone start any retiremnt for themselves. so many children are handed tings these days. Children need to know the finacialasspects of life not just the names visa and mastercard .

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