Embed financial education in other programmes

Financial education programmes for your clients

Your target group is struggling to pay yearly expenses. Every year, most of them borrow from informal lenders to be able to pay for the school fees, and some of them also pull their children out of school. You organise a financial literacy workshop focusing on controlling expenses, reducing useless expenses and saving for goals like school fees. You run a budgeting game with various expenses to sort out between useful and less useful. The workshop goes well – participants are engaged. The discussion on expenses is lively. But, six months later, most families borrow to pay for the school fee. There is no tangible change. What happened? Did your workshop really address the issues faced by your target group? What are their real issues?

What’s the problem?

Let’s go back to your families. Understanding your clients’ situation in depth – not only moneywise but in general - is where your project starts: interview them to get their perception of their situation. But this is not enough. Encourage them to do a financial diary, i.e. noting down all their financial transactions. This will help detect issues that were not visible, or not mentioned in the interviews, in a more objective way. At this stage, be open-minded and try not to be influenced by the funding that your organisation may receive or by other projects you have run before. Look at the numbers with each family and analyse the findings together. Ensure that these numbers are kept confidentially. Let’s say smoking is a major issue in the community you work with; it shortens active and passive smokers’ lives (including not yet born children) and the financial diaries help assess its financial impact: both in cigarette purchase and the health expenses associated to smoking related diseases. These financial resources could be used for more productive expenses. At 30 cents a pack, the expense is around $110 a year which could pay a big part of the school fee. How come this expense was not discussed during the workshop? Maybe smokers did not really want to discuss that expense, or the 30 cents a day did not look as big as $110 a year, so they did not include them in their budget… which was then not realistic. Or participants did discuss about cigarettes but smokers logically and adamantly put them as a “need”, not a want.

Money is part of life

Spending patterns are not separate from life choices. Use the financial diaries to work out with your clients how different choices would impact their lives… and result in a different expense allocation and potentially reduce debt exposure and its cost. By involving your clients both in identifying the issues and finding out solutions, you have already addressed two major reasons why programmes fail: relevance and motivation. Besides you have shown that managing money is not something abstract, something for “richer” people… but managing money is about daily decisions that impact life.

One issue at a time

At this stage, you have a thorough analysis of the situation and your target group has identified some solutions. Focus on one major issue first. Why? Because that will make your programme and effort stronger. This is why the analysis is important too… you don’t want to focus on the wrong issue. Let’s say most of the families you work with would like to focus on smoking. As issues are perceived differently by each of us, and their complexity cannot be solved by one simple way, propose various ways to engage your clients to find their solutions. The issue may also be considered a problem for one member of the family (in our example, the passive smoker) but not the other (the active smoker) so proposing only one approach may exacerbate conflicts within families.  So, focus on one issue but through different angles.

What different approaches can you include?

Increased impact

The variety of approaches is more likely to trigger changes in more participants who all have various motivations and reasons. Because it is holistic, participants will be able to see the benefits in their lives. It is a more likely to have a tangible financial impact too because money issues are put into context… and other issues are considered through their financial angle as well. Financial education becomes what it should be: one of the tools to improve your clients’ lives and not a goal. Another benefit is that it will be easier to measure the impact of your programme: it is hard to measure financial education by itself, out of context. In our example, an indicator will be the number of people smoking and how much they used to spend before quitting then the same two indicators three, six or 12 months after you run the programme. The financial diaries give a strong back-up to your impact study: you can see whether cigarettes have moved from an everyday staple to zero and how families have reallocated the surplus.

Funding your programme

Besides, it may be hard to fundraise specifically for financial education – especially as most financial education programmes are linked or sponsored by financial institutions, it may be hard to avoid some form of financial product selling or marketing and your finance funders will consider financial literacy as a goal, not a tool, which makes sense to them as money is the product they sell. With such an embedded programme, your primary focus is health (in our example) –or whatever life issue your programme focuses on – and you fundraise or get a grant accordingly; you just enrich your programme with relevant financial education to tackle all the aspects of the issue and raise its success rate. By embedding financial education in a life issue, you also send a strong message to your clients: that money is a tool and not a goal in life.

Other ideas to embed financial education in other programmes

This approach can work with many major issues that most communities (whatever their income) face:  health issues such as diabetes, HIV, STD, mosquito-borne diseases, lung diseases due to kerosene lamps, etc…; nutrition, sanitation (building toilets, access to clean water; food safety…), gender-based violence – including financial oppression. Embedding the financial aspect of the issue (among all the other angles) will empower your target groups to find more practical and sustainable solutions, and your organisations better identify the relevant support. For people with irregular and very low income, time horizon is often one day- and some healthier behaviour may cost more in the short term before reaping longer term benefit (for example, the cost of paying for clean water, or buying a mosquito net, healthy food is often more expensive than junk food…) and they may not link a health expense to some decisions taken some time ago –showing the longer term financial impact can help motivate them to ‘invest’ or spend more today and secure a better future with fewer emergency or health related expenses. This is where financial education really empowers people take more thoughtful decisions.

Money is part of life: embed financial education in other programmes

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