Monday, April 2, 2012

Personal Finance Course Part II: Budgeting

Last Wednesday I taught the second part of a Personal Finance course I developed.

Reading through fellow volunteers materials for similar courses, I realized how necessary it was to tailor the course to the backgrounds and needs of my own students. Luckily I found many resources available: ACCION USA (which has great materials in Spanish), BAC/CREDOMATIC Network and From Poverty to Prosperity.

Looking over some daily tips for decreasing
expenses to meet our budget and goals.
The best tips came from the women themselves!

Because of my student’s diverse access and experience in formal education, and general knowledge in financial education, I developed a course using newspaper articles, family/community examples and hands on practice filling out financial goals, plans and budget sheets.

We started our second class with an article from the Costa Rican newspaper La Nacion, it was an op-ed from the beginning of the year highlighting small changes that we can make in our daily lives in order to end the year more tranquilo about our finances.
Three steps to a writing a budget. 

After reviewing our financial goals and plans from last class, we entered into making a personal budget. Their homework had been to take some notes about all their gastos (expenses) and ingresos (income) in a month. We got into all the different expenses a household can have- from pet expenses to prescriptions, and compared the differences between families with young children and senoras with their kids grown, but their grandkids still around. Despite the variety in family size, all the women agreed the biggest expense was food.
This led us into a dynamic discussion about various practical ways to lower expenses. I shared with them a list of around 30 items, but I found the most important tips came from the women themselves.

One tip was to never bring kids or grandkids to the market; one grandmother admitted to always buying her granddaughter a doll whenever they went to the store together.

Another woman, Sidey shared that she kept two piggy banks at home, one that she could never touch which was for big emergencies, and another that was for weekly unanticipated needs, such as the school asking for even more collaboration from the parents.

She shared that she literally had no money left for the week to send her daughter to school with, but luckily she had 5.000 colones ($10) in the one piggy bank.

We discussed that this course really wasn’t a band-aid solution to their financial woes, but it was the seed that would help them start putting in practice some of the tips to feel more comfortable at the end of each month and reach their goals of continuing businesses or starting new businesses.

From their evaluations, I found that they each walked away with a handful of ways to save more, recognition of their expenses and income and techniques to reach their goals through daily changes. However, many wanted more time spent on budgeting and more sessions offered.
Sample Budget

 I will hopefully be able to give a follow-up workshop in my last week, to see which (if any) tips are being put into practice, and give another review of creating a budget that works for them and their financial goals.