Are We Heading Back To The 50's?

My mother and grandmother

If there's a silver lining in the Great Recession (and the loss of so many higher paying jobs and the nearly 16% unemployment/underemployment rate among recent college graduates) it's that we may be heading back to the 50's. A time when less was more. Where one parent stayed home and the other brought home the bacon. Because there just might not be enough good jobs to go around anymore.

Mom in her garden in our backyard

Research from the 1950's showed that people were not just happy, they were very happy. (Check out Top 10 Reasons Life Was Better In the Fifties - http://listverse.com/2013/02/27/top-10-reasons-life-was-better-in-the-fifties/.) 

One significant difference between now and the 1950's is that today more women than men graduate from college. So it's not that far-fetched that it will be the women who work outside the home. Unfortunately, I have the feeling that women will also wind up doing most of the cooking and cleaning. Even so, it could be such a nice change for children to have one parent home after school to help with homework, orchestrate play dates, schlep kids to and from activities. Family life must be significantly less stressful when you don't need to rely on daycare or nannies. And according to Elizabeth Warren, we'll have more spending money if we go back to having just one-parent work outside the home.

"The Two-Income Trap: Why Middle-Class Parents are Going Broke" was written by Elizabeth Warren along with her daughter, Amelia Warren Tyagi. One of the most eye-opening statistics in the book is that a two-income family earns 75% more money than its single-income counterpart from a generation ago, but they actually have 25% less discretionary income to cover living expenses. And it's not because of overconsumption. The book noted that two-income families are twice as likely to face financial hardship since either parent could have a medical setback or lose their job. At least in the case of a one-parent working family the other parent could step up and hopefully find employment that could help support the family. This is a great book and I highly recommend it to anyone who wants to learn more about the underlying research.

One key to replicating the financial stability of the 50's is that we really do need to scale back our expectations. We need to spend less and save more. This was easier in the 50's when credit cards barely existed. Living large back then was going to a movie for twenty-five cents. Now it costs closer to $10 and that's without any snacks. A cup of coffee in the 1950's cost around five cents. Today, a latte from Starbucks costs around five dollars. A smaller home was the norm for most families. Now it's unthinkable for a family to live in a 983 sq. ft. home. But think about how much money can be saved on taxes and utilities if we downsized? People are having fewer children now so it's not such a terrible idea to think small.

Another book worth reading is by Sheryl Sandberg and Nell Scovell called "Lean In: Women, Work, and the Will to Lead." The authors encourage women not to leave the workforce just because they have children. One theme in the book is that women are needed in leadership roles because we offer a valuable and much needed perspective in the workplace and in government. So true. It's kind of interesting to note that you can't find a woman named in any Top 20 List of Dictators in the world. In fact, I can't think of any woman who was ever considered a Dictator. (I know, men around the world are rolling their eyes, my husband included.) It makes you kind of wonder how the war in Afghanistan would have gone if we just armed their women. Maybe world peace would have a chance if women around the world ran the show. Anyway, as much as I agree with Sheryl Sandberg, I'm still of the mindset that to each her own when it comes to career vs. family. We don't need anyone heaping guilt on us for our choices. And that's actually a sentiment Ms. Sandberg expressed in her book.

In my perfect world, I love the idea of having it all. Capable women leading a peaceful world along with access to great part-time jobs where the hours happen to coincide with school hours. Corporate America, take note. There is an enormous untapped talent pool of super bright moms (and dads) capable of contributing to your profitability if the hours are family friendly. A happy employee is an outstanding employee. And while world peace seems so elusive (and off topic) we shouldn't give up.

At the end of the day, all I know is that the world as we know it is changing. I'd like to think it's ultimately going to be for the better. And maybe the challenging economy and questionable job market is going to lead us down a path that turns out to be ok. And I really do love the idea of women taking on leadership roles. Maybe we'll actually see a woman become President of the United States during my lifetime. I hope so.

What do you think?

Alice

Taking a margarita break from cooking and cleaning with my sister, Gay Wood-Albrecht

Borrowing for Consumer Spending is a Good Thing?

As reported in yesterday's Wall Street Journal, "Consumers revved up their borrowing in April, with growth in credit card debt accelerating at the fastest pace in more than a dozen years....The sizable climb is an encouraging sign for the economy, suggesting that consumers are confident enough to boost purchases by borrowing." If this is supposed to be good news then why does my stomach hurt? Sure, consumer spending can be great for our economy. Our purchases help employ a whole lot of people. It's not the concept of spending that's making me feel ill, it's the suggestion that consumers "borrowing" money to fund their purchases is seen as a positive sign. It's not. Racking up more credit card debt to fuel consumer spending is a terrible idea. Einstein's definition of insanity is doing the same thing and expecting a different result. We shouldn't have an economy built on the backs of people who can't afford it.

What do you think?

Alice

What Does Weight Have To Do With Money?

December 1999

December 2000

Ok, unless you're blind (or too nice to say anything) you probably noticed that I gained a lot of weight between the time these two pictures were taken. But what you can't see is that I also lost of ton of money. What could one possibly have to do with the other? And could there be a correlation between our country's skyrocketing debt and obesity rates, and our plummeting personal savings rate? 

Actually there is. Check out the following graphs and you'll see what I'm talking about.

