Financial Awareness
Senior 1 · Entrepreneurship
Financial Awareness
Lesson 1 of 5
25 min
Niyonsenga runs a small butcher's shop in Huye. For his first year he kept all his money in one drawer: the takings from the shop, and the money for his family's food, rent and school fees. Whenever the family needed something, he took it from the drawer.
In September he paid three children's school fees from the drawer. The next week the farmer who supplies his meat arrived, and there was not enough cash to pay for the animals. The shop was closed for four days. His customers went to another butcher, and some never came back. (An illustrative case.)
Think about it: Niyonsenga's shop was making a profit. So what went wrong?
Niyonsenga's shop was healthy; his money management was not. He mixed two different kinds of finance that must be kept apart.
Definition
Finance: money, and the way it is obtained, managed and used.
Example: deciding how to pay for a new fridge for the shop is a finance decision.
Definition
Personal finance: how an individual or a family manages its money: earning, spending, saving, borrowing and protecting it.
Example: planning how much of a salary goes on rent, food and saving.
Definition
Business finance: how a business obtains and manages the money it needs to start, run and grow.
Example: keeping enough cash to buy stock every week, and a loan to buy a fridge.
| Personal finance | Business finance | |
|---|---|---|
| Whose money? | A person or a family | The business |
| Main income | Wages, salary, profit taken from the business | Sales |
| Main spending | Food, rent, school fees, health, wants | Stock, wages, rent, equipment, taxes |
| Main goal | Meet needs, save, plan for the future | Make a profit and keep the business running |
| Niyonsenga | The family's food, rent and school fees | Paying the farmer, the rent of the shop |
Important
Keep business money and personal money apart. Pay yourself a fixed amount from the business each month, like a salary, and run the family on that. Never take money for the family straight from the till.
Definition
Income: money received over a period, such as wages, a salary, profit or rent.
Example: Aline's salary of Frw 120,000 a month.
Definition
Expenditure: money spent over a period, on needs, wants, saving and debts.
Example: Aline's rent, food and bus fares for the month.
Definition
Budget: a plan that sets out expected income and how it will be spent and saved over a period, usually a month.
Example: Aline's plan below, made on the first day of the month.
The difference between income and expenditure is the balance:
A positive balance is a surplus (money left over). A negative balance is a deficit (more spent than received, so the gap must come from savings or borrowing).
Aline, 22, works as a receptionist at a hotel in Kigali. On the first of the month she planned her budget; at the end she filled in what actually happened. (Illustrative figures, Frw.)
| Item | Planned (Frw) | Actual (Frw) | Difference (Frw) |
|---|---|---|---|
| Income | |||
| Salary | 120,000 | 120,000 | 0 |
| Weekend hair-braiding | 0 | 5,000 | +5,000 |
| Total income | 120,000 | 125,000 | +5,000 |
| Expenditure | |||
| Food | 36,000 | 39,500 | +3,500 |
| Rent | 30,000 | 30,000 | 0 |
| Saving | 18,000 | 18,000 | 0 |
| Transport | 12,000 | 10,000 | −2,000 |
| Phone and data | 6,000 | 7,500 | +1,500 |
| Health and personal care | 6,000 | 5,000 | −1,000 |
| Support for her mother | 6,000 | 6,000 | 0 |
| Fun and wants | 6,000 | 12,000 | +6,000 |
| Total expenditure | 120,000 | 128,000 | +8,000 |
The pie chart shows her planned budget. Each slice's angle is its share of 360°.
Worked example
Reading Aline's budget
Step 1: planned balance. : the plan used every franc, including Frw 18,000 of saving.
Step 2: actual balance. a deficit of Frw 3,000, even though she earned Frw 5,000 more than planned.
Step 3: find the cause. The biggest overspend was fun and wants: more than planned, double the plan.
Step 4: act. To cover the deficit she must take Frw 3,000 back out of her savings. Next month she should keep wants to the planned Frw 6,000.
Worked example
Drawing the pie chart
Food: , and .
Rent: , and .
Saving: , and .
Tip
Put saving in the budget as a bill. Aline wrote saving on her plan like rent, and paid it on salary day. Money saved first is not there to be spent by accident.
Learn Bright, "Financial Literacy: Making a Budget" (about 5 minutes). Watch for the steps to building a budget. The video uses US dollars: the steps are the same in francs.
Practice
Sources and credits
Written by Ganzaa: the Huye case, the tables, Aline's budget, the pie chart, the worked examples, the activity and the practice items. All figures are illustrative (2026).
