Everybody learns to manage money but not everybody manages it well. Some live hand to mouth focused only on making ends meet on a day-to-day basis. Others look ahead trying to prepare for unforeseen events or irregular demands such as school fees by setting some income aside as savings. Entrepreneurs have to ensure they can purchase inputs and meet other business expenses from their incomes in addition to meeting family demands. So learning to manage money well is an important skill. It often involves changing behaviour, shifting from reactive to proactive decision-making and learning ways to plan, analyse and control household and business finances. Limitations in literacy and numeracy, coupled with a lack of access to financial services, can make acquiring these skills difficult for small scale farmers in developing countries, but they are vitally important.
This series of booklets has been specifically designed for use with farmer discussion groups, study circles or field schools. The idea is to promote a philosophy of “Talking about Money” as opposed to the traditional assumption that all small farmers need to improve their lives is credit. Taking a loan without understanding your cash flow, evaluating your risks and being able to monitor your progress is a recipe for failure in terms of money management. A more holistic approach is needed particularly now that more and more financial service providers are reaching down to the low income market and new technology is creating unprecedented opportunities for rural communities to access financial services.
“Talking about Money” is about financial education; helping people to recognise the importance of regular saving and thoughtful expenditure; showing them how to calculate costs and profit margins and work out cash flow plans; ensuring that they understand the role and potential of financial service providers and the products they have on offer; and ensuring that they have the confidence to use these services and ask the right questions, for example, with regard to insurance, bank accounts or interest rates.
Each of these booklets has been written in a style which should enable agricultural field workers to use them without any special training (provided they are in a language which can be read by the user). They are small enough to be carried in the field and are divided into short sections with questions or exercises at the end of each section to promote involvement and discussion. Some activities can be carried out with non-literate participants but, in the end, you cannot go far with money management unless you can write numbers and make simple arithmetic calculations. It is recommended that farmers are shown how to use simple calculators which can be bought cheaply and also will become increasingly available on mobile phones.
The figures used in the books are largely fictitious and should not be taken as representative of any particular currency at any given point in time. The $ symbol is used simply as a generic money symbol. If the book is being translated for a specific local context, the figures can be replaced with appropriate amounts in the local currency as long as the arithmetic remains simple.