I started to wonder about the correlation between debt, weight, and savings rates back in 2006 when I was working on my first book, "Wealth Watchers - The Savings of a Nation." Hard to believe that going into the 1950's consumer debt was barely measurable. Today it stands at more than Three Trillion (yes...Trillion with a capital T!) Dollars, and that figure doesn't include mortgages. In the early 90's our country's obesity rate was close to 10%. Today more than 34% of our adult population is obese. Our country also had a long stretch of time when the personal savings rate was close to 10%. We had a somewhat reasonable safety net if something went wrong. But no more. Our personal savings rate has been next to nothing. What happened?!

My first book signing! At Anderson's Bookshop in Naperville, IL 2006

My guess back in 2006 was that millions of people in our country were simply making bad choices, including me. But I had a great excuse. I suffered a brain injury in March of 2000 and lost much of my income and a lot of my common sense. To make matters worse, something happened to my metabolism. I went from being one of those lucky people who was always thin, to gaining so much weight that overalls became my go-to outfit. Anna Wintour would have been rolling in her grave if she were dead.

Style choices aside, it seemed that a significant number of people around the world were following in my footsteps. It took me years to fully understand why this was happening. Sure, many people were making bad choices, but that wasn’t the whole story. What really happened during the time frame when consumer debt and obesity rates began to soar was something else. In both the financial services world and throughout the food services industry the products that were offered to consumers changed dramatically. Easy access to credit and convenience foods entered into the mainstream. At the time we didn’t begin to understand the ramifications. We simply didn’t know what we didn’t know. We over borrowed and we took advantage of processed and prepackaged foods. We also forgot to maintain a steady pattern of saving. The common denominator between food and money became convenience. Who knew that convenience would carry such a high price tag? We've wound up with skyrocketing bankruptcy and foreclosure rates combined with astronomically high rates of diabetes, heart disease, and strokes. And we did it to ourselves. 

Given the ever increasing costs of health care in our country it should come as no surprise that medical setbacks have been cited as a leading cause of personal bankruptcies in the United States. Another remarkable statistic came from Dean Ornish, Founder of the Preventive Medicine Research Institute who stated "Seventy-five percent of the $2.8 trillion in annual health care costs in the United States is from chronic diseases than can often be reversed or prevented altogether by a healthy lifestyle.” I haven’t seen anyone place a number on the financial ramifications of being bad with money but it’s probably safe to say that number is also more than a trillion dollars.Thankfully, we have the power to reverse the damage by making more informed choices and taking action. And the first step we can take is to set and track our goals. 

I learned the importance of tracking while participating in the Weight Watchers® program. At Weight Watchers you set and track a daily goal for eating. Access to solid information combined with group support and tracking has turned Weight Watchers into a billion dollar brand…because it works. It turns out those same principles can be applied to money as well as other aspects of our lives. The reason tracking is so important is that we don’t know what to change if we don’t know what we’re doing wrong. If it weren't for tracking I would still be wearing overalls and I'd still be overspending and setting a terrible example for my children.

Over the past several years I’ve heard some remarkable stories about the impact of tracking when it comes to money. Students have told me they couldn't believe how much money they were wasting by eating out too often. Several students have told me they quit smoking after realizing how much money they were spending on cigarettes. One student told me he didn't know he had a gambling problem until he started tracking his spending. But my favorite comment was from a young man who said he had no idea how much money he was spending on his girlfriend and therefore came to learn that girls are very expensive. Well, value is in the eye of the beholder and some things are worth it. But many times when we look back on our spending we have regrets. And that doesn't feel so great. Ultimately there’s nothing quite like the reality check of seeing something in black and white to open our eyes to the power of a day and the impact of a choice. You can easily find out for yourself by testing the theory. But here's a great tip for you. You need to track as you go. It doesn't work if you wait until the end of the day. You'll miss out on that "think before you ...." moment.

So how can we do our part to reverse these trends? Our country has always been very resilient and we've always been able to overcome adversity. Maybe it’s because in a sense, our country is like one big family and at the end of the day, like it or not, we’re all part of the same team. So as a member of Team U.S.A. we can all take better care of ourselves. Everyone wants to be healthy, right? And everyone wants to be wealthy, right? Hard to imagine that anyone starts the day wanting to make themselves sick or broke. So let's be more careful about what we eat and what we do with our time and money.  Each of us has the power to make better choices and it starts by taking on every day and every decision as though it makes a difference, because it does. 

Attending the awards ceremony for the Books for a Better Life Award in New York in 2011

Thanks to my work in the field of financial literacy and the publication of my latest book by Simon & Schuster called “Wealth Watchers – A Simple Program to Help You Spend Less and Save More” I’ve been fortunate enough to meet some fairly influential people who are in a position to create a national financial literacy and wellness campaign. But the most important person will be you. Since no one answer works for everyone it seems logical to put a spotlight on a wide range of information about nutrition, exercise, financial literacy, and while we’re at it, improving our minds. Thankfully our country has one of the best library systems in the world and we can take advantage of their resources for free.

