Yet another exciting week is coming to an end here in Cusco! Our guest profes have left and we are back to our normal classes, despite the constant parades and celebrations filling the streets of Cusco on a daily basis. June is the anniversary of Cusco and they certainly make it known here with fireworks at all hours of the night and dancing and singing in elaborate costumes. But the excitement in the plaza isn’t all that is happening in Cusco! This week, GSW partnered with LAFF (Latin American Foundation for the Future) to implement a financial literacy workshop at Casa Mantay. We taught the girls about interest, credit and the importance of saving. Giving these girls the financial education they need will better prepare them to support themselves, their families and improve their future.
The morning began as usual. We arrived at Casa Mantay to an excited group of girls ready for the day’s activities! We set up our workshop in a small room as 8 girls slowly trickled in, not quite as excited to learn that we were preparing a financial literacy class rather than our usual sports lesson. But this is no boring finance workshop! This workshop is a monopoly-esk game in which the girls learn about the struggles of creating and owning their own business in a hands-on fashion. The game takes place over a one-month period in which the girls will be confronted by several real life challenges on a weekly basis. To start, we split the girls into 3 teams, each representing a family from a different area around Cusco. Each team was given a loan of 200 soles at the beginning of the month that would need to be paid back with interest at the end of the month. Throughout the month, the groups created and sold innovative products allowing them to feed their hypothetical families as well as pay rent, unexpected medical expenses and school supplies. One team even got robbed of all of their savings because they hid them in their home rather than in the bank!
As the first two weeks went by, the girls became more and more competitive! Not only did they learn about planning their finances for the month, but they practiced their abilities to negotiate. Each month after the groups created their product, they had to sell it to Sandra, a local business owner. The first week, all of the groups were happy with the 80 soles that Sandra offered them for each of their products, but the second week they learned that Sandra, a.k.a. Carly, was a bit of a softy. They began their negotiations at 900 soles and were able to weasel a couple hundred out of Sandra. Marta, another business owner who only buys on credit, entered the market on the third week and the girls learned a bit about what it is like to buy from someone without the 100% guarantee that they will be paid in full in the future. Marta, a.k.a. me, only paid one of the groups in full while the other 2 were paid half of what they were owed a week later.
The last week of the month was by far the hardest. Rent was due as well as the 200 soles that the bank lent them at the beginning of the month, plus 50 soles of interest. Most groups ended up taking more loans from the bank to pay rent on time and then negotiating even harder with Sandra to be able to pay back their original loans as well as the new ones. At the end of the month, one group broke even, one group made 85 soles and the winning group made 90 soles!
Before we began the workshop, we asked the girls to evaluate themselves and determine what financial approach they believe is best. They had a hard time understanding that the smartest approach is not necessarily to save everything. Understanding that the more products that they created meant the more money they brought in was a difficult concept for them. At the end of the game, they finally began to realize that simply saving their money would not allow them to have enough at the end of the month to pay their rent and the loans plus interest they owed to the bank. They all concluded that saving is important, but there needs to be a balance between saving, spending on their business and family expenses.
The workshop was definitely a successful and fun way to teach financial education and we hope to continue this partnership with LAFF in the future!