Reposting this article after 4 years….as my daughter understood personal finance in class 4….

I had got Amar Pandit’s book for Children. Here is my daughter’s understanding of the book. She is in 4th standard, Apeejay School, Nerul, Navi it is in her own words. I had posted a part of the article earlier too..this is the full one..

Recently my father got a copy of a book for children about Money.Ā  Here is what I learnt from that book and I thought it will be useful for all of us to know a little about Money. So here are some important concepts about money:

Saving money is very important. We should save money because if one day suddenly we need money we will have it with us. If we just keep on spending all the money that we get and one day we need money we will not know what to do.
I am also saving all my pocket money because I might need it in future. I have kept it in a bank account and I get interest on that every year.

As we all know that Government pays money for various things we should never spoil those things as Government takes money from our parents in the form of tax. All those people who get regular salary have to pay tax. When we buy a movie ticket half of the money that we pay goes to the government. This is called Entertainment tax.

Investing makes our money grow. Just as a plant grows from a seed to a plant. When we keep our money in a savings bank we get interest but if we will invest our money in fixed deposits, shares, mutual funds, public provident funds, etc. our money will grow from a small amount to a big amount faster. Real money takes more time to grow whereas a plant grows within weeks.

Insurance protects you from spending a big amount on medical treatment, repairs, etc. Today if I am spending a small amount on a helmet, kneepad, arm-pads, etc. this will help me in being safe while skating. I will not have to spend a big amount on medical treatment. And if I fall ill the insurance company will pay the hospital bill. This way IĀ  and my family are spending lesser money from our pockets.

Prize Money:
We should treat our prize money just like our pocket money, because that also we have earned by working hard. We should save that money and not waste it on unwanted things. A part of the money we should spend on something fun like ice-cream and the balance we should put in our piggy bank or the savings bank account.

We keep our money in the bank so that it is safe. The bank gives us a passbook in which we can see how much money we have deposited and how much money we have withdrawn. For using our money the bank pays us interest ā€“ this is also added to our total amount. Last time I saw there was an additional Rs. 314 interest in my savings bank account.

Credit Card:

When we are in a shop and we do not have cash with us we can buy things by using our credit card. The shop-keeper will let us take the goods because he will get the payment from the bank which has given us the credit card. However we have to make the payment to the bank after a few days when the bank asks us to make the payment. If we do not make the payment before the due date, we will have to pay interest on the amount that is due.

—end of Mridula’s article——

comments from kids more welcome than from adults šŸ™‚ -subramanyam šŸ™‚

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  1. Sir, for a child studying in 4th standard, having this much knowledge is incredible.

    I did not understand all these until very late , that makes me very old child in front of Mridula.

  2. Vishal (Age 35 yrs)

    This is incredible !! Thanks Mridula, for reading the book and summarizing it so well for us. You write really well šŸ™‚

  3. Ashish (Age 31 Yrs)

    Thank you Mridula and Surba for posting the most simplest way of explaining all about money, savings and investment.

    I think this is one of the simplest and easiet explanation and not even a comma is extra here.

    This should be made as a poster and keep in my every place where public deal with money.

    In other way, I can say this should be preamble of subramoney website

  4. Dear Subra,

    Father of 2 daughters (ages 19 and 12)

    I can only say Wow! Amazing that Mridula is able to grasp and articulate these concepts at such an young age. I am not a very strong believer in genetic inheritance (I lean more towards environmental influences) but looks like I am completely wrong here – she seems to have inherited clarity in thoughts from you.

    Thanks for posting..

  5. Girijan Sankaran Nair

    You are far sighted father. My daughter who is 16 years, earns through her singing shows still do not the value of money. Greatly appreciate, if you could share the title of the book that I might as well buy for her. Thank you for posting your daughter’s observation.

  6. Leena Jitendra Meeta Chandan

    Wow! There were some of the definitions like that of prize money even I was not aware up! Nice easy definitions Mrudula! Thank you for updating me!

  7. Leena Jitendra Meeta Chandan

    Wow! There were some of the definitions like that of “prize money” even I was not aware of! Nice easy definitions Mrudula! Thank you for updating me!Shows that finance is in your blood…My Nephew is 5 years old and knows every bit of technology from his father….I guess some have it in their genes.

    ***Apology on spell error in first post***

  8. Great writng! thanks for posting.


    I searched and found a few books by Amar Pandit. I think the one book mentioned by Subra is “The Art and Science of Teaching Children about Money”.

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