> 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.
- 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!
- 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.
- 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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July 22, 2014 at 12:21 pm
Joshua Goldstein
John, this is a very thoughtful piece and make a compelling case that the poor community often knows how to use their limited resources better than well meaning outsiders. An important reminder for all of us in international development work to listen carefully and avoid hubris. Belated condolences on your loss. Thanks, Josh
July 22, 2014 at 3:19 pm
James Militzer
Great post, John. But I wonder if a typical family in Kenya views it the way your nephew’s colleagues and neighbors do, or if they’re more likely to splurge on this kind of event.
I’ve read about the high costs of funerals (and weddings, festivals and other events) in BoP countries. Seen from a practical standpoint, it doesn’t make sense to me for people to spend any significant amount of money on events of any sort, when they have so many more pressing needs to consider. But is there a social value that motivates these seemingly wasteful expenses that I’m overlooking? Or maybe something related to Ignacio Mas’ liquidity farming concept?
(Also, my condolences on the loss of your nephew.)
July 23, 2014 at 5:21 am
John Gitau
Thanks Josh. Such occurrences teach us humility and awareness that, when we are open minded, we can pick useful lessons from every event.
James, you don’t need to go far searching for a typical family. Ours is/was one. The irony couldn’t have been more dramatic with me, a practical financial literacy teacher, being in the mix. To say I was humbled is being modest; the right word is humiliated. And I might as well represent us- the financial inclusion fraternity.
I wish we can be students and learn money management from the poor before we start recommending what is good for them. My family might as well have gone back to our comforts after the funeral but John’s colleagues saw far ahead. They had an instinctive mindset to mop every bit of liquidity from the funeral event so that his children can at lease have a roof over their heads for some years ahead while remaining in school as their mother figures out how to fed for them.
The poor, much as they may want to, can’t afford excesses. They hardly have enough, leave alone extra to splurge. Wastefulness might not be seen by its victims but by others with hardly anything to waste. My nephew’s colleagues may have been shocked by our suggested ‘extravagance’. But if you asked me why we wanted to spend lavishly, I would likely have said the budget was the little we could manage. We only learned it would have been lavish when much less was spent with the same desired accomplishment, with residue being put into far better use( the king knew he was well clad until the little girl pointed out his nakedness).
But while we are at it, James, suppose one of our needs as family was to be seen as responsible and caring? We may not have intended any show off. So, as you say ” It doesn’t make sense for people to spend any significant amount of money on events of any sort, when they have so many more pressing needs to consider”, many questions crop up. Which people? How much is significant amount? who defines importance of events? Who defines pressing needs? There may not be suitable answers. My family might have just felt mean with the budget we drew. But John’s colleagues may have thought we were out of our minds to suggest such a budget. John was at the level of $3 per day. Those poorer than him and living in further lower income neighborhoods would have found John’s colleagues budget ridiculously high.
In the absence of answers, I would suggest that the best is to have an open mind and learn from every event we encounter, how to take care of money, however much or little is possessed. That way, we become fit to hold a candle to the poor.