FT Financial Literacy and Inclusion Campaign: America must confront financial illiteracy head on

This article is the last part of the FT’s Financial Education and Inclusion Campaign

The writer is co-CEO and chairman of Ariel Investments, chairman of Starbucks Corporation and a director of JPMorgan Chase

I’ve worked in the investment industry for 30 years, and there’s still one mystery that eludes me: why is it so hard for people to talk about money? By talking about money, I don’t mean showing off. I mean discussing financial matters to inform, not to impress. We will freely discuss the vaccine we received in an elevator with strangers. But a conversation about money rarely happens, even in a private setting with close friends.

I believe that many Americans react badly to discussions about money because they lack knowledge. Avoiding the topic starts early and at home. I marvel at how parents devote their hearts to reading dinosaur books to a five-year-old when there’s no way he’ll ever meet one. During this time, the many financial problems that a child is sure to face are avoided. I’m not advocating talking about mortgage rates with preschoolers, but I do believe that as kids get older, we shouldn’t be afraid to engage them in practical financial conversations.

And yet, in our society, money is so taboo that American parents are more likely to discuss topics like sex and drugs than basic finances. Our education system is not taking over either. Most high schools do not teach financial literacy, although some still offer a carpentry workshop. Retirement withdrawal may give something to do, but I believe those golden years would be much more enjoyable for students learning to maximize their retirement contributions.


For some families, money discussions are unavoidable. Parents who are struggling financially will tell their kids bluntly what they can’t afford. These kids are learning economic concepts like scarcity and opportunity cost the hard way.

It was my own experience. As a child, I lived on precarious financial bases. In our house, money was always on our minds, but not understood at all. My mom raised six kids on her own in Chicago. I owe him my work ethic. I was the youngest of the six and watched her strive to support us. But despite her Herculean efforts, money was often scarce. When I was 10, I could read our “overdue” electricity bills and knew the exact amount of our monthly rent. The first check I ever saw had my mother’s signature on it — in full display on the wall of the local grocery store where it had bounced. I was mortified every time our phone was disconnected or the lights were off. In our worst moments, we were evicted and had to live in an abandoned building. Overwhelmed with shame, I hid these struggles from my friends, until adulthood.

My fear of our constant money shortages created a deep, gnawing desire for financial security. As a child, I was desperate to understand money – not to earn it, but to master it. And if I mastered it, I could make wiser decisions. It is not by chance that I landed in the investment sector.

What happens to a child often stays with him forever because he hasn’t developed advanced reasoning skills. A child does not know how, when or even if a bad situation will end. I may seem far from my childhood, but the pandemic has reawakened some of my unshakeable financial fears. Watching my six-year-old daughter made me wonder how my family would have survived the economic devastation that so many have suffered over the past year.

FT Cop

This article is part of the FT’s Financial Literacy and Inclusion campaign to develop educational programs to build financial literacy for those who need it most.

Financial literacy education gives young people the foundation for future prosperity and can help the economically disadvantaged move out of deprivation. Join the FT Flic campaign to promote financial literacy in the UK and around the world

Donate to the Financial Education and Inclusion Campaign here

Having experienced both poverty and plenty gives me a broad perspective at a time when our nation has become so polarized. It is distressing to see struggling people berated by society for their economic shortcomings. In many communities, financial security is not just a matter of “working harder” or “being smarter”. No one should be castigated for struggling to make ends meet. At the same time, no one should be condemned for doing the right thing. We should neither vilify nor glorify a bank balance.

American capitalism promises an equal chance to compete and succeed. And yet, systemic inequalities exist. For example, black men with a college education have about the same income prospects as white men with only high school diplomas. Latina women work for 22 months to earn what their white male counterparts earn in 12.

For decades, a growing middle class has been a sign of this nation’s economic health. In the 1970s, 61% of American adults lived in middle-income households. Today, that number has fallen to 51%, and the gap continues to widen. For the first time, a generation believes that its children will be worse off than them. It’s a real setback — emotionally, psychologically, and financially.

The fact that millions of Americans lack access to financial security has serious implications for our collective well-being. A more financially informed society will help reverse this trend. So many of our country’s ills are economic. Ignoring or simply admiring the problem does nothing to solve it. America has already solved tough challenges with boldness. We need to face our financial illiteracy head-on with courage and empathy, less polarization, more conversation, and real education – at home, at school, and at work.

We are at a critical moment. I believe the United States is facing a pandemic of inequality, as well as a Covid pandemic. And what we’ve learned from pandemics is that none of us are safe unless we’re all safe.

Letters in response to this article:

Financial illiteracy is also a problem for policy makers / By Professor Mehdi Al Bazzaz, Former World Bank Economist, Alexandria, VA, USA

Attempt to change discourse on poverty wins praise / By David Levine, Alexandria, Virginia, USA

Sarah J. Greer