💰 Money Management Basics

“It’s not how much money you make, but how well you manage what you have.”

Welcome back!
Now that you understand what a business is, it’s time to focus on you — and your money.
Whether it’s your allowance, part-time income, or gift money, learning to manage it is a life-changing skill.

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🧠 What Is Money Management?

Money management means making a plan for how to:

• earn,
• spend,
• save,
• and grow your money.

It’s like being the CEO of your own wallet.

Even small amounts count — if you manage $10 wisely, you’ll be ready to manage $1000 later.

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⚖️ Needs vs Wants

Understanding this difference is the foundation of smart spending.

Category	Examples	Why it matters
Needs	Food, water, clothes, internet for school, transportation	You can’t live or study properly without these
Wants	Fancy shoes, new headphones, snacks, games, subscriptions	Nice to have — but not essential

💡 Tip: Before every purchase, ask:
“Do I need this — or just want it?”

Even adults forget this sometimes!

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🎯 Real-Life Example

Imagine you get $40 per month as pocket money.

You could:

• Spend $20 on snacks and entertainment,
• Save $10 for something bigger (like a school trip),
• And donate $5 to a cause you care about.

That leaves $5 as your safety net — your mini emergency fund.

You’re not just spending money — you’re learning control and purpose.

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🧮 The 50/30/20 Rule (Simplified for Students)

This is a classic money management idea — adjusted for your age.

Purpose	% of your money	Example
🧾 Needs	50%	Transport, meals, school supplies
🎮 Wants	30%	Movies, small treats
💰 Savings	20%	Future goals or emergencies

You can adjust this rule to fit your reality.
The point is to plan ahead instead of reacting.

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📱 Tracking Your Money

You can’t manage what you don’t measure.
Start tracking your money — on paper, in an app, or even in a simple spreadsheet.

Try writing this down for one week:

Day	Income	Spending	What For?	Feeling
Monday	$5	$3	Snack	😊 Happy
Tuesday	—	$2	Bus	😐 Normal
Wednesday	—	$0	Stayed home	😎 Proud

Seeing your spending patterns helps you understand yourself — and your habits.

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💡 Smart Saving Tips

1. Set a goal. Don’t just “save money” — decide what for.
   → e.g., new bike, concert ticket, or your first investment.
2. Name your jars. “Fun,” “Future,” “Give.” It’s easier to stick to goals when money has a purpose.
3. Save first, not last. When you get money, save before you spend — like paying yourself first.
4. Use challenges. Try “No Spend Weekends” or “Save $1 every day for 30 days.”

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🧠 Real Example: Alex’s Choice

Alex, a 17-year-old, wanted new sneakers. They cost $80.
He earned $10/week walking dogs.

At first, he thought it’d take forever. But he started saving $8/week.
In 10 weeks — boom, he bought the sneakers.
He realized saving gave him freedom — not limits.

Every time you save, you tell your future self: “I got you.”

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🧩 Mini-Exercise: “My Money Map”

Take a blank page and divide it into 3 zones:

1. Inflow – where money comes from (allowance, small jobs, gifts).
2. Outflow – where money goes (food, hobbies, online purchases).
3. Goals – what you’re saving for.

Then draw arrows between them — make it visual, colorful, personal.
You’ll literally see how your money flows!

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🧭 Why Money Management Matters

Good money management helps you:

• Feel more in control of your life,
• Avoid unnecessary stress or debt,
• Build confidence for future independence,
• Prepare for the next steps in business — where managing money for others matters too!

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📚 Summary

Concept	Meaning
Money management	Planning how to earn, spend, save, and share money
Needs	Essentials you truly require
Wants	Non-essential but enjoyable things
Savings	Money you keep for the future
Budget	Your personal money plan

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🏆 Reflection Badge: Money Master

Complete this lesson and create your “Money Map” to earn the Money Master Badge.

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🚀 What’s Next?

Now that you know how to manage your personal money, it’s time to build a budget like a pro —
in Lesson 3: Budgeting for Teens →

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