Schwab and Boys & Girls Clubs of America Survey Shows Teens on Urgent Need of Personal Finance Education

Schwab and Boys & Girls Clubs of America Survey Shows Teens on
Urgent Need of Personal Finance Education
Majority of Teens, Ages 13-18, Agree that Money Management Should Be a High
School Requirement 


SAN FRANCISCO, April 20  /PRNewswire-FirstCall/ -- While youth are commonly
looked to as the beacon of the future, today's youth may be destined to repeat
the previous generation's missteps in money management unless they get help,
according to a recent survey* by the Charles Schwab Foundation and Boys & Girls
Clubs of America (BGCA).  Teens' uncertain grasp of basic financial concepts
underscores a dramatic need for more personal finance education -- not just
during April, which is National Financial Literacy Month -- but year-round.

Commissioned by the Charles Schwab Foundation, the study probed teen
definitions of financial literacy, their understanding of important concepts in
money management, and their beliefs about who should bear responsibility for
teaching them money management.  According to Carrie Schwab Pomerantz,
president of the Charles Schwab Foundation and the daughter of company founder
and CEO Charles R. Schwab, "These findings are a call-to-action for parents,
government and the private sector to do more to help today's teens become
financially savvy adults who can help reverse the course of poor saving and
debt management habits in the U.S."

For instance, only 17 percent of survey respondents said they were very or
extremely knowledgeable about how to manage debt, a finding that's notable in
light of the fact that the nation's bankruptcy and household debt levels have
climbed to all-time highs.  Further:

   --   Fewer than a third (28 percent) are extremely or very knowledgeable
        about creating a budget;
   --   Only a little more than a third (36 percent) are extremely or very
        knowledgeable about how to open a savings account;
   --   And only 10 percent understand the power of compounding, one of the
        most fundamental concepts in investing.



When asked to define the term financial literacy in their own words, the
majority of respondents (79 percent) could not.  Several answers to this open-
ended question, in fact, further underscore the urgency for more financial
education:

   --   "I think it is a month when a person would read and buy books."
   --   "I feel it means money for learning to read."
   --   "I think it's advanced English."



The survey is an outgrowth of the Money Matters:  Make It Count program,
launched last year by Schwab and BGCA, to promote financial literacy among
teens.  The program aims to reach 36,000 young people, primarily from
disadvantaged circumstances, during the next two years.

"As our world becomes increasingly complex, we need to do a better job of
teaching the next   generation the basics of personal finance so that they are
prepared to handle the pressures that await them," said Schwab Pomerantz. "It's
disturbing that the areas teens seem least knowledgeable about are managing
debt and creating a budget.  These topics are the cornerstone of the Money
Matters program, which we designed to teach good financial habits at a young
age and help teens make wise financial decisions as they move into adulthood."

The survey polled a national sample of teens as well as a separate sample of
teen members of Boys & Girls Clubs across the country**.  The Boys & Girls
Clubs sample included teens who had completed the Money Matters program, as
well as those who had not, and shows that the program is working.

"We are very encouraged by the fact that teens who have experienced Money
Matters demonstrate a firmer understanding of money management," said Judy J.
Pickens, senior vice president of program services, BGCA.  "The survey findings
reinforce our belief that with the right guidance, teens can get a great head
start toward a more financially sound future."

   Comparison of National Teen Sample with Money Matters Teen Sample

   --   Approximately one-third (31 percent) of Money Matters teens say they
        are extremely or very knowledgeable about how to manage debt versus
        17 percent of the national teen sample.
   --   Twenty-eight percent of the national teen sample say they are very
        or extremely knowledgeable about how to create a budget versus 40
        percent of Money Matters teens.
   --   Thirty-six percent of the national teen sample claim to be extremely
        or very knowledge about how to open a savings account compared to 50
        percent of the Money Matters teens.
   --   Only 25 percent of Money Matters teens say they are not very or not
        at all knowledgeable about how to balance a checkbook versus 35
        percent of the national teen sample.

  Personal Finance in the Home and School


More than two-thirds (67 percent) of teens believe their parents or guardians
should be most responsible for teaching them about money and how to manage it. 
But while most teens rely on their parents as their primary source of financial
guidance, 13 percent also look to their teachers for coaching on money
management.

Eighty percent of teens ages 13-18 believe the basics of money management
should be a requirement in high school.  Yet despite this overwhelming interest
from teens in personal finance education, only seven states -- Alabama,
Georgia, Idaho, Illinois, Kentucky, New York and Utah -- currently mandate that
students take a course on personal finance in order to graduate high school***.

