The power of budgeting: A simple guide to managing money for teenagers

1.What is a budget?

A budget is a plan that helps you manage your money. You decide in advance how you'll use it for your needs and your enjoyment. Just like a cricket team plans how to score runs, your budget helps you plan how you will use your pocket money.

• It’s a financial plan.
• A tool to track income and expenses.
• A roadmap for your spending goals.
• A way to control your cash flow.

2.How does it work?

If you receive Rs.2,500 each month as pocket money, that’s your income.
You need to plan how you are going to use it:
Needs: Stationery essentials, printing, or project materials
Fun: School snacks or outings with friends

Saving for a goal: Setting aside money for a school trip Instead of asking “Where did my money disappear?” you know exactly where it went.

3.The Teen 70/20/10 budget rule

If you receive Rs.2,500 a month, try this:
70% Needs:Rs.1,750
20% Fun:Rs.500
10% Savings and emergency fund:Rs.250
A budget doesn’t tie you down; it gives you the freedom to spend guilt-free because you have a plan in place.

4.Why you need budgeting?

• It prepares you for real life: You learn to plan and prioritise before you spend
• Stops impulse buys: Passing trends don't get to empty your wallet
• Builds independence: You don't have to ask your parents for every little thing
• Teaches patience: Saving up for new shoes or that gadget makes them feel earned

5.Money challenge

• Start by writing down how much pocket money you get every week or month.
• Divide your allowance into three parts:

Spend – for your needs
Spend – for fun
Save – for future goals

• Review your budget.

Check if you saved and spent, as planned. Analyse your mistakes—like overspending on snacks—and adjust your targets, because budgets get better with practice.

• You have officially built and analysed your very first budget!

Money fact

A student might budget Rs.2,500 a month, while a government manages trillions of rupees at the start of each year. The amount is different, but the questions are the same:

• How much money is available?
• Calculate from all sources.
• What are the priorities?
• Schools, hospitals, roads, transport, defence and public safety?
• How much should be saved/ borrowed?
• What can wait until later?