Learn Trading Under The Guidance of Vivek Bajaj + 4 Mentors - Know More

Personal Finance for Teens

What is Personal Finance?


If we talk about financial literacy for teenagers in India, a remarkably small percentage have a clear understanding of it.

Approximately 74% of teenagers need more confidence in their understanding of money matters.

A few important concepts of Personal Finance Teens need to know

Difference between Needs and Wants

Needs are basic things we need to survive and live well, like food, water, shelter, and clothes. Everyone needs these things, no matter where they're from. It's really important to take care of our needs because not having them can make us sick or unstable.

Wants are different. They're things we'd like to have but don't need to live. They make life better and more enjoyable, but we can live without them

While managing your finances, you exactly need to know how to manage spending between them,

Relationship with money 

Developing a healthy relationship with money involves a few key steps:

  • Talk about money openly with your family.

  • Be honest about financial mistakes and learn from them.

  • Treat yourself without feeling guilty.

  • Avoid comparing your finances to others.

Time Value of Money

Understanding the time value of money is crucial in managing your finances wisely. It means that the money you have now is more valuable than the same amount in the future because it can earn interest or grow in value over time. This concept is important for making smart decisions about saving, investing, and spending.


Understanding taxes can seem daunting initially, but once you grasp the basics, it becomes clearer what to expect from your earnings.

Know the difference between gross and net income. Gross income is what you earn before taxes, while net income is what you take home after taxes are deducted.

Learn about income tax brackets. Your tax payment depends on how much you earn and how you earn it, so it's essential to be familiar with these brackets.

Find out if your income is tax-exempt. Some types of income, like gifts for teens, may not require you to pay taxes on them.


It would be ideal to have enough money for all your needs, whether essential or not. However, real life often determines our financial choices.

Budgeting helps ensure you don’t overspend. It lets you plan for both immediate and future expenses. It’s a smart way to handle your money before things get out of hand. Ideally, you’ll have savings. If not, it can still prevent you from going into debt.


Investing means putting your money into something with the hope that it will earn you more money in the future. It's a smart way to manage your money and achieve big financial goals like buying a house or saving for retirement.

Starting to invest when you're a teenager is a great idea because you have lots of time for your money to grow. A study by Greenlight found that many teens are interested in investing, but most of them need to learn how to get started. Investing doesn't have to be super complicated, but there are a few important things to remember.

Did you like this unit?

Units 1/9