1️⃣ MONEY
Definition? Money is anything that is widely accepted as a medium of exchange for buying goods and services. It acts as a unit of account (to measure value) and a store of value (to save for future use). Money removes the difficulties of the barter system by providing a common standard of value. It can exist in many forms such as cash, coins, bank deposits, digital money, and UPI payments, and is issued or regulated by the government or central authority.
What is it? Money is something that we use to buy goods and services and pay debts.
Types: Cash, Bank money, Digital money
When? Buy, sell, save, pay
Who? Everyone
Why? Easy trade, avoids barter, stores value
How? Government guarantees value
Quiz (5 Questions)
1. Money is used to?
2. UPI is?
3. Money avoids?
4. Who uses money?
5. Who guarantees money?
2️⃣ INTEREST
Definition? Interest is the extra amount of money paid or earned in addition to the original amount (principal) when money is borrowed or saved. When a person borrows money, they pay interest to the lender as a cost of using that money. When a person saves or invests money, they earn interest as a reward for postponing spending. Interest depends mainly on the principal amount, rate of interest, and time period.
What is it? Extra money paid or earned.
Types: Simple, Compound
When? Borrowing or saving
Who? Borrower pays, lender earns
Why? Reward saving, cover risk
How? P × R × T
Quiz
1. Interest is?
2. Borrower?
3. Faster growth?
4. Interest rewards?
5. Interest depends on?
3️⃣ INVESTMENT
Definition? Investment means putting money into an asset or scheme with the expectation of earning future income or profit. The main purpose of investment is wealth creation over time. Common investment options include fixed deposits, mutual funds, shares, bonds, gold, and real estate. Investments usually grow due to interest, dividends, capital appreciation, and compounding, and they involve different levels of risk and return.
What is it? Investment means putting money today to get more money in the future.
Types: Fixed Deposits, Mutual Funds, Shares, Gold, Real Estate
When? As early as possible, especially for long-term goals
Who? Individuals, companies, governments
Why? Beat inflation, build wealth, achieve life goals
How? Through interest, profits, dividends, and compounding
Quiz
1. Investment means?
2. Which is an investment?
3. Best time to invest?
4. Why do people invest?
5. Investment grows mainly due to?
4️⃣ LOAN
Definition? A loan is an amount of money borrowed from a bank, financial institution, or individual with a promise to repay it over time along with interest. Loans are taken when a person or business does not have enough funds to meet a need such as education, housing, business, or emergencies. Loans are generally repaid in regular installments called EMIs (Equated Monthly Installments) and are governed by agreed terms and conditions.
What is it? A loan is money borrowed that must be repaid with interest.
Types: Education Loan, Home Loan, Personal Loan, Business Loan
When? When people do not have enough money
Who? Banks, NBFCs, government institutions give loans
Why? To study, buy a house, start business, emergencies
How? Repaid in monthly installments called EMI
Quiz
1. A loan is?
2. Which is a type of loan?
3. Who gives loans?
4. Why do people take loans?
5. Loan is repaid through?
5️⃣ INSURANCE
Definition? Insurance is a financial arrangement that provides protection against financial loss due to unexpected events such as accidents, illness, death, theft, or natural disasters. Under insurance, the insured person pays a regular amount called a premium to an insurance company. In return, the company promises to compensate for losses as per the policy terms. Insurance helps reduce financial risk and provides financial security and peace of mind.
What is it? Insurance is financial protection against loss.
Types: Life Insurance, Health Insurance, Vehicle Insurance, Property Insurance
When? During accidents, illness, death, or damage
Who? Insurance companies provide insurance
Why? Protects family and reduces financial burden
How? You pay premium, company pays during loss
Quiz
1. Insurance provides?
2. Which is a type of insurance?
3. When is insurance used?
4. Who provides insurance?
5. What do we pay regularly?
6️⃣ SHARE MARKET
Definition? The share market is an organized place where people buy and sell shares (ownership units) of companies. When a company needs money to grow its business, it divides its ownership into small parts called shares and sells them to the public. People who buy these shares become part-owners (shareholders) of the company.
What is it? The share market is a place where company shares are bought and sold.
Types: Primary Market (IPO), Secondary Market (Buy/Sell shares)
When? On working days during market hours
Who? Investors, traders, and companies
Why? Companies raise money for growth
How? People earn through price rise and dividends
Quiz
1. Share market is used to?
2. IPO belongs to?
3. Who participates in share market?
4. Why do companies issue shares?
5. How do investors earn?
7️⃣ CRYPTOCURRENCY
Definition? Cryptocurrency is a type of digital or virtual currency that uses cryptography for security and operates on a decentralized system called blockchain technology. Unlike traditional money, cryptocurrencies are not issued or controlled by any central authority like a government or bank. Transactions are recorded on a public digital ledger, making them transparent and difficult to alter. Examples include Bitcoin, Ethereum, and Ripple. Cryptocurrencies are used for investment, online transactions, and digital asset storage, but they are highly volatile in value.
What is it? Cryptocurrency is digital money using computer codes.
Types: Bitcoin, Ethereum, Other altcoins
When? For investment or digital transactions
Who? Tech users and investors
Why? To avoid central control and enable fast transfers
How? Using blockchain technology
Quiz
1. Cryptocurrency is?
2. Which is a cryptocurrency?
3. Who uses cryptocurrency?
4. Why was cryptocurrency created?
5. How does cryptocurrency work?
8️⃣ COMPOUND EFFECT
Definition? The compound effect refers to the process where interest is earned not only on the original principal but also on the previously earned interest. Over time, this leads to exponential growth of money. The compound effect is most powerful when investments are made early and for a long duration. It plays a major role in wealth creation through long-term savings and investments such as fixed deposits, mutual funds, and retirement plans.