The Naperville Public Libraries became the site of a pilot program called “Healthy, Wealthy, & Wise.” It’s such a simplistically brilliant idea. The library puts a spotlight on a variety of books, DVDs, and programming which already exist in the field of nutrition, exercise, personal finance, and improving our minds. Library personnel then partnered with several community groups and organizations to make the most of the financial literacy and wellness programs already taking place in the community. Rather than reinvent the wheel, “Healthy, Wealthy, & Wise” simply highlights what’s already out there and everybody wins. I love that the phrase “Healthy, Wealthy, & Wise” is a quote from Ben Franklin, the founder of our country’s library system.

The City of Naperville Proclaimed 2013 the year of "Healthy, Wealthy, & Wise"

When it comes to reaching students around the country it’s hard to imagine a better partner than school librarians. They know their school community and they know where there might be an opportunity to introduce something like “Healthy, Wealthy, & Wise” to the students and faculty members they serve. I’ve met with school librarians from every grade level including college librarians and the response to bringing this program to their schools has been overwhelmingly positive. One thing that surprised me was that each of them had a different idea for how it could work in their school community. One elementary school librarian told me that she thought it could be tied to their anti-bullying campaign. One of the high school librarians thought it might be picked up by the P.E. teachers as part of their anti-obesity campaign. And another high school librarian thought the students could promote the “Healthy, Wealthy, & Wise” message through their daily video announcements. One of the college librarians thought it could be integrated into freshman orientation and then followed up by creating some type of health fair as well as offering ongoing “Healthy, Wealthy, & Wise” programs throughout the school year.

As much as libraries can give us the tools we need to be “Health, Wealthy, & Wise”, my hope is that we’re able to convince celebrities to get behind the initiative. We need their help if we’re going to create a national cultural shift where we all do a little bit more to be healthier and smarter with money. The key to a successful campaign depends upon people we admire using their star power to promote the cause. Why celebrities? Because we notice them. We buy products they endorse because in some way, shape, or form we want to be like them. And their ability to influence our actions extends beyond our purchasing decisions.

Some of you may be aware that there is a national debt clock in New York City. Wouldn’t it be nice if we also had a similar public display for our consumer debt rates, our obesity rates, and our personal savings rates along with a healthy target for each of those categories? It would be so helpful to have a highly visible measure for the success of a national financial literacy and wellness campaign. Essentially, we just need to move all of those statistics in the right direction. So let's do it.

Buy This Book!

“A Fighting Chance” by U. S. Senator Elizabeth Warren is a must read for everyone.

The first time I heard of Elizabeth Warren was through a documentary called “Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders.” We used to show the documentary to the students at Benedictine University as part of a financial literacy class but it was so disturbing that we had to stop. The students just couldn’t take it. Part of the documentary followed the lives of people who became so hopeless over their financial setbacks that they took their own lives.  

One of the many things that I have come to love about Elizabeth Warren is that she’s all about action. She didn’t just talk about what was going wrong in the world of money, she did something about it. And it was monumental. Elizabeth Warren was able to accomplish the unthinkable act of creating an agency dedicated to protecting consumers from deceptive lending practices. I was lucky enough to be chosen to spend two days in Washington, DC alongside other financial literacy advocates to help the new Consumer Financial Protection Bureau establish national priorities in the area of financial education. One gentleman spoke up during the series of meetings and said something that I’ll never forget. “We can teach our children to swim but what difference does it make if we throw them into a pool of sharks?” So true.

So the job of the CFPB is to clear the pool of sharks…and the job of the financial literacy/capability/empowerment world is to teach consumers to swim. Millions of Americans will have a fighting chance to become financially secure thanks to the work of Senator Warren and everyone who made the CFPB a reality. Great job!

Avoiding The Million Dollar Mistake

Graduating from high school is an absolute must.

It’s hard to believe that some school systems have a rampant problem with students dropping out before finishing high school. Why the rush to join the real world? What a high school drop-out will soon find out is that school is actually so much easier than what comes next. Finding a job, finding a place to live, the brutal truth that it’s very expensive to support yourself…or the flip side which is the astronomically high rates of high school drop-outs who find a free place to live in the prison system. Not exactly Club Med, and a criminal record is definitely a setback when it comes to finding a job. It would be nice if we could get students to understand that education is the Golden Ticket that anyone can have. Not that we can all afford an expensive education, but getting a high school diploma is the absolute rock bottom foundation for going anywhere in this world. Making the choice to drop out of high school is a million dollar mistake.

Beyond academics, high school should also provide the foundation for developing important life skills, like cooking, managing money, and manners. Educators have an incredible opportunity to truly make a lasting and significant difference in the lives of students. In the end, does it really matter if students have spectacularly high grades and test scores? If they can’t handle money, prepare healthy meals, or if they don’t have the proper manners to succeed in the workplace, they will be lost. 

Some people would say those lessons should be taught at home, but it’s a well known fact that many students follow the lead of their peers and it helps if young people have access to the same information. And let’s face it; children don’t always value what their parents try to teach them.

Here are four things that every young person should understand beyond reading, writing and arithmetic:

Be respectful and polite. Good manners go a long way toward getting ahead in life. Being considerate toward others is a must. It’s not hard. You just treat people the way you’d like to be treated. That includes how you approach people online. Social Media means everyone knows everything about what you are saying and doing. Never send a photo you wouldn’t want your grandmother to see. Never write something you wouldn’t want your grandmother to read. Never ever bully someone in person or online. It’s like telling the world that you are psychologically damaged. Only troubled people feel the need to make someone else feel bad. You get what you give so be sure to make others feel they are valued and worthwhile. And in case you don’t know this already, don’t talk on your cell phone in front of other people unless absolutely necessary, and never have a conversation on your speaker phone in front of other people. Lastly, never chew gum in public. It lowers your visual IQ by at least 50%.

