Carrie Schwab-Pomerantz is the Board Chair and President of Charles Schwab Foundation, Senior Vice President of Charles Schwab & Co., Inc. and Board Chair of Schwab Charitable and she doesn’t just talk the talk, she walks it and lives it and is passionate about helping women embrace their own financial destiny. She is a commissioner on the Commission for the Status of Women in San Francisco, and in the past has served on both President Bush and Obama’s President’s Advisory Council on Financial Capability. That work, confirmed for her how universal and thorny the problem of financial literacy is for women of all economic strata. I’ve been lucky to witness this passion for myself, in conversation and in the actions of her company. They really do care.
I asked and she answered….
Have you always worked in the family business? Tell us how you began?
I started working there when I was 16 as a file clerk. The company had literally only two rooms; one with my dad’s desk in the middle of the room surrounded by other employees and next door was a small conference room with brokers sitting around a table, each with a black rotary phone. It was a start up in every sense of the word, and I have loved watching and helping the company grow from those small beginnings.
After college, I moved to Atlanta where I worked directly with clients. I later moved back to San Francisco to lead the company’s first women’s initiative and later to head the Foundation, where I focus on financial education programs, corporate philanthropy and employee volunteerism.
So many of us have been busy caring for children and now parents, and the reality of retirement savings is just a dream. What do you say to the woman who is 50 and needs to start tackling her financial fitness? How does she begin?
First, it’s important to acknowledge the inherent challenges women face compared to men, like living longer and earning less. Full-time working women 55 and older earn 75 cents on the dollar compared to their male counterparts. And women are more likely to go in and out of the workforce to care for children and elderly parents.
But it’s important to remember that it’s never too late to start!
Start by creating a basic financial plan. You don’t need to have a lot of money to warrant a plan. Planning leads to better financial habits and more engagement with your money. Think about your goals and what’s important to you, assess your cash flow and assets, focus on debt management and savings.
If you have access to a 401(k), contribute as much as you can to take advantage of the company match, otherwise you’re leaving free money on the table. Plus you get the tax benefit. If a company 401(k) isn’t available to you, IRA could be an option, and there are accounts available for those who are self-employed, such as SEP accounts.
Why do you think women are less comfortable with money?
Some of this disparity starts at an early age at home. Our research shows that parents are more likely to talk to young girls about household finance topics like spending and saving, whereas parents talk to boys about long-term financial planning and investing, things that help build wealth. Research also shows that parents tend to pay different allowances to boys and girls for the same chores.
But also women tend to be more conservative than men, are less likely to be investors, and less likely to set aside money for themselves. But it’s not selfish to take care of yourself first – it’s like oxygen masks on an airplane, you put your mask on before you help others.
How do we inspire our daughters to be smarter about money?
Talk to your children – boys and girls – about money equally. They need to learn the same lessons about spending, saving, borrowing and investing from the start.
From an early age, I set up an allowance system with my kids to teach them the importance of working for money, even if it’s just household chores, and holding firm. For example, when my son was seven years old, I brought him to the pharmacy and he asked me to buy him Pokémon cards. While it seemed easier to just buy the cards rather than dealing with an upset child, I instead told him to use the allowance he worked for to buy the cards. He ultimately passed on spending his own money, and that provided an early lesson in the value of money that you work for.
I’ve also insisted that all of my kids get jobs as they get older, and had each of them open an IRA when they turned 16 so they started saving and investing early.
What makes you so passionate about financial literacy?
We all fall on hard times. For me, it started with my parent’s divorce and the gender roles I saw growing up in family and society.
The bottom line is, financial literacy impacts everyone. It is blind to race, gender, age or socioeconomic status, and it permeates every aspect of our life, whether it’s living paycheck-to-paycheck, being bypassed for credit, experiencing stress at work, or the inability to leave an abusive relationship.
What’s the most inspiring 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 on the day that the dean unleashed his dose of professorial advice. I can’t remember his exact words, but the message was loud and clear: “Don’t major in statistics; you don’t have the grades. Try something less demanding.”
Was he right or wrong about my abilities? Honestly, I don’t know. 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!
Do you have a warning label? What would it say?
“Just say no!” I usually think everything sounds so fun and interesting that I end up overcommitting, and then I’m in the uncomfortable position of having to pull back. So I constantly have to exercise my ability to say no.
If you could have a super power, what would it be?
I would be consistently present. We all operate in such a fast-paced lifestyle that we risk losing the connection and impact that’s possible when we are completely focused. Being more present is a skill that all of us should practice more often.