Explaining Cash Flow and Savings

This is the first booklet in a series called “Talking about Money”. It is designed for use by study circles, discussion groups or farmer field schools and can also be used by extension workers in their regular advisory work with groups or individuals.

The ability to adopt or introduce changes to agricultural production methods and non-farm enterprises depends on the availability of money. It is, therefore, very important for farmers to be able to think carefully about their financial circumstances. Predicting costs, prices, profit margins and cash flow patterns is vital for planning and decision-making and the poorer the farmer, the more important it is.

These concepts need to be explained in a way which small scale, possibly illiterate, farmers can understand. The “Talking About Money” booklets aim to introduce financial topics to farmers using a variety of tools, some of which can be used even when people are not able to read or write. The concepts are intended to provoke discussion and be used in a participatory manner.

The emphasis in this first booklet is on savings and how essential it is for everyone to be able to set aside money for future use. Cash flow patterns produced with or without numbers are introduced as a vital tool for someone to take stock of their current situation and determine when and how much they could expect to save over the course of a typical year. The final section looks briefly at alternative methods of saving and the role of financial service providers.

Copies of all the forms used in the booklet are made available here as downloadable word documents or excel spreadsheets. These can then be printed out in whatever numbers are required.

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