Value your health. Learn to cook so you can eat healthier meals. Stay away from things that are bad for you. Be active, even if it’s just 20 minutes a day. Choose to be with other people who also value their health. Protect your body and stay away from danger. Don’t drive while impaired or distracted. Nearly 20,000 people a year lose their lives in traffic accidents attributed to driving while impaired, distracted, or sleep deprived. Thousands more are seriously injured.

Be smart with money. How you spend money is an indication of your values. And saving money is an indication that you are on track to become wealthy. It’s not about what you make. It’s about what you spend and how you spend it.

Stay in School. Ben Franklin was right when he said "An investment in knowledge pays the best dividend."

Until Debt Do Us Part?

It’s commonly believed that money is the number one cause of divorce. I can’t tell you how many times I’ve quoted that statistic. I finally asked one of my colleagues who concentrates in the field of family law if she thought that it was true. Her answer took me by complete surprise. Based on her 20 plus years of legal experience she believes that the number one cause of divorce is untreated mental health issues. And those untreated mental health issues (think depression/anxiety/gambling/substance abuse/anger management) often lead to serious financial problems and a very “Unhappily Ever After” kind of marriage. 

April is Financial Literacy Month but maybe we should make it Financial Literacy & Mental Health Month. Our world could be a much happier and wealthier place. A study by Georgia College & State University economist, Ben Scafidi, found that “family fragmentation” costs U.S. taxpayers at least $112 billion each year. That figure doesn’t even include the added expense of creating two households where there had been one, let alone the emotional toll that a divorce can take on everyone involved. And according to the National Alliance on Mental Illness, untreated mental illness in the U.S. costs more than $100 billion a year in lost productivity. Our judicial system and jails are dealing with a record number of cases involving individuals who suffer from untreated mental illnesses. Suicide ranks among the top three killers among young people and it ranks as number 15 among the most common killers in the U.S. overall. 90 percent of suicides can be attributed to mental illness and it now outnumbers death from car crashes.

Any type of stress is bad for our health so it makes sense to do what we can to take care of the problems that are within our control…like seeking treatment for mental health issues…and while we're at it becoming financially fit so we don’t bring unnecessary stress into our lives or into the lives of our significant others.

To learn more about the intersection between marriage and money check out the following article by Jeffrey Dew titled “Thrifty Couples are the Happiest” at http://www.stateofourunions.org/2009/bank_on_it.php

Wishing everyone a very happy, healthy, and prosperous day!

Alice

Priceless!

 Spring break 2014 reunion with Trisha Holmes Conrad

It’s really true. The best things in life are free. Especially good memories and good friends. 

It would be impossible to put a price tag on the value of friendship, but if I had to give it a dollar value, I’d say Infinity. Hmmm…that’s not a dollar amount. How about One Trillion Dollars? Yes, that sounds about right.

This past spring break we went on a road trip down south which included a visit to see one of my favorite people of all time. My long lost roommate from the University of Alabama, Trisha Holmes Conrad. Trisha saved my life many moons ago when I was a transfer student at the University of Alabama. The people in Student Housing actually placed me in a dorm room that turned out to be a utility closet. No windows and no way to lock the door from the inside. I lasted one night before going to student housing and demanding my money back…and they gave it to me. Yikes! Now what? This was an era before cell phones, let alone smart phones. My best hope for finding a place to live was to go to the Student Union to see if someone might be looking for a roommate. 

I know I must have a guardian angel looking out for me because I was incredibly lucky to come across a notice from a young woman needing someone to share an apartment. Trisha, my angel, picked me up at the Student Union and drove me to our new home. It was wonderful. Tennis courts, swimming pool, walk-in closet…and less than the cost of the dorm. But the greatest gift of all was my new friend, Trisha.

                                             In our apartment with my sorority sister, Tish Poole

Spring break 1992

The last time I saw Trisha was more than 20 years ago on another road trip down south with my mom and two sons. I was so excited to see her that I locked the car with the keys in it while the engine was still running. My boys said I did it on purpose so I’d have more time with Trisha. (I wish I were that smart.) It was soooo great to see her, but then we lost touch again and I couldn't find her. I had also forgotten her married name which didn't help things. Lucky for me I came across an old Christmas card from Trisha that included her married name and last known address. After doing an internet search I found her in Telluride, Colorado. She was working at an Inn, but every time I called nobody knew who she was. Finally my persistence paid off and someone answered the phone who actually knew her. Trisha had moved back to Birmingham, Alabama and was working at the Tutwiler Hotel. When I did my next internet search to see if I could find her phone number in Birmingham, her name came up in an obituary for her mother who had died only a day or two earlier. So incredibly sad. Trisha had been kind enough to take me home with her when we were roommates and I was able to meet her mother and daddy and her younger brother Phil.  Such wonderful people and so kind to allow a Yankee into their home.

Our entourage, Eileen Paulson, Trisha, Dan McQuaid (patient husband) and KC McQuaid

Looking back on spring break there were so many things that were memorable, but the highlight for me was seeing Trisha. How funny to go so many years without seeing each other and then falling right back into the comfort of a hug from a good friend. Absolutely priceless.

