Financial Literacy

Studio Co-ordinator: Viddhi Patel and Kiran Saidane

Ishwari Gorwadkar

The Financial Literacy elective introduced us to an essential yet often overlooked dimension of architectural practice which is financial management. As architecture students, we are trained to think spatially and conceptually. We dedicate hours to designing, drafting, modelling, and presenting ideas often not knowing how much we will be earning. However, this course revealed that finance and learning about this gives you a sense of what you will be earning, about budgeting, taxation, bookkeeping, and financial responsibility.

This elective became an important bridge between academic learning and professional reality. The course began with the fundamentals of accounts and bookkeeping.

Bookkeeping, the process of recording income and expenses, forms the foundation of accounting. Before this course, terms such as debit, credit, assets, and liabilities appeared were often overlooked. Through simplified explanations and practical examples, we learned that bookkeeping is essentially a structured system of tracking money.

Budgeting proved to be one of the most significant takeaways. Design decisions cannot exist independently of cost implications. Every material selection, structural intervention, and technical installation carries financial weight. Preparing estimated project costs under defined categories such as construction, services, professional fees, and contingency reinforced the importance of feasibility. Creative vision must align with economic reality.

Practical classroom exercises - preparing invoices, planning holiday budgets, and organising monthly expenses - connected theoretical knowledge with everyday application. These activities demonstrated how structured financial planning reduces uncertainty and strengthens decision-making, both personally and professionally.

Exercise performed in class - calculating the budget for a trip to Jaipur, helping us understand the cost heads and contingencies one should take under consideration and how to manage them properly.

Exercise performed in class - preparing an invoice for architect’s fees, understanding CGST, SGST and the requirements of information to prepare an invoice.

We studied the Single Entry System, which records only income and expenses and is often incomplete and unreliable for professional practice. This led us to the Double Entry System, where every transaction is recorded as both debit and credit. Understanding this system clarified how financial transparency, balance, and accountability are maintained within firms. It also showed us how financial errors can be traced and corrected systematically.

The golden rules of accounts further strengthened our understanding:

1. Debit what comes in, credit what goes out (Real Account)

2. Debit the receiver, credit the giver (Personal Account)

3. Debit expenses and losses, credit income and gains (Nominal Account)

   
   

For architects managing consultancy fees, vendor payments, labour costs, and material purchases, this knowledge is fundamental. It ensures clarity in financial documentation and builds professional credibility.

The topic of bank reconciliation further emphasised precision. Comparing internal records with bank statements revealed how discrepancies can arise from minor delays or errors. Regular review and cross-verification ensure consistency and prevent complications. In professional practice, such vigilance builds trust with clients, consultants, and authorities.

Taxation was another area that significantly influenced professional understanding. Income tax, GST, and professional tax form an unavoidable part of practice. Awareness of deductible expenses — such as office rent, salaries, software subscriptions, utilities, and travel — demonstrated how organised documentation supports lawful tax planning. Filing returns on time and maintaining proper invoices are not optional formalities; they are indicators of credibility and legitimacy.

Many professional setbacks arise from weak financial management. Delayed filings, unrecorded expenses, or unclear documentation can lead to penalties and mistrust. Financial discipline, therefore, becomes as important as technical competence.

The study of final accounts, including trading accounts, profit and loss statements, and balance sheets, offered a broader perspective. These documents reflect not just profit or loss, but overall financial health of an individual or company. They help evaluate performance, control expenditure, and plan future growth. Professional success is not accidental; it is measured, reviewed, and strategically directed.

Overall, this elective offered a more grounded understanding of architecture as a profession that extends beyond studio work and presentations. It highlighted that behind every design lies budgeting, documentation, coordination, and accountability. Even small design decisions — selecting a material, modifying a layout, refining a detail — carry financial consequences that affect clients, consultants, and the larger community.

Financial literacy began to feel less like a technical subject and more like a practical way of thinking. It balances creativity with realism and responsibility, reminding designers that ideas must also be feasible and sustainable. Architecture is not only about imagining spaces, but about ensuring that those spaces can be executed and maintained effectively. The profession constantly negotiates between aspiration and practicality, and both require equal attention.