"We find it alarming that only 33 percent of teens surveyed said they had
received any money management education in school, particularly in light of
research from Stanford University nearly a decade ago that showed that
requiring high school students to take a personal finance course leads them to
save more later in life," said Schwab Pomerantz,  "And while the federal
government is beginning to address the problem with the establishment of the
Financial Literacy and Education Commission, we believe organizations like ours
can also play an integral part in preparing the next generation for the
financial challenges they may face later in life."

Teens, for one, seem to think that Schwab and Boys & Girls Clubs of America are
on the right track.

Nearly half of teens surveyed (46 percent) feel a class or workshop in or out
of school would best help students learn the most about money management.
Thirty-six percent of teens indicate a conversation about money with their
parents or guardians would be most beneficial.

He's Hired!  Donald Trump Tops Teens' List of Financially Literate People in
America; Alan Greenspan is at the Bottom

Donald Trump need not worry about hearing those two words contestants on "The
Apprentice" have come to fear.  The majority of teens (41 percent) are more
inclined to tell Mr. Trump "you're hired" after declaring him the most
financially literate person in America.  Oprah Winfrey, with 25 percent of the
votes, ranked second.

Only nine percent of teens selected Federal Reserve Board Chairman Alan
Greenspan as the most financially literate person in America.  In fact, when
asked to identify Alan Greenspan, noteworthy   responses included:  "I think
he's some dude in D.C.," "he owns something big," and "he is a man with a lot
of money."  Of note, 21 percent of teens who had participated in the Money
Matters program   answered this question correctly versus seven percent in the
national teen sample.

About The Charles Schwab Foundation

Funded by The Charles Schwab Corporation (NYSE:SCH) Nasdaq, the Charles Schwab
Foundation is committed to giving back to the community by supporting
employee-selected causes and fostering financial literacy through funding,
involvement and expertise.

The Charles Schwab Corporation, through its operating subsidiaries, provides
securities brokerage and financial services to individual investors and the
independent investment advisors who work with them.  With over 7 million
individual investor accounts and more than $1 trillion in client assets, The
Charles Schwab Corporation is one of the nation's largest financial services
firms.  Its subsidiary Charles Schwab & Co., Inc. (member SIPC) provides a
complete range of investment services and products, including an extensive
selection of mutual funds; financial planning and investment advice; retirement
plans; referrals to independent fee-based investment advisors; and custodial,
operational and trading support for independent fee- based investment advisors
through its Schwab Institutional division.  Its subsidiary Charles Schwab Bank
(member FDIC) provides banking and mortgage services and  products.  The
corporation's other operating subsidiaries include U.S. Trust Corporation
(member FDIC) and CyberTrader(R), Inc. (member SIPC).  These companies' Web
sites can be reached at http://www.schwab.com/, http://www.schwabbank.com/,
http://www.ustrust.com/, and http://www.cybertrader.com/. (0405-7371)

Brokerage products:  Not FDIC insured.  No Bank Guarantee.  May Lose Value.

About Boys & Girls Clubs of America

Boys & Girls Clubs of America (http://www.bgca.org/) comprises a national
network of some 3,400 neighborhood-based facilities annually serving some 4
million young people, primarily from disadvantaged circumstances.  Known as
"The Positive Place for Kids," the Clubs provide guidance- oriented character
development programs on a daily basis for children and teens, 6-18 years old,
conducted by a full-time professional staff.  Key Boys & Girls Club programs
emphasize character and leadership development, education and career
enhancement, health and life skills, the arts, sports, fitness and recreation.

   *    The survey was conducted by Leflein Associates, Inc. using Computer
        Assisted Telephone Interviewing 3/9/05 through 3/13/05.  Telephone
        interviews were completed among a national listed sample of 500
        teens age 13 to 18, 250 males and 250 females.  Quotas were used by
        region to represent the actual distribution of the 24 million teens
        that are residing in the U.S. as reported by the U.S. census.  In
        addition, half the sample consisted of 13-15 year olds and half were
        16-18 years of age.  This study has a margin or error of plus or
        minus 4% at the 95% confidence level; while the margin of error for
        subgroups is higher.
   **   Boys & Girls Clubs of America's teen survey was conducted online
        from March 8-18, 2005.  The survey was completed by 1,389 Boys &
        Girls Club members ages 13-18, including 280 teen members who had
        participated in the Money Matters program.
   ***  2004 survey by the private National Council on Economic Education


DATASOURCE: Charles Schwab



CONTACT:  Stephanie Kannel of PT&Co., [phone], ext. 281, or

; or Sarah Bulgatz of Charles Schwab, [phone], or

; or Lindsey Edmondson of Boys & Girls Clubs of

America, [phone], or 



Web site:  http://www.schwab.com/ 

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