Saving Can Be Sexy?

The current financial literacy/capability/empowerment movement isn’t making the impact that had been hoped for. Why not? What’s missing? Savings rates should be higher. Credit card and student loan debts should be lower. Pay Day lenders shouldn’t have any customers. Why aren’t people making better choices when it comes to money?

One young person told me we needed to make saving sexy. Wow…I hadn’t heard that before. And I haven’t seen anything remotely sexy in the world of financial education. Hmmm…maybe “sexy” is the missing link in the financial literacy world. Hard to imagine a girl swooning when her boyfriend tells her he contributed the maximum amount allowed to his retirement account. And would a young man actually care that his significant other had no credit card debt? Probably…but that doesn’t strike me as sexy. But I do think this person is on to something. If nothing else, sexy financial education materials will most definitely get people talking. I wonder if this could become one of those things where any publicity is good publicity.

What do you think?

Alice

Did Bankruptcy Reform Cause the Great Recession?

I’ve always wondered if bankruptcy reform had something to do with the onset of The Great Recession. The timing is pretty interesting. In 2005, driven by the financial services industry, new bankruptcy laws were enacted to make it much more difficult to declare bankruptcy which in turn made it more difficult to survive a business failure, or any type of financial setback for that matter. (See the link below for a more detailed description of bankruptcy reform.) It would take a couple of years for the aftermath of the new bankruptcy laws to play out in our economy, so it’s not that far-fetched that the change in the law had an unintended consequence…like a massive recession that unfortunately came with a price tag of more than a trillion dollars.

Too bad that new law went through. Our country had always been able to absorb a certain amount of failure while continuing to thrive. Part of the “American Story” has been the ability to pick ourselves up after failing…move forward, and ultimately succeed. We all know that innovation is the cornerstone of progress and it requires a leap of faith along with an ability to borrow money to start new businesses. Those new ventures wind up employing a whole lot of tax-paying people. Even if a start-up winds up becoming an unprofitable business that ultimately goes into bankruptcy, something good happened along the way. 

Plenty of American success stories involve people who have failed before only to rise from the ashes and create something magnificent…like Walt Disney. We need visionary people to be able to take and survive risks even if the rate of success can seem relatively low. The strength of our pre-bankruptcy reform economy is proof that more good than bad came out of our old bankruptcy laws.

Still, I’m not sure that I’m quite right about the role that bankruptcy reform played in the Great Recession. What doesn’t line up the way I would have expected is that bankruptcies began to grow in the 1950’s, well before there was any talk of bankruptcy reform. And bankruptcy reform couldn’t have been responsible for the subprime lending that became the downfall for millions of American homeowners. Or could it? It’s interesting to note that the increase in the rates of foreclosures closely follow the timeline one would have expected if bankruptcy reform really was the culprit.

So am I right? Was bankruptcy reform the cause of the Great Recession? The following graphs reflect a timeline of bankruptcy filings and foreclosures. I think what it means is that I’m only partially right. Bankruptcy filings began taking off in the 1950’s and then escalated after 1980. That timeframe happens to coincide with easy access to new credit products, not bankruptcy reform. On the other hand, it’s clear that foreclosures went through the roof after bankruptcy reform, which also happened to be after the rise of loosely regulated easy access to mortgage products. Ah, now we have a common denominator. Loosely regulated easy access to borrowed money. Ben Franklin would have been all over this one.

What do you think?

Alice

http://www.businessweek.com/stories/2007-10-28/bankruptcy-reform-bites-back

According the above referenced article, the old bankruptcy laws were considered debtor friendly, allowing a borrower to be able to afford to keep their home while eliminating their consumer debts like credit cards. There were minor exceptions like child support and student loans which couldn’t be wiped out by declaring bankruptcy. This type of bankruptcy was known as Chapter 7 and it left debtors with more disposable income so they were in a better position to be able to afford to make their mortgage payments. The new bankruptcy laws push most debtors into Chapter 13 which is where a borrower is given a repayment plan to pay down their debts over a period of time. The new bankruptcy law didn't allow a bankruptcy judge any discretion to adjust the terms of a mortgage so mortgage payments often remain unaffordable. Borrowers are also still obligated to make payments on their consumer loans leaving them very little disposable income and very little room for any future financial setbacks. Ultimately, many borrowers felt the only option to survive was to do something that was once considered unthinkable, walk away from their homes. 

Please click on the link above to read the full article.

What's in a Name?

Taking the Megabus from New York to Washington, DC

What's the difference between Financial Literacy, Financial Capability, and Financial Empowerment? I'd like to say that the answer is nothing...there is no difference. But I would be wrong. Perception is everything and many people think the phrase "financial literacy" implies that someone is illiterate so we're going to be hearing less and less about financial literacy.  Financial Capability is now the new buzz phrase in the world of financial education. It's really the same thing as Financial Literacy, it just sounds better. And what about Financial Empowerment? Same thing too, but it sounds even better than Financial Capability.

