> Posted by Center Staff
What is “money management”? And how is it significant for low income individuals? In a recent blog post on Huffington Post, CFI’s Managing Director, Elisabeth Rhyne, tackles these important questions and discusses their implications for providing effective financial tools and services to the poor.
The post begins:
It’s traditional for bankers and their customers to think about banking as centered on the bank account. Even policy makers talk about “banking the unbanked” as if opening a bank account immediately changes a person from financially excluded to included. The bank account is the top line indicator examined by the Global Findex, the new survey of financial access by 150,000 adults from over 148 countries. The finding that 43 percent of adults in the developing world have bank accounts has quickly become the reference point for financial inclusion.
For decades, balancing one’s checkbook has been the cornerstone of personal finance for conscientious adults in the developed world. When I first opened an account of my own, I received a little checkbook-sized booklet in which to write down every deposit and withdrawal. I learned that keeping track of the bank balance was like the personal hygiene of finance, like brushing your financial teeth.
The implicit message, not just for me, but I think for society at large, was that the bank account was the locus of money management. All one’s main financial transactions would pass through the account, and the account would serve as a kind of running financial statement, showing not only income and expenses but also personal solvency. (I’m setting aside for now the very important function of accounts as savings vehicles. That’s a story for another day.)
To read more of this piece on Huffington Post, please click here.
Image Credit: londonrelocationservices.com
Have you read?
Financial Capability: Not Many Answers, but Lots of Great Questions
The Secret (Financial) Lives of Rural Residents – What Every Market Researcher Needs to Know
Tapping into the Potential of the Unbanked in the DRC