ArthaBodh

What is UPI?

arthabodh — Fri, 10 Oct 2025 08:18:44 +0000

Our young learners explored what UPI is, how it works, and the various platforms that make digital transactions easy and secure. They also shared their thoughts on whether UPI is a boon or a bane in today’s digital world.

Click below to read and download their wonderful answers!

Accounts Receivable (A/R or AR)

arthabodh — Sat, 19 Oct 2024 11:48:50 +0000

A/R, “accounts receivable” is the money a business should receive from its customers for the sales of goods or services on credit. It is the amount of money for which you have issued invoices but have not yet been paid. It is treated as current asset since you sold goods/services on credit (without receiving cash up front) for which you expect cash to be received in short period of time.

Accounts receivable signifies how much cash you are awaiting from unpaid invoices. It is a key indicator of your company’s financial health.

Example:
You are a company A who sold goods to company B on credit (without receiving cash up front). Company B as a customer needs to pay this in short period of time,
generally in 30 days.

Company A will record this transaction as accounts receivable because company A has to receive money from company B.

What would you do?

Scenario 1
You really want this cycle but you can not afford it. You have worked out that it will take you two years to save the money then:

Is it worth waiting that long?
Will you still want the bike in two years?
Is saving money a waste of time?

Scenario 2
You are 30 years old and have a good job…

Will you spend money on a new car or a big holiday?
Will you save a lot of your money or mainly buy things?

What Do You Want to Learn About?

We want to answer your questions! After asking your parents’ permission, write to us at contactus@arthabodh.com and tell us the money questions and issues you would like to see covered in the next edition of Newsletter.

Money Fun Facts

Interesting facts about Indian Rupees and Coins

The Government of India’s first set of notes was the Victoria portrait series. For security reasons, the notes of this series were cut in half. One half was sent by
post, and upon confirmation of receipt, the other half was sent. They were replaced by the Underprint series in 1867.
Denominations of 1 paise, 2 paise, 3 paise, 5 paise, 10 paise, 20 paise and 25 paise were in circulation till June 30, 2011 but were then withdrawn.
If you have a torn note, or more than 51% of its torn part, you can exchange it for a new one at a bank.
Did you know that except for one-rupee notes and coins everything else is printed by the RBI!
Only 1 Re note and coins in India are signed by the Finance Secretary as they are printed by the Central Government. All other Indian Currency notes in India are printed by the RBI

Accounts Payable (A/P or AP)

arthabodh — Sat, 19 Oct 2024 10:22:31 +0000

When a company purchases goods on credit which needs to be paid back in a short period of time, it is known as Accounts Payable. It is treated as a liability since you bought goods/services on credit (without paying cash up front) which needs to be paid at a later point in time.

Accounts Payable as a term is not limited to companies. Even individuals like you and me have Accounts Payable. We consume electricity, telephone, broadband and cable TV network. The bills get generated towards the end of the month or a particular billing period. It means that the service provider gave you some service and sends the bill which needs to be paid by a certain date or else you will default.
This becomes Accounts Payable.

Example:
You are a company A who purchases goods from company B on credit (without paying cash up front). The amount raised needs to be paid back in 30 days.
Company A will record the purchase as accounts payable because company A has to pay company B.

Show What You Know

Multiple Choice Questions

Circle the correct answer for each question. Each question is worth 1 point.

Which of the following is not an example of an asset?

a. A savings account

b. A house that you own

c. A credit card

d. A computer that you own

2. A lender is a person who:

a. owes you money

b. donates money

c. steals money

d. a person or organization from whom you can borrow money

3. When you borrow money, a lender wants to know if:

a. you are a nice person

b. you earn excellent grades

c. you have really good friends

d. you have the ability to pay back the loan

4. Risk refers to:

a. the amount of money that you borrow.

b. the possibility of financial loss.

c. the possibility of financial gain.

d. the amount that you pay for a loan.

5. What will a lender do with your collateral If you do not pay back your loan?

a. The lender will understand and return your collateral to you.

b. The lender will keep your collateral.

What Do You Want to Learn About?

What is your Money Personality?

Would you wear only branded clothes or compare branded/non-branded for best value? Would you buy on the impulse or see some rationale behind any shopping? All of us have a “money personality” that influences how we think about money and make financial decisions. Some of this behaviour and perspective is influenced by our environment (parents, friends, advertisements etc.) but a lot is based on individual characteristics and preferences

You can start to get a sense of it pretty easily just by answering a few quick questions:

1. When you check the change in your pocket you see you have a lot of 1 Rupee coins. Would you:
A. Make sure you spend them the next chance you get
B. Save them in a money box

2. When you receive some pocket money for the week. Would you:
A. Spend it all but spread over the week
B. Spend what you need and save the rest

3. How important is it to get the best price for something you want? Will you put off buying an item to find a better price?
A. It’s nice to find a sale but not crucial
B. I won’t buy it if I think I can find it cheaper somewhere else

4. Do you remember the last three things you bought with your own money and what they cost?
A. No
B. Yes

5. Do you have a specific savings goal that you are working toward right now?
A. No
B. Yes

If most of your answers were A’s then you may fall more into the spending camp. If you answered mostly B’s, you’re probably a saver.