What is it? Interest earned on interest plus the original money.
Types: Annual compounding, Monthly compounding
When? Useful for long-term saving and investment
Who? People who start early benefit most
Why? Small amounts grow big over time
How? Money multiplies year after year
Quiz
1. Compound effect means?
2. Which is a type of compounding?
3. When is it most useful?
4. Who benefits most?
5. Why is it powerful?
9️⃣ CHIT FUND
Definition? A chit fund is a traditional group-based saving and borrowing system where a fixed number of members contribute a fixed amount of money regularly for a specific period. Each month, one member receives the collected amount either through auction or lottery. Chit funds are commonly used for short-term savings and access to lump-sum money. While registered chit funds are regulated by law, unregistered chit funds can be risky.
What is it? A chit fund is a group saving system.
Types: Registered chits, Private chits
When? Used when people need savings plus borrowing together
Who? Run by chit companies or individuals
Why? Easy access to lump sum money
How? Members contribute monthly, one member gets money each month
Quiz
1. Chit fund is?
2. Which is a type of chit fund?
3. Who runs chit funds?
4. Why join a chit fund?
5. How does a chit fund work?
🔟 INFLATION
Definition? Inflation is the gradual increase in the general price level of goods and services over time, which reduces the purchasing power of money. This means that the same amount of money buys fewer goods than before. Inflation usually occurs due to increased demand, higher production costs, or excess money supply in the economy. Moderate inflation is considered normal for economic growth, but high inflation can harm savings and living standards.
What is it? Inflation means rise in prices over time.
Types: Mild inflation, High inflation
When? When demand is more than supply
Who? Everyone is affected
Why? Money loses value if inflation is high
How? Measured using Consumer Price Index (CPI)
India Inflation (CPI) – Last ~20 Years
| Year | Inflation Rate (CPI, %) |
|---|---|
| 2005 | 4.25% |
| 2006 | 6.1–6.7% |
| 2007 | 6.4% |
| 2008 | 8.3% |
| 2009 | 10.9% |
| 2010 | 11.99% |
| 2011 | 8.9% |
| 2012 | 9.5–10.0% |
| 2013 | 10.0–10.9% |
| 2014 | 5.8–6.4% |
| 2015 | 4.91% |
| 2016 | 3.4–4.5% |
| 2017 | 3.3–3.6% |
| 2018 | 3.4–4.9% |
| 2019 | 3.7–4.8% |
| 2020 | 6.62% |
| 2021 | 5.1–5.5% |
| 2022 | 6.7% |
| 2023 | 5.65% |
| 2024 | 4.95% |
Quiz
1. Inflation is?
2. Mild inflation means?
3. Inflation occurs when?
4. Who is affected by inflation?
5. How is inflation measured?
1️⃣1️⃣ DEFLATION
Definition? Deflation is the decline in the general price level of goods and services over time. It increases the purchasing power of money, but it is often a sign of economic slowdown. Deflation occurs when demand falls, production decreases, and unemployment rises. Prolonged deflation can negatively affect businesses and wages, making it harmful to the economy.
What is it? Deflation means fall in prices.
Types: Temporary deflation, Long-term deflation
When? During economic slowdown
Who? Businesses and workers are affected
Why? People stop spending, economy slows down
How? Observed through price indices and economic data
In India: Very rare, only short periods in last 20 years
Quiz
1. Deflation is?
2. Temporary deflation means?
3. When does deflation happen?
4. Who is affected by deflation?
5. How often did India face deflation in last 20 years?
1️⃣2️⃣ TAX
Definition? Tax is a compulsory payment made by individuals and businesses to the government to fund public services and national development. Taxes are used for building infrastructure, providing education, healthcare, defense, and welfare schemes. Taxes are broadly classified into direct taxes (like income tax) and indirect taxes (like GST). Paying taxes is a legal duty of citizens and helps in the overall growth of the economy.
What is it? Tax is money paid to the government.
Types: Direct tax, Indirect tax (GST)
When? When earning or buying goods
Who? Collected by the government
Why? For country development and public services
How? Through income tax, GST, and other taxes
Quiz
1. Tax is?
2. Which is a direct tax?
3. Who collects taxes?
4. Why do we pay taxes?
5. How are taxes collected?
1️⃣3️⃣ GDP
Definition? Gross Domestic Product (GDP) is the total monetary value of all final goods and services produced within a country during a specific time period, usually one year. GDP is a key indicator of a country’s economic performance and growth. A rising GDP indicates economic progress, while a falling GDP may signal economic slowdown. GDP includes production from agriculture, manufacturing, and services sectors.
What is it? GDP is the total value of goods and services produced in a country.
Types: Nominal GDP, Real GDP
When? Calculated every year
Who? Calculated by government agencies
Why? Shows country’s economic strength
How? Increased by production, services, and exports
Quiz
1. GDP stands for?
2. Which is a type of GDP?
3. Who calculates GDP?
4. Why is GDP important?
5. How can GDP increase?
1️⃣4️⃣ FINANCIAL PLANNING
Definition? Financial planning is the process of managing income, expenses, savings, investments, and risks in a systematic way to achieve short-term and long-term financial goals. It helps individuals use their money wisely, prepare for emergencies, and secure their future. Financial planning includes budgeting, saving, investing, insurance, tax planning, and retirement planning.
What is it? Financial planning means deciding in advance how to earn, spend, save, and invest money.
Types: Short-term planning, Long-term planning
When? From an early age and throughout life
Who? Individuals, families, and businesses
Why? To achieve goals, avoid financial stress, and ensure a secure future
How? By budgeting, saving regularly, investing wisely, and managing risks
Quiz
1. Financial planning is about?
2. Which is a part of financial planning?
3. Who needs financial planning?
4. Why is financial planning important?
5. Financial planning should start?
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