Without a solid foundation of financial literacy, small family businesses are destined to fail. Studies have shown the more financially literate and educated people are, the greater their capacity to save money. In fact, financial literacy has been identified as one of the driving factors behind lifting women out of poverty.
CCT’s Family Finance officers begin financial literacy coaching with a focus on mindset change. This coaching is based on the psychological phenomenon of the scarcity mindset. When you have scarcity it creates a mindset that leads to certain behaviours which, in the short term, help you manage scarcity but in the long term, only make matters worse.
Families are coached on topics like budgeting, making smart purchases, managing expenses, avoiding and solving debt, savings planning and goal setting. This coaching teaches families how to look beyond their immediate needs and desires and empowers them to build their own self-sustaining and sustainable futures. Many families are able to increase their net income simply through reducing their expenses.
When financial literacy coaching is provided alongside income generation initiatives, families have the knowledge and skillset required to build robust businesses and generate a secure and stable income.
The importance of financial education – Savern’s Story
Many of the families CCT work with are led by women who are solely responsible for their family’s finances.
Savern is one of the most successful business owners in her village. After helping Savern‘s daughter access life-changing healthcare, CCT’s family finance team began coaching her in financial literacy and helped her identify her own financial goals. CCT and Savern worked together to establish a small vegetable farm on her property.
Since then, Savern has gone from strength to strength and has expanded her business to include raising chickens. Savern’s farm is so successful that she will soon begin running financial literacy workshops for other families in her village.