Regardless of where you are on the spend-save spectrum, it’s important to be aware of your relationship with money and recognize habits that are healthy as well as behaviours you may want to change. For example:

Spenders – What is a realistic savings goal that you can set and achieve for yourself by the end of this year? How will you go about meeting this goal? What does it require you to give up?

Savers – What is a purchase that you could save for, feel good about and would not require all of your money? What would make you feel comfortable about going through with that purchase (finding the best price, not buying it until your full savings is enough that it would be less painful, setting funds aside in a specific place and/or on a specific schedule?

Money Fun Facts

10,000 rupee-note

10,000 rupee-note was in circulation from 1954-1978
The demonetisation of Rs.500 notes and Rs.1000 notes was not at all new
for our country.
Demonetisation of Rs.10,000 note was also made in earlier years. It was the
highest ever demonetisation done in 1938 and again in 1954.

How does a loan work?

arthabodh — Sat, 19 Oct 2024 06:10:12 +0000

You must be observing a lot of advertisements about various type of loans from different banks. You would have seen advertisements for home loan, personal loan, car loan etc. Normally for large expenses like a house or a car, any person would prefer to spread his expenses over a period, instead of paying the entire amount at one time. This is exactly where taking loan helps you. A loan allows you to spread out the cost of that item across many small payments over time instead of having to pay the full price all at once. For example, if a car costs INR 5,00,000 it’s a lot easier for most people to make a payment of INR 7,546 every month than pay the full amount up front.

Why would a bank or financial institution lend you money? Because they make money by charging interest. You have to pay back the full amount of the loan plus a fee for the right to borrow the money. How much they charge for the loan depends
on the interest rate. Using the same car example, if you borrow INR 5,00,000 from the bank at a 7% interest rate and you have to pay back the loan in 7 years, you would be charged a monthly payment of INR 7,546. This means after 7 years, you actually
pay INR 6,33,893back to the bank. So the bank earns INR 1,33,893 from the loan

Even if you can pay in full for the car, you might prefer to take out a loan. If your INR 5,00,000 would earn more in another investment than you would save by avoiding loan fees, that would be a reason. Or you might just want all or part of the INR 5,00,000 for another purpose rather than spending the full amount all at once. Whatever the reason, it’s important to understand how loans work and the responsibilities that go with borrowing. Always go for a loan in case of your needs like Home, Car etc. rather than your wants like holiday trip,expensive gadgets etc.

Financial Information Quotient

Read the following statements and mark whether they are true or false:

One who can spend a lot of money is a wealthy man. _______
People who regularly spend less than what they earn are more likely to become wealthy thanthose who regularly spend more than what they earn. _______
Young people do not have to worry about money. _______
You cannot spend money when your bank account is empty. _______
One must be 18 years old in order to open a bank account. _______
It is possible for us to have a share in the profits of many big companies in India. _______
One cannot open a bank account if one does not have a ration card. _______
When you save money, it grows. _______
A person below 18 years of age can apply for a loan from a bank. _______
One can keep his savings in a post office. _______

What Do You Want to Learn About?

We want to answer your questions! After asking your parents’ permission, write tous at contactus@arthabodh.com and tell us the money questions and issues youwould like to see covered in the next edition of Newsletter.

You Can’t Always Get (all of) What You Want – Appreciate Tradeoffs

Life is all about trade-offs or prioritization – making the choice to do one thing and recognizing how that decision limits or affects other options. For example, if you spend your allowance on a small toy today, it will take you longer to save up for a bigger item. At every stage of your life you would have to prioritize things or make a choice to do one thing hence it’s important to develop the skill to recognize what trade-offs are involved – particularly with decisions about money. Like anything else, you can practice and get better at identifying and evaluating trade-offs. Start with
asking yourself with small purchases:

Do I actually want this item?
Is it worth the price?
Will it bring me happiness or satisfaction and for how long?
If I use my money for this now, how does that affect what I can buy or do with my money later?
Would I be happier saving my money for something else?

If you develop this habit of asking yourself these questions, you will end up spending your money wisely since you will likely make fewer impulse buys, have fewer regrets about your spending and feel happier about the things and experiences that you do spend your money on.

