Session 3: Making a Budget

Before we start

In Session 1, we learned about earning money. Now let us see how to use that money wisely. A budget is a simple plan for money. It helps us decide in advance where our money should go, so that we are not left wondering where it all went at the end of the month.

Session objective

By the end of this session, you will be able to:

Understand what a budget is, Divide monthly income into different expense categories, Make a simple monthly budget for yourself.

A small story

Meena is 18 years old and has just started a small job after training. She gets ₹20,000 in a month. At first, she feels the money is more than enough for everything. But after a few days, she notices something. She spends a little here, a little there, and by the middle of the month, the money becomes tight. She wonders where it all went. Then someone helps her make a budget. She writes down what is needed, what is wanted, and what should be saved. Suddenly, the money starts making more sense. That is the power of a budget.

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Part 1: What is a budget?

A budget is a simple plan for money. It helps us: know how much money is coming in, know how much money is going out, avoid unnecessary spending, save for future needs.

Quick note: A budget does not mean stopping all spending. It means spending with care.

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Part 2: Budgeting with the 50-30-20 rule

Filled example if the monthly income is 20,000:

Instructions: If the monthly income is 20,000, complete the table below.

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Part 3: A detailed monthly budget

Now let us go one step further. A budget is not only about broad categories. It also means writing actual expenses category by category.

Filled example:

Instructions: Make your own detailed budget. If you had 20,000 for a month, how would you plan it across categories?

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Part 4: What if money is less?

Sometimes money is not enough for everything we want. That is normal. In such a case, we must choose carefully.

Quick example:

You have 300. You want to buy snacks, recharge your phone, and keep some money aside. What comes first? Phone recharge comes first if it is needed for communication and work. A small amount for food if necessary. Then whatever is left can be saved.

Instructions: Choose the priority option for each situation and explain your choice.

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Reflection

Which expense is easiest to forget?

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Which one usually becomes bigger than expected?

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What is one small expense you can reduce this month?

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Quick Recap

One line to remember

A budget tells your money where to go instead of wondering where it went.

Closing thought

A budget is not only a money sheet. It is a habit. The more we practise it, the easier it becomes. Even a small budget can give us more control, less stress, and better planning.