If you'd like to stay on top of the world of Financial Empowerment you may want to follow the President's Advisory Council on Financial Capability for Young Americans. The group met yesterday at the United States Treasury Department to talk about creating a national cultural shift where being smart with money becomes the norm. It's a pretty monumental task but there were plenty of powerful people in the room determined to make it happen. If you're interested you should check out www.mymoney.gov. It's an incredible resource for anyone interested in learning more about the Financial Literacy Movement...I mean the Financial Capability and Empowerment Movement!

The President’s Advisory Council on Financial Capability for Young Americans Inaugural Meeting including Secretary of Education, Arne Duncan, Secretary of the US Treasury Department, Jacob Lew, and the Director of the Consumer Financial Protection Bureau, Richard Cordray, along with all of the Council members in the Cash Room at the US Treasury Department

John Rogers, Chairman of the President’s Advisory Council

José Cisneros, Vice Chair of the President’s Advisory Council

Inside the Cash Room at the US Treasury Department with Dave Mancl

Leaving the Treasury Department to head home to Naperville

The following individuals have been appointed to serve on the President's Advisory Council:

John W. Rogers, Jr., Appointee for Chair, President’s Advisory Council on Financial Capability for Young Americans

John W. Rogers, Jr., is the Chairman, CEO, and Chief Investment Officer of Ariel Investments.  Mr. Rogers was previously Chair of the President’s Advisory Council on Financial Capability from 2010 to 2013.  Mr. Rogers currently serves as a board member of Exelon Corporation and McDonald’s Corporation.  Additionally, he is a director of the Chicago Urban League, a trustee of The University of Chicago, Chairman of the Board of Directors for The University of Chicago Laboratory Schools, and a member of the board of the Nathan Cummings Foundation, where he serves on the Investment Committee.  Mr. Rogers was previously Chair of the President’s Advisory Council on Financial Capability from 2010 to 2013.  Mr. Rogers served as a Co-Chair for the Obama-Biden Presidential Inaugural Committee in 2009.  He received an A.B. from Princeton University. 

José Cisneros, Appointee for Vice Chair, President’s Advisory Council on Financial Capability for Young Americans

José Cisneros is the Treasurer of the City and County of San Francisco, a position he has held since 2004.  Mr. Cisneros served as Deputy General Manager for the San Francisco Municipal Transportation Agency.  Previously, Mr. Cisneros worked for IBM Corporation and Lotus Development Corporation as a Senior International Product Manager.  Prior to this, he was an Assistant Vice President at Bank of Boston.  He received a B.S. from the Sloan School of Management at the Massachusetts Institute of Technology.

Theodore J. Beck, Appointee for Member, President’s Advisory Council on Financial Capability for Young Americans

Theodore J. Beck is the President and CEO of the National Endowment for Financial Education (NEFE), a position he has held since 2005.  Mr. Beck also serves on the Federal Deposit Insurance Corporation Advisory Committee on Economic Inclusion, and as Chairman of the board of the Jump$tart Coalition for Personal Financial Literacy.  In 2010, he was appointed to the President’s Advisory Council on Financial Capability and was Chair of its Research and Evaluation Committee.  In 2008, he was appointed to serve as a Member of the President’s Advisory Council on Financial Literacy and served as Chair of the Outreach Subcommittee.  Prior to his appointment at NEFE, Mr. Beck served as Associate Dean of Executive Education and Corporate Relations at the University of Wisconsin-Madison School of Business.  Prior to joining the University in 1999, he spent more than 20 years in various positions for Citibank/Citigroup, including Managing Director and Market Manager.  Mr. Beck received a B.A. from the University of Notre Dame and an M.B.A. from the University of Wisconsin School of Business.

Sherry Salway Black, Appointee for Member, President’s Advisory Council on Financial Capability for Young Americans

Sherry Salway Black is the Director of the Partnership for Tribal Governance at the National Congress of American Indians.  Previously, she was the Senior Vice President of First Nations Development Institute.  Ms. Black is a member of the Honoring Nations Board of Governors.  She also serves on the boards of First Peoples Fund, the Johnson Scholarship Foundation, and the Hitachi Foundation.  Ms. Black is a member of the Oglala Lakota Nation in Pine Ridge, South Dakota. Ms. Black was a Member of the President’s Advisory Council on Financial Capability from 2011 to 2013.   She received a B.S. from East Stroudsburg University and an M.B.A. from the Wharton School of Business at the University of Pennsylvania.

John Hope Bryant, Appointee for Member, President’s Advisory Council on Financial Capability for Young Americans

John Hope Bryant is the Founder, Chairman, and CEO of Operation HOPE, a nonprofit founded in 1992.  He is also the Co-Founder of Global Dignity and a member of the Forum of Young Global Leaders and Global Agenda Council for the World Economic Forum.  He served as Member of the President’s Advisory Council on Financial Capability from 2010 to 2013.  Prior to this, Mr. Bryant served as the Vice Chair of the President’s Advisory Council on Financial Literacy (PACFL) and as the Chairman of PACFL’s Committee on the Underserved. 

