the friend online
18 July 2008

Tackling financial exclusion

Esther de Jong, a research analyst at New Philanthropy Capital, explores how Quaker Social Action helps families take back financial control of their lives

You may not think that tasting Jaffa cakes and orange juice has much to do with learning how to manage money. But these 'blind-tasting' sessions, where families compare 'no frills' products with more expensive brand names, are part of an innovative financial education project run by the east London charity, Quaker Social Action.

The project, 'Made of Money?', teaches disadvantaged families how to budget, gives money-saving tips, and shows parents ways of resisting pester power when they are out shopping with their children. This is no mundane classroom-style education. It is interactive and full of practical advice. It includes creative ways to help people grapple with consumption choices and advertising pressures. As well as blind-tasting sessions, there are role plays and sessions on how to budget for and cook pizza from scratch.

'Made of Money?' is highlighted in a new report from New Philanthropy Capital (NPC) – a charity that helps donors understand how to make the greatest difference to people's lives. NPC produces independent research and tailored advice on the most effective and rewarding ways to support charities. Its latest report, Short changed, shows donors how they can help to tackle financial exclusion.

One recommendation from Short changed is that donors invest in engaging and well-targeted financial education, which can prevent and minimise financial exclusion. Here, Quaker Social Action's 'Made of Money?' stands out from many other courses in the UK. As well as being creative and interesting, it has a distinctive focus on the social and psychological aspects of money. Financial habits are learned and reinforced by the behaviour of family and friends – if parents do not have a bank account and borrow from doorstep lenders, children are likely to follow in their footsteps. So 'Made of Money?' gathers families together, helps them to change bad habits, and shows them how to communicate about money.

But why do people need these classes? We all need skills, knowledge, confidence and motivation to make the most of our money, avoid financial problems and work our way out of financial trouble. In the face of the credit crunch, sophisticated financial services, and growing personal financial responsibility (for example, for education and retirement), the need to be financially capable is stronger than ever before.

Lack of financial capability is one cause of financial exclusion, which occurs when people cannot or do not access and use appropriate financial products and services. Whether people are excluded through personal choice, lack of documentation or discrimination, it can make living on a low income even harder than it already is. Financial exclusion makes life more expensive, more unstable and more stressful. For example, for the two million people without bank accounts, it is more expensive to pay bills. And the three million people who find it a constant struggle to keep up with credit commitments may face mental health problems, family breakdown or even homelessness.

But for many people, financial exclusion can be overcome or even avoided. With the right support, people can make the most of the financial services available to them and make the most of their money.

NPC's research into financial exclusion shows that poverty and financial exclusion do not just affect wallets: they also affect relationships, health and dignity. Confidence and attitude are just as important as knowledge and skills, and addressing these side by side means that change is much more likely to take root in people's lives. As a result of 'Made of Money?', families are communicating more openly about money and they are more confident and in control of their finances.

Short changed and NPC's charity recommendations are available from New Philanthropy Capital

Other links
Quaker Social Action
Quaker Social Action wins another award the Friend, 27 June 2008.
A year of 'knees-ups' in the East End the Friend, 20 June 2008.
Preparing for the inevitable by Judith Moran the Friend, 22 February 2008.
Banking on building communities the Friend, 4 January 2008.

The Friend provides fresh insight with news about and of interest to Quakers every week, in depth thought and reasoning through our comment, opinion and analysis pages, features that bring vibrancy to Quakerism, as well as reviews and arts pages that add to Quaker culture. Subscribe here.

Esther de Jong


This week's .pdf
In this week's online edition... rss edition
Quaker charity leads the way in tackling financial exclusion
Tough times for war resisters in Canada despite parliament’s help
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FUM Triennial news
Oliver Robertson
Scottish government says no to Circles
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Challenging consumerism
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Mary Barnes & Ann Frost

The power of microcredit
Jennifer Kavanagh
Tackling financial exclusion
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A house of cards
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A selfish gene?
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With Friends like these
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Is there a gap?
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