> Posted by John Gitau, CEO, Kenya Financial Education Centre

A year ago today, I lost a nephew, John Gachoka. He was 33 years old. As it is our tradition, my family met to make burial arrangements. We drew a tentative funeral budget of $1,870 all expenses inclusive.

John worked in a factory earning a salary of $94 a month ($3 a day). He lived with his family of four (wife and three small children, eldest aged 8) in a single room in a low-income neighborhood, rented for $10.58 a month. He belonged to the bottom of the pyramid.

Characteristic of the warmth that pervades people at the BoP, John’s colleagues joined his neighbors and they drew up a parallel funeral budget in consultation with John’s widow. We, as the larger family, were not aware of another budget until the third day when we joined the colleagues and neighbors meeting. It was time to develop one concrete program.

The chairperson of that committee gave me the budget they had drawn. It read a total of $635, all inclusive expenses, morgue to grave. The budget had all the components we as a family had listed, except that the figures were lower. For example, we had a budget of $295 for the coffin. Their budget for the same was $175. We had a food budget of $300 while theirs was $115. Correctly, they had a similar estimated attendance of 200 people, as we had.

This being a financial inclusion blog space, you must be wondering where a funeral comes in. Please bear with me. There is a grave financial management lesson herein.

The drama and lessons came from the reasoning exhibited in the course of harmonizing the two budgets. Let me pick a few elements that revealed how the poor think around values and money.

  1. The coffin price. We the family considered a nice looking coffin as a symbol of a decent send off. My nephew’s colleagues and neighbors argued that we can’t give ants in the grave a whole feast of $295 while John had left behind small children. I was shocked by that perspective – decency versus financial implications, my gosh!
  2. Food budget. They argued that our budget was just too high, since we were going for a funeral not a party. We should be thinking how much should be left over after the funeral for the young widow. We adopted their thin budget consisting of snacks as opposed to the elaborate menu we had designed.
  3. Transport. The family had a budget of $411 to hire a bus to ferry mourners. The committee endorsed it and said that, yes, that money would be set aside, but each mourner who would board it was to pay $7 on the spot. Nobody had any objection.

The two subsequent days that I joined that committee to raise funds, I was amazed by the unity and level of contribution. Most colleagues attended the meetings daily and neighbors contributed in kind by serving tea and bread.

After the burial, the chairman of the committee thanked everybody, and later that week he brought to the widow the balance after all expenses. I was very surprised because it was enough to take care of the house rent for three years and school fees for the small children for at least five years.

Foolish and educated, we the family, would have wasted a clear $1,235 ($1,870 minus $635) in a lavish funeral to appease our egos in the name of decent burial for our nephew. Indeed, the burial was not any less decent, and everything went as planned.

The poor may be poor but they have the basic logic around money that we in the next tier can easily miss as we get wasteful. It is perhaps important to remember this lesson when we go for conferences to discuss matters about the poor. Let us reflect on who makes money, the hotels, transporters, and perhaps such money can be used better for the course of the poor. It will be important to emulate the poor in money management, thrift, and economy, not necessarily driven by scarcity but by our reflection on the need to avoid wasting money.

John Gitau is an independent financial education consultant and trainer and is the CEO of Kenya Financial Education Centre, an independent centre that supports and promotes financial inclusion efforts among the Kenya poor living in low-income neighborhoods. He does that using his home grown financial literacy curriculum, Practical Financial Literacy Counseling (P-FLC) adopted from the Global Financial Education Program (GFEP) developed by Microfinance Opportunities, Citi Foundation, and Freedom from Hunger.

Image credit: aussiegal

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