In the modern world, any service and product can be easily bought for money; both with cash and credit. Earning and spending money has long been a regular part of life and many of us rarely go a day without purchasing something. Understanding and being able to effectively manage our finances, ensuring that our expenses do not outgrow our earnings, is a difficult skill to learn. However, when one is able to master it, the potential to grow is exponential.
Unfortunately, not everyone has the ability to sit down and learn. Many Russians living in rural parts of the country live paycheck to paycheck. Their schedules are packed full of activities, ranging from growing their own food, taking care of children and grandchildren, remodeling and adding on to their homes, and managing their businesses. Russia is not alone—across the G20, the average grade (out of 21) for financial literacy is 12.7 points.
The work GEN does in Siberia empowers women to make knowledge-based financial decisions. There are many key areas where our organization works to overcome the remnants of the socialist past. In the West, children are taught from an early age to think in the context of a free-market economy. This mentality is radically different from the collectivistic society established in Russia. The last thirty years of capitalism in Russia is barely enough to even begin changing the perceptions of the masses. It goes without saying that in these thirty years, the country has gone through four major economic crises, all of which have affected the citizens.
It may be tempting to place the responsibility for solving these issues on the government or officials, instead of considering the intricacies of the system. First, citizens need to understand their civil rights and economic foundations, then, they can learn financial planning and develop a positive relationship with creditors.
In recent years, more and more people have fallen victim to “get rich quick” schemes. They invest in pyramid schemes and get burned, becoming wary of legitimate opportunities—including stock and government investing. Many families lost everything during the fall of the Soviet Union, so the distrust of banking systems runs rampant. Even more so, people avoid “complicated” opportunities that involve legal paperwork and preliminary investments. Regardless, there are always those looking for the next opportunity to make it big. They “invest” in high-risk, high-reward ideas and then find themselves in the red.
One of the programs we have developed takes into account the low income levels of the populations we serve in Southern Siberia. When there is little, or no, discretionary income, it is difficult to engage with people, encouraging them to save or invest. This program encourages our project participants to use their skills for the betterment of the society. GEN works with women to develop a business plan and then helps execute it within the community, filling a need inside and outside the home.
A financially literate person understands money and the economic interdependencies of their actions. It is easy to take advantage of desperate and uninformed people. By helping women raise, keep, and reinvest capital, Girls Education Nation is helping cultivate a new generation of financially literate citizens.