Unit 5: Personal Goals, Budgeting, and Investing
The culminating personal-finance unit. Students act as financial advisors to a fictional household — interpreting pay stubs, building budgets, evaluating insurance coverage, and recommending saving and investing strategies for long-term goals (postsecondary education, housing, retirement, charitable giving). Anchored by the Financial Advisor Project.
Topics in this unit
5.1 Taxes, Net Income, and Budgeting
Types of taxes individuals pay (income, capital gains, payroll, property, sales); why federal income tax bills vary by income level, deductions, and credits, and how the U.S. progressive bracket structure works; components of a pay stub (gross income, mandatory and voluntary deductions, pretax deductions, net income) and how to read one to plan a household budget.
5.2 Managing Personal Risk
Insurable risks (personal, property, liability) and the insurance types individuals use to transfer them (health, auto, homeowner's, renter's, life); how premiums, coverage levels, and deductibles trade against risk tolerance, legal requirements, and number of dependents; protection against predatory lending, identity theft, phishing, and other forms of financial fraud.
5.3 Saving and Investing for Education, Housing, and Retirement Goals
How financial planning supports long-term goals (postsecondary education funding, mortgage-financed home purchase, retirement income from Social Security plus employer-sponsored plans plus personal investments, and charitable giving); factors that shape returns on financial assets — risk vs return, compounding, fees, taxes, inflation, and behavioral biases like overconfidence and loss aversion; recommending a saving and investment plan with diversification, calibrated to time horizon and risk tolerance.
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