Anna Maria Chávez, Appointee for Member, President’s Advisory Council on Financial Capability for Young Americans

Anna Maria Chávez is the CEO of Girl Scouts of the USA.  Prior to her current role, Ms. Chávez served as CEO of Girl Scouts of Southwest Texas.  Before joining Girl Scouts, she held various roles for the State of Arizona, including Deputy Chief of Staff for Urban Relations and Community Development for former Governor Janet Napolitano, Director of Intergovernmental Affairs, in-house Counsel, and Assistant Director for the Division of Aging and Community Services at the Arizona Department of Economic Security.  Before working for the State of Arizona, Ms. Chávez worked as Senior Policy Advisor to former U.S. Secretary of Transportation Rodney E. Slater.  She served as Chief of Staff to the Deputy Administrator at the Small Business Administration (SBA) and Chief of Staff for the Office of Government Contracting and Minority Enterprise Development at SBA.  From 1996 to 1998, Ms. Chávez acted as Legal Counsel for the Federal Highway Administration.  She received a B.A. from Yale University and a J.D. from the James E. Rogers College of Law at the University of Arizona.

Kerry N. Doi, Appointee for Member, President’s Advisory Council on Financial Capability for Young Americans

Kerry N. Doi has served as President and CEO of the Pacific Asian Consortium in Employment since 1976.  Mr. Doi is also a board member of the Los Angeles Housing Partnership and the California Community Economic Development Association.  From 2009 to 2011, Mr. Doi served on the Federal Reserve Board’s Consumer Advisory Council.  He is a founding member of the National Coalition for Asian Pacific American Community Development.  Mr. Doi received a B.S. from California State University, Long Beach.

Ted Gonder, Appointee for Member, President’s Advisory Council on Financial Capability for Young Americans

Ted Gonder is the CEO of Moneythink, an organization he co-founded in 2009.   In 2012, Mr. Gonder served as Entrepreneur-in-Residence at the U.S. Citizenship and Immigration Services at the Department of Homeland Security (DHS).  Prior to serving at DHS, he founded The University of Chicago Entrepreneurship Society and Project Cooldown.  Mr. Gonder has also worked for several startup companies, including Kauffman Foundation.  He received a B.A. from The University of Chicago. 

Richard G. Ketchum, Appointee for Member, President’s Advisory Council on Financial Capability for Young Americans

Richard G. Ketchum is the Chairman and CEO of the Financial Industry Regulatory Authority (FINRA).  Prior to joining FINRA, Mr. Ketchum was CEO of NYSE Regulation, Inc., Chief Regulatory Officer of the New York Stock Exchange (NYSE), and General Counsel of the Corporate and Investment Bank of Citigroup, Inc.  Prior to Citigroup, he served as President of both the National Association of Securities Dealers and The NASDAQ Stock Market, Inc.  He also worked at the U.S. Securities and Exchange Commission for 14 years, where he served as Director of the Division of Market Regulation for eight years.  He served as a Member of the President’s Advisory Council on Financial Capability from 2010 to 2013.  Mr. Ketchum received a B.A. from Tufts University and a J.D. from New York University School of Law.

 Beth Kobliner, Appointee for Member, President’s Advisory Council on Financial Capability for Young Americans

Beth Kobliner currently writes a column about kids and money for The Huffington Post and www.Mint.com.  She has written about a range of personal finance topics for publications including The New York Times, Money,Parade, Reader’s Digest, Glamour, and Redbook.  Ms. Kobliner has been a regular contributor on public radio’s “Marketplace” and “The Takeaway”, and a repeat guest on NBC’s Today show, CNN, and MSNBC.  Ms. Kobliner served as content expert for Sesame Workshop’s financial education initiative, For Me, for You, for Later.  She was a Member of the President’s Advisory Council on Financial Capability from 2010 to 2013.  She received an A.B. from Brown University.

Kilandigalu (Kay) M. Madati, Appointee for Member, President’s Advisory Council on Financial Capability for Young Americans

Kilandigalu (Kay) M. Madati is the Head of Entertainment & Media on the Global Marketing Solutions team at Facebook, a position he has held since 2011.  From 2008 to 2011, Mr. Madati was the Vice President of Audience Experience at CNN Worldwide.  Previously, from 2007 to 2008, Mr. Madati was the Vice President of Marketing at Community Connect, Inc.  Mr. Madati began his career with BMW of North America where he held various positions, including Regional Marketing and Operations Manager from 2002 to 2004, Relationship and Multicultural Marketing Manager from 1999 to 2002, Sales and Marketing Manager from 1997 to 1999, and Management Associate from 1996 to 1997.  Mr. Madati received a B.A. from Georgetown University. 

Marc H. Morial, Appointee for Member, President’s Advisory Council on Financial Capability for Young Americans

Marc H. Morial is President and CEO of the National Urban League.  He has served as a Louisiana State Senator, Mayor of New Orleans, and President of the bi-partisan U.S. Conference of Mayors, where he served during the 9/11 crisis.  Earlier in his career, Mr. Morial practiced law and taught Constitutional Law and Business Law at Xavier University.  He served as a Member of the President’s Advisory Council on Financial Capability from 2012 to 2013.  Mr. Morial received a B.A from the University of Pennsylvania and a J.D. from Georgetown University Law Center.

Carol E. Quillen, Appointee for Member, President’s Advisory Council on Financial Capability for Young Americans

Carol E. Quillen is the President of Davidson College, a position she has held since 2011. Previously, Dr. Quillen was Vice President for International and Interdisciplinary Initiatives at Rice University.  At Rice University, Dr. Quillen was also a member of the history faculty, Director of the University’s Boniuk Center for the Study and Advancement of Religious Tolerance, and Vice Provost for Academic Affairs.  She received a B.A. from The University of Chicago and a Ph.D. from Princeton University.

