Too many families believe they can’t move past financial struggles

We must shift this mindset. Here’s how.

What It's Worth
What It’s Worth


I consider myself fortunate to do what I do: crafting and executing the Citi Foundation’s philanthropic strategy to support the economic needs of low-income communities. I get to look out and see how we can help make our cities better and more inclusive. This requires having a clear view of the economic and societal problems we face and, equally as important, an understanding of the psychological toll those problems have on families and communities.

In both professional and personal conversations, I’ve noticed that many parents are no longer confident in a brighter future for their children. That’s not just my observation. In a recent NBC News online poll, nearly 60 percent of Americans said that today’s children in the United States will grow up to be worse off than they are.

How can that be, when the economy is showing concrete signs of rebounding? What’s so different today verses prior economic downturns that our belief in the American dream, once unwavering, is at risk?

I think the answer lies in a widespread feeling of persistent vulnerability.

Today, many people are living their lives day to day. They struggle to pay their bills and meet their families’ needs every day, over months and over years. They don’t live their lives in a straight line, either — there are ups and downs, challenges, and sometimes, unexpected emergencies.

While these problems manifest themselves on a deeply personal level, they are tied to the health of the entire U.S. economy. In fact (and here’s my plug) a new book, released this week, What It’s Worth: Strengthening the Financial Future of Families, Communities and the Nation delves into why the financial health of every household matters for the U.S. economy. The essays contained in the book provide evidence that too many families do not believe they can move beyond their current financial struggles, and those sentiments both reflect and further impact their communities. We need to shift that mindset.

By “we,” I mean policymakers, the financial services industry, employers, tech developers, the health and social services sector, educators, advocates, researchers and philanthropists. There is a role for all of us to play here. This is an issue that is complex and multi-dimensional, and the only way to make progress is by working together to test and scale new approaches, programs and partnerships aimed at addressing the core problems, not treating their symptoms.

“We” can help shift that mindset if we think holistically and try to integrate improved financial health efforts into a range of policies and initiatives.

For example, state and local governments could “bundle” financial education and coaching services for programs that provide employment and income support services. Or financial capability services could be integrated into services for homelessness prevention, public housing, education and welfare.

There should also be incentives for households to develop long-term assets for themselves. Matched savings accounts supplement household savings toward a specific goal, such as home ownership, a higher education degree, or small business ownership with funds from private and public sources to help support their dreams.

To help households better manage their financial lives, “we” need to take a long-term, systems-level approach that considers not only how to get people to start saving or improve their credit scores, but also how to restore their optimism and strengthen their natural resilience.

And “we” must not lose sight of the bigger picture: clearing obstacles to make a pathway for upward mobility.

These solutions, and many others that are already happening across the country, are making a real difference in the lives of real people. I’m reinvigorated by the motivation, confidence and financial progress of individuals who have participated in Citi Foundation-funded financial capability programs. A 2012 graduate from one of these programs said to her classmates, “I learned that I am worth it.” She described how she had previously survived on payday lenders and emergency loans from increasingly exasperated family members. She had maxed out her credit cards and had overdrawn her accounts. That student continued:

I felt I owed myself that shopping spree because of the stress and the bills… At the root of it all, I was afraid to face my ugly financial situation… and I had a fear [going into the coaching program] about how I would be perceived. [My coach] made it all bearable; she was gracious the entire year. [I learned that] there are no easy answers, that I must make healthy financial decisions whether I have enough money or not. I now have a significant amount of savings to put towards a down payment on a home.

That young woman inspires me and keeps me focused. When I think of her, I know that by redoubling our efforts on solutions to help secure financial stability, we really can help put more Americans on a pathway to financial freedom.

By Brandee McHale, President, Citi Foundation

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What It's Worth
What It’s Worth

Highlighting creativity and innovation that put families on the path to financial well-being and strengthen the financial future for all of us.