Money Fun Facts

Symbols below the date on your coin indicate where it was minted

In India, coins are minted at four mints: Mumbai, Kolkata, Hyderabad and Noida through Security Printing and Minting Corporation of India Ltd (SPMCIL). Every coin
will have a certain symbol which indicates the place where it has been minted.

if you see coins which have no symbol below the date, it means they have been
minted at Kolkata
If you see coins with a diamond symbol or a letter ‘B’ or letter ‘M’ below the year, it
means it has been minted at Mumbai Mint
Coins with a star, split diamond or dot in diamond below the year, means that they have been minted at Hyderabad
Coins with round dots below the year mean that they have been minted at Noida
Mint

What is inflation?

arthabodh — Sat, 19 Oct 2024 01:51:39 +0000

If you inflate a car/bike tyre or a balloon, it gets bigger. In finance, inflation is “the rate at which the price of goods and services rise”. High inflation can lead to a “loss in purchasing power” for consumers hence inflation is also understood as “a rise in prices, which can be translated as the decline of purchasing power over time”. In other words, the same amount of money will not buy as many goods or services. For example, if you saved up INR 100 to buy a school tiffin and inflation shot up by 10%, the exact same tiffin would cost INR 110 so now you would need an additional INR 10 to purchase it.

Normally inflation is either ‘demand pull’ or ‘cost push’. A ‘demand pull’ inflation occurs in case of increase in demand for products and services where as a ‘cost push’ inflation occurs as a result of increase in prices of raw materials/inputs used to produce a product or service. It can also be affected by factors like supply chain problems or political instability. If these issues make it hard for
sellers to obtain certain products or make it more expensive to produce them, then that drives up the price of those products.

In India the Reserve Bank of India (RBI) mainly seeks to control inflation. Their goal is to set policies that get the economy back to a stable balance between demand and supply so that prices do not continue to rise at a rapid rate.

T E S T Y O U R S E L F

Financial Terminology Knowledge

Match each statement with the right term.

A tool that helps you track your income and expenses to ensure that you are living within your means
A card that allows you to make purchases by deducting money immediately and directly from your bank account.
The fee you pay to borrow money.
An investment that represents a share of ownership in a publicly traded company.
An investment that represents a loan by an investor to a borrower
A card that allows you to borrow money from a bank to make purchases and then pay that amount back at a later date plus lending fees
Bonds are also called this term.
Stocks are also called this term

What Do You Want to Learn About?
We want to answer your questions! After asking your parents’ permission, write to us at contactus@arthabodh.com and tell us the money questions and issues you would like to see covered in the next edition of Newsletter.

Central Bank Digital Currency (CBDC) is the electronic version of the nation’s official currency and is issued by respective country’s central bank. In India, the RBI (Reserve Bank of India) will issue this legal tender, also known as the digital rupee .

Digital Rupee (e₹) is a legal tender issued by the Reserve Bank of India in retail segment has components based on blockchain technology. Also called the “digital rupee” or e₹, it will offer features of physical cash like trust, safety and settlement finality with atomicity (i.e. immediate settlement of transactions) in digital mode.
e₹ represents a direct claim on the central bank. It can be used to carry out transactions or store value digitally, similar to the manner in which currency notes can be used in physical form.

Some of the most obvious ways in which CBDC will impact common people include,

Money transfers will be more efficient and will be settled faster
Saving money for users since overall reduction in transaction costs for various money transfers including international money transfers as CBDC-based remittances will be quicker and cheaper
24X7 availability of transfer and remittance services
Carrying and storage of physical cash, as well as the problem of
soiled and damaged notes, can be avoided.

How Digital Currency in India will Impact Its Economy:

Faster and more efficient money transfers: Domestic and international money transfers are subject to various restrictions like turnaround times, bank holidays, weekends, etc. However, digital currency transactions will run at a high speed, 24/7, and transaction-related expenses is expected to be lower resulting into savings for the customers.

Achieving Cashless Economy: Due to inclusion of the e-Rupee, more and more transactions will be cashless. Hence digital currency, or e-Rupee, will help the government achieve a cashless economy. A cashless economy means the convenience of digital transactions and freedom from the risk of carrying and storing cash

Money Fun Facts

Indian Rupee is made of cotton and not paper: Indian Rupee Notes are made up of
pulp which contains Cotton and Balsam with special dyes. India has been importing the special paper to be used in currencies for many years. There is a silk portion which is not publicised. The proportion of contents is secret. The purpose of using Cotton with Special Dyes is that the notes should be more resilient as well as durable. It will possess a quality to resist from wear and tear and it won’t be so easy to fake it.