📖 Chapter 7 of 11 · Smart Money Basic (Multi Indian Language) · Class 4–7
Chapter 6 · Budgeting Your Pocket Money
Every month you may receive some pocket money — maybe ₹100, maybe ₹500, maybe even more on festivals. Have you noticed how it disappears even before the month ends? That is because without a plan, money slips away like water through fingers. The plan is called a budget.
Key Word
A BUDGET is a simple plan that decides where each rupee will go, before you spend it.
The simple 50-30-20 plan
A smart and easy way to budget your pocket money is the 50–30–20 plan: 50% of your money goes into savings, 30% goes towards spending on small wants (a snack, a comic), and 20% goes to sharing — giving, helping or gifting.
Story Time — A Diwali Budget
The Patel twins · Ahmedabad, Gujarat
The Patel twins of Ahmedabad — Riya and Rohan — received ₹2,000 each from their grandparents for Diwali. That is a huge amount for any eleven-year-old!
Rohan was excited. “I'm going to buy the new cricket bat for ₹1,800, and the rest I will spend on crackers.” Riya thought differently. She took out a small notebook and wrote: Save ₹1,000 (50%) into my bank account; Spend ₹600 (30%) on a diya set and a small outfit; Share ₹400 (20%) on sweets and gifts for our house help's children.
A month later, Rohan's cricket bat had a crack in it, and he had no money to fix it. Riya, on the other hand, had a new outfit, the happy memory of giving to others, AND ₹1,000 quietly growing in her bank account. “Maybe next year,” Rohan grinned, “I will budget like you.”
Solved Examples
Think first, then read the answer!
1. Anika gets ₹400 a month. Using the 50-30-20 plan, how much should she save, spend and share?
Show answer
Answer: Save = 50% of ₹400 = ₹200. Spend = 30% of ₹400 = ₹120. Share = 20% of ₹400 = ₹80. Check: ₹200 + ₹120 + ₹80 = ₹400. ✓
2. Rohan received ₹2,000 but spent ₹1,800 on a single item. What percentage did he spend on one item? Was it wise?
Show answer
Answer: Percentage = (1800 ÷ 2000) × 100 = 90%. He spent 90% on one thing, leaving only 10% for everything else — not wise, because there is nothing left for savings or emergencies.
3. Riya saved ₹1,000 in October. If she saves ₹1,000 a month for 6 months, how much will she have?
Show answer
Answer: Total = ₹1,000 × 6 = ₹6,000 — enough for a small holiday or a really good gift!
4. A student gets ₹500 and needs ₹150 for stationery (a NEED). Apply 50-30-20 to what is left.
Show answer
Answer: Money left after needs = ₹500 − ₹150 = ₹350. Save = ₹175, Spend = ₹105, Share = ₹70. Always pay needs FIRST, then apply 50-30-20 to the remainder!
Check Your Understanding
Q1. What is a budget? Why is it useful?
Q2. Explain the 50-30-20 plan in your own words.
Q3. Roshan gets ₹800 a month. He needs ₹100 for bus tickets. Apply the 50-30-20 plan to the rest.
Q4. In Riya's Diwali story, what fraction of her gift money did she SAVE?
Q5. Why did Rohan run out of money? What rule of budgeting did he break?
Q6. Make a budget for your own pocket money this month, in three columns: Save, Spend, Share.
Check your understanding — Chapter 6
Tap an answer to check it instantly. These are for practice — nothing is saved or sent.
Q1. What is a budget?
- A plan for where each rupee will go before you spend it
- A type of bank note
- A shop that sells cheap things
Show answer
A. A plan for where each rupee will go before you spend it
Q2. In the 50-30-20 plan, how much do you SAVE?
- 20%
- 50%
- 30%
Show answer
B. 50%
Q3. Why did Rohan run out of money?
- He spent almost everything on one item, with no plan
- He saved too much
Show answer
A. He spent almost everything on one item, with no plan
✎ Activity
For 30 days, write down every rupee you spend in a small notebook. At the end of the month, total each kind of spending — snacks, books, sweets, gifts, savings. You will be amazed at what you discover!