Session 1: Money Basics
Before we start
Money is part of everyday life. We use it for food, travel, phone recharge, clothes, and many small things. Some spending is necessary. Some spending is only for comfort or enjoyment. This session helps us understand that difference and gives us a simple tool to manage money better.
Session objective
By the end of this session, you will be able to:
Tell the difference between needs and wants, Use the 50-30-20 rule, Try one simple budget on your own.
A small story
Ravi is 17 years old and stays in a Child Care Institution. One day, he gets ₹500 from a short training programme. He feels happy and wants to spend it quickly. He thinks of ordering food, buying earphones, and keeping nothing for later. Then a staff member asks him a simple question. "If this money finishes today, what will you do next week?" Ravi stops and thinks. He realises money goes faster than it comes. He decides to split it properly. A little for what he needs, a little for what he wants, and some for saving. That is what this session is about.
Part 1: Needs and wants
| Needs | Wants |
|---|---|
| Things we must have to live and function well | Things we like to have but can manage without |
| Example: food, rent, medicine, travel for school or work | Example: movies, fast food, shopping, extra gadgets |
Instructions: Put each item in the correct column.
| Item | Need or Want |
|---|---|
| Rice and vegetables | |
| Movie ticket | |
| Bus fare to work | |
| New shoes for style | |
| Electricity bill | |
| Mobile game top-up | |
| Medicine | |
| Café visit |
50-30-20 Examples
If the monthly income is 100:
| Part | Use | What it covers |
|---|---|---|
| 50% | Needs | Rent, food, transport, medicine, EMIs, insurance |
| 30% | Wants | Movies, shopping, eating out, hobbies |
| 20% | Savings | Emergency fund, future goals, investments |
50-30-20 Examples
If the monthly income is 100:
| Category | Calculation | Amount |
|---|---|---|
| Needs | 50% of 100 | ₹50 |
| Wants | 30% of 100 | ₹30 |
| Savings | 20% of 100 | ₹20 |
| Total | 50 + 30 + 20 | ₹100 |
Instructions: Now fill this yourself using the 100 income example.
| Category | Calculation | Amount |
|---|---|---|
| Needs | 50% of 100 | |
| Wants | 30% of 100 | |
| Savings | 20% of 100 | |
| Total |
Budgeting for 18,000 Income
If the monthly income is 18,000:
| Category | Calculation | Amount | Example use |
|---|---|---|---|
| Needs | 50% of 18,000 | ₹9,000 | Rent, food, transport, medicine |
| Wants | 30% of 18,000 | ₹5,400 | Movies, shopping, eating out |
| Savings | 20% of 18,000 | ₹3,600 | Emergency fund, future goal |
| Total | ₹18,000 |
Instructions: If the monthly income is 18,000, complete the table.
| Category | Calculation | Amount |
|---|---|---|
| Needs | 50% of 18,000 | |
| Wants | 30% of 18,000 | |
| Savings | 20% of 18,000 | |
| Total |
Budgeting for 12,500 Income
Filled example for 12,500:
| Category | Calculation | Amount |
|---|---|---|
| Needs | 50% of 12,500 | ₹6,250 |
| Wants | 30% of 12,500 | ₹3,750 |
| Savings | 20% of 12,500 | ₹2,500 |
| Total | 6,250 + 3,750 + 2,500 | ₹12,500 |
Instructions: Fill this one yourself for an income of 12,500.
| Category | Calculation | Amount |
|---|---|---|
| Needs | 50% of 12,500 | |
| Wants | 30% of 12,500 | |
| Savings | 20% of 12,500 | |
| Total |
Reflection
Which one feels easier to manage, needs or wants?
Which one is more difficult to control?
What is one thing you would like to save for?
Quick Recap
| Topic | Key Takeaway |
|---|---|
| Needs vs Wants | Understand what is essential for living versus what is for comfort. |
| 50-30-20 Rule | A simple guide to split income: 50% Needs, 30% Wants, 20% Savings. |
One line to remember
Plan your spending so your money works for you.
Closing thought
Money planning does not need to be difficult. Even a small step can help us feel more in control.