Personal Goals, Budgeting, and Investing

Topics

1. 5.1 Taxes, Net Income, and BudgetingHow to read a pay stub, the taxes individuals pay, and how to build a monthly budget on the money that actually lands in your account.
2. 5.2 Managing Personal RiskPersonal, property, and liability risk, how a policy and a premium work, how to choose coverage, and how to recognize fraud.
3. 5.3 Saving and Investing for Education, Housing, and Retirement GoalsSaving and investing toward education, housing, and retirement, and how compounding, fees, taxes, and your own biases shape what you end up with.

Hillcrest Market

Sadie is eighteen, works the front end at a neighborhood grocery called Hillcrest Market, and lives at home. In Unit 3 she funded a music festival weekend by automating a forty dollar transfer every Friday into a credit union savings account, and she reached the festival with about thirty dollars to spare. Unit 5 is the same habit at adult scale: her first full-time paycheck, her first car, her first insurance decision, and her first retirement account. The recurring object is the standing order itself, the same Friday automation at three sizes.

Sadie, eighteen, front-end clerk at Hillcrest Market, full-time for the summer after graduation and part-time again in the fall while at community college

1. The first Friday of June, Sadie starts a full-time seasonal role at $14.00 an hour, a one dollar raise, and her first forty-hour week grosses $560.00, which is what her whole month used to run on. The deposit lands at $474.16. She reads the stub line by line, learns that the summer's federal withholding will come back as a $348 refund while the $514.08 of payroll tax stays paid, and builds a summer budget on $1,896 a month with a $300 Friday transfer at the top of it.

   Gross pay, mandatory and voluntary deductions, net pay, the five taxes individuals pay, and how a budget is built on net rather than gross. · 5.1

2. On the first Friday of August she pays $3,080 in cash for an eleven-year-old hatchback, having walked past a buy-here-pay-here lot whose $4,995 car would have cost $7,014. She takes the cheapest of three liability quotes at $164 a month, declines full coverage after running the numbers, and redirects the Friday transfer into an emergency fund that reaches $1,714 by September. Late in September she scrapes a parked car, almost files the claim, and pays the $450 herself instead.

   Personal, property, and liability risk, how premiums, deductibles, and claims work, matching coverage to risk tolerance, and defending against predatory lending and fraud. · 5.2

3. In September she starts at the community college on a business track, drops back to eighteen hours a week, and rebuilds the budget on $905 a month with three lines aimed at three futures: $175 to the tuition payment plan, $100 to the emergency fund, and $100 to a new retirement account holding one broad market index fund. In October the market dips, her first statement reads minus eighteen dollars, and she leaves the transfer running.

   Funding education, housing, and retirement, the ladder of financial assets, compounding and what fees, taxes, inflation, and bias take from a return, and matching each goal to a time horizon and an account. · 5.3

What is free and what is paid

• Free: every lesson video, the notes, worked examples, the glossary, this unit’s story and the diagnostic.
• Free with an account: progress tracking and saved flashcard state.
• Paid: the unit question bank is still in review and is not on sale yet.

The unit cheat sheet covers 8 sections.