Organiser: Project Noor (Teach For India)
Event Details: 28 Feb 2021 (Phase 2, Session 2)
Session Topic: Introduction to Budgeting
Participants: 18 Mothers from Delhi
Hosts (TFI): Partha Dey and Priyanuj Sharma
Finance Coach: CA. Sanchit Jain
Session Warm-up: Know what you know?
We began the session with questions to the participants:
1. Do you know what was the total spending for the last month?
A few participants responded that they didn’t really bother themselves with the finances. Their husband took care of the money part. Whenever they had any requirement, they simply tell their husband and he fulfils it. For example, they share a list of items required for the household, and the husband procures them. In their words, it helps them remain ‘tension-free’ and the husband manages it all. However, one of the participants mentioned that she takes a keen interest in managing household expenses. Her husband gives her a fixed amount on a monthly basis and she manages the expenses on her own.
2. Do you know what was the electricity expenses for January 2021 (the previous month)?
This question was better received. Electricity being an important expense in Indian households, most women were aware of the approximate bill amounts. A few still mentioned that they rely completely on their husband, hence are not aware of the amount spent.
National Budget & Importance of Budget
To initiate the discussion on the importance of budgeting, we shared a picture of ‘budget’ as held by Honorable Finance Minister Nirmala Sitaraman. The participants were easily able to identify the picture and also mentioned that the budget was presented by the Finance Minister. The discussion continued from how a budget is prepared for the entire country, to its importance in their households.
A budget allows us to fix limits on how much can be spent on a particular category, and helps keep a ceiling. On one hand, this helps us avoid overspending, at the same time ensuring a minimum savings target is met. This systematic approach also helps to balance today’s enjoyment with securing the future.
Kharcha Khata (Expense Register)
Next, we introduced the concept of ‘Kharcha Khata; or expense register. A few participants were aware of the concept but had not practically done it. They usually felt it was too much work and hence avoided it. We explained in detail how maintaining detailed expense accounts will help them keep a track of where they are spending money. We also shared a glimpse of the next steps once the Expense Register is maintained, to highlight the benefits in long run.
All the participants were very enthusiastic and committed to keeping records from the next day itself.
Before concluding the session, we asked how participants felt after the session today and their key learnings. While all the feedbacks were in a positive light, one notable response was:
We know how to spend. It is through this session, that we are learning how to save.
Ready to begin again? But not sure where to start? This will help..
One question students often ask is, whether to opt for one group or both? That’s a fair question, considering we don’t want to bite more than what we can chew. Another related question is, within each subject where should I start from? Which topic/subject should get more time allocation? I am going to share an interesting technique with you to evaluate how to get started.
To understand how to achieve our goals and what steps to take, we need to have some information. For example, if you search for directions to Mumbai Airport on Google Maps, you need to enter the starting point. Hence, the first step would be to know where you currently are (i.e. your current position) and how far is your destination from here. That will help you decide how to make it happen.
THE STUDY SIGNAL TECHNIQUE
Its a very simple but scientific method of assessment of your current position. Remember those traffic signals with Red, Yellow and Green lights? A Red lights asks the driver to stop, a Yellow light requests the driver to be careful, while the Green light is a Go Ahead. We are going to use something similar to evaluate our status. Get your colored pencils out, for we are getting started!
We will conduct this study across all the subjects and will broadly cover all the chapters/topics. Whether to do this on a topic level or chapter level is your choice. Once decided, prepare an assessment sheet with all subjects and chapters/topics in one place. You may also use the index of the book(for convenience sake). You have to rank every topic/chapter based on your comfort level. Now, the comfort level maybe hard to access. Sometimes, our perception makes us feel one thing, while the truth lies elsewhere. That’s guesswork and not a very scientific approach.
To get a ‘true and fair view’, you have to attempt one or two random questions from each topic/chapter and based on familiarity with those, decide your comfort level. Here is an idea to get started. Were you able to understand what the question is asking you? Are you familiar with the concept being tested? Are you able to begin the solution? Did your final answer match with the one provided in the book?
Based on how many of the above answers are in affirmative, you can decide the relative comfort with the topic. If the answer to all the questions is a yes, it signals a high comfort. This is one of the relatively easier topics for you. Code this topic in Green on your assessment sheet. If you are using the book index, you may just mark a small Green circle in front of the topic/chapter.
If you are able to understand the concept being tested, get started on the solution, but not able to arrive at final answer, the topic belongs to second category. This is where are have some familiarity and comfort, but needs work before we can call is a comfort topic. Mark these topics with a Yellow circle.
The last category is a tough one. These are topics you could not identify, or questions you could not begin. This is where maximum effort is required to build comfort and familiarity. Mark these topics with a Red circle.
Once the assessment is completed on topic/chapter level, you can use it to give an overall ranking to the subject. You may decide the colour code for a subject, based on where maximum topics/chapters lie. This exercise may seem time consuming, but is very important to start in the right direction. Let me explain further.
Once you know exactly where you stand, you can arrive at a rough estimate of time required to complete all the topics. When we get started with a ‘red’ topic and build some comfort, we re-code it to a ‘Yellow’. Similarly, once we have properly studied a ‘Yellow’ topic, it moves to ‘Green’. You need to take a rough estimate of time required to convert all codes to Green.
How many groups should I appear for?
Based on the above analysis, you have an approximation of time required for completing your portion. Compare that with time available to you. Please keep some margin of safety in time availability, to account for the bad health days or other disruptions. (May allow 5-10% depending on your circumstances)
If you feel that both groups study, revision and tests can be completed within the time available, please opt for both groups. Else, apply for both groups, prepare for the first one and appear both (just in case). Alternatively, you may also focus on the group you are more comfortable with and leave out the other one entirely.
Subject & time allocation
All subjects carry equal marks and its equally important to pass in all subjects. By this logic, all subjects should get equal time allocation. However, that may not be a very practical solution considering the syllabus and relative comfort differs per subject. You may dedicate more time to topics in red, especially ones carrying higher mark weightage traditionally. But, please ensure that this is not at the cost of relatively easier topics.
All the Best