Amy Rosen, Appointee for Member, President’s Advisory Council on Financial Capability for Young Americans

Amy Rosen is President and CEO of the Network for Teaching Entrepreneurship, a position she has held since 2008.  She is the Vice-Chair of the World Economic Forum’s policy council on youth unemployment and a member of the Council on Foreign Relations.  Ms. Rosen was the Vice Chair of the President’s Advisory Council on Financial Capability from 2011 to 2013.  Ms. Rosen served as a Fellow at the Broad Urban Superintendents Academy and as the Chief Operating Officer for New Visions for Public Schools.  Ms. Rosen also served as a Director of the Amtrak Board of Directors, Vice Chairman of the NJ Transit Board of Directors, Deputy Commissioner of the NJ Department of Transportation, and Senior Vice President of Lockheed Martin Information Management Services.   Ms. Rosen received a B.A. from Pitzer College. 

Charles W. Scharf, Appointee for Member, President’s Advisory Council on Financial Capability for Young Americans

Charles W. Scharf is the CEO and a Corporate Director of Visa Incorporated.  From 2011 to 2012, Mr. Scharf was a Managing Director of One Equity Partners, the private investment arm of JPMorgan Chase & Co.  From 2004 to 2011, Mr. Scharf served as CEO of Retail Financial Services at JPMorgan Chase & Co.  He was CEO of the retail division of Bank One Corporation from 2002 to 2004.  Mr. Scharf also served as Chief Financial Officer (CFO) of Bank One Corporation from 2000 to 2002.  Prior to Bank One, he was CFO of the Global Corporate and Investment Bank division at Citigroup, Inc. from 1999 to 2000.  From 1995 to 1999, he was the CFO of Salomon Smith Barney and its predecessor company.  Mr. Scharf received a B.A. from The Johns Hopkins University and an M.B.A. from New York University. 

And The Winner Is.....

Alice Wood with City of Naperville Mayor, George Pradel in 2007

The “Wealth Watchers Financial Literacy Advocate Award” began in 2007 to recognize an entity or an individual who made a significant contribution to the field of financial literacy at a national level. Doug Tillett, from the Federal Reserve Bank of Chicago, nicknamed the award “The Benny” and the rest is history. Wealth Watchers has proudly presented ten "Benny" Awards to several well known financial literacy advocates throughout the past several years.

2007 Award Winners

Oprah Winfrey for her series of shows called “The Great American Debt Diet” where Oprah used her star-power to put a spotlight on the fact that too much debt is ruining people. Oprah introduced her audience to three financial experts who showed us that we have hope as long as we face our problems and take action.

Susan Beacham, Founder and President of The Money Savvy Generation. Susan created a piggy bank with four slots as a means of teaching children about the four choices they can make with money: Spend, Save, Donate, and Invest. Her program has been used around the world.

2008 Award Winners

United States Treasury Department for their work in coordinating the creation of The National Strategy for Financial Literacy. The Honorable Anna Escobar Cabral, Treasurer of the United States of America, received the award on behalf of the Treasury Department during a Money Smart Week event, which was held at The Federal Reserve Bank of Chicago.

The Federal Reserve Bank of Chicago for their ground breaking work creating a financial literacy movement known as Money Smart Week. The Money Smart Week model has been used by different communities around the country and serves as an umbrella to bring together members of the financial services industry and other interested parties dedicated to financial literacy.

2009 Award Winners

Visa U.S.A. and McDonald’s U.S.A. for their work in bringing a financial literacy program to 500,000 McDonald’s restaurant employees around the country. The program became known as America’s largest financial literacy initiative in the workplace. The program put a spotlight on the challenges faced by minimum wage workers.

2010 Award Winners

The Honorable Peter G. Peterson, Founder of the Peter G. Peterson Foundation, for his personal and financial commitment to increase public awareness of the fiscal challenges threatening America’s future. Mr. Peterson created his foundation with a billion dollar commitment to successfully address these challenges while finding and implementing sensible solutions.

David M. Walker, former Comptroller General of the United States, former President and CEO of the Peter G. Peterson Foundation, and current CEO of the Comeback America Initiative, for his relentless passion for helping our country become financially sound. Mr. Walker was instrumental in the creation of I.O.U.S.A. and I.O.U.S.A. Solutions, educational and entertaining documentaries that have engaged audiences of every age and ideology while serving as a national call to action.

Alice Wood Presenting the award to Dave Walker

2011 Award Winners

Operation Hope for making financial empowerment a global cause through their Silver Rights Movement reaching underserved communities and individuals around the world. John Hope Bryant and the Operation Hope team are leading the mission to eradicate poverty around the world.

The Jump$tart Coalition for Personal Financial Literacy for their work in bringing meaningful financial education opportunities to students and teachers around the country. Their national coalition of members play a critical role in the much needed effort to give students the information they need to gain financial independence.

Ken McDonnell receiving the 2011 Financial Literacy Advocate Award on behalf of The Jump$tart Coalition for Personal Finance at the US Treasury Department in Washington DC on September 27, 2011.

Congratulations to all of the winners...which by the way happens to be all of us since we're the beneficiaries of the financial literacy  movement!