Income Engine Slides The Income Engine
Earning & Budgeting Essentials
The Paycheck Reality
Gross Pay
The total amount you earn before any deductions are taken out.
Net Pay
"Take-home pay" — what's left after taxes and other deductions.
Common Deductions
Federal Income Tax
Social Security (FICA)
Medicare
State/Local Taxes
Health Insurance & 401(k)
Why Budget?
A budget isn't a restriction on your spending; it's a permission to spend on the things that matter most.
Goal Setting
Stress Reduction
Financial Freedom
The 50/30/20 Rule
50%
Needs
Rent, Utilities, Groceries, Transportation, Basic Insurance.
30%
Wants
Dining out, Hobbies, Streaming services, Travel, Shopping.
20%
Financial
Savings, Debt repayment, Investing for the future.
Building the Habit
1
Track Every Cent
Use an app, spreadsheet, or notebook. Knowledge is power.
2
Automate Savings
Pay yourself first. Move money to savings before you can spend it.
3
Review Monthly
Your life changes, and your budget should change with it.
"A budget is telling your money where to go instead of wondering where it went."
— John Maxwell
Paycheck Planner Worksheet Paycheck Planner
Wealth Wisdom: Lesson 1
Name:
Date:
Part 1: Anatomy of a Paystub
Scenario
Jordan works as a Graphic Design Assistant. Their Gross Pay for the current two-week pay period is $1,840.00. Below are the deductions for this period:
Federal Income Tax: $184.00
Social Security (6.2%): $114.08
Medicare (1.45%): $26.68
State Tax (5%): $92.00
Health Insurance: $75.00
401(k) Contribution: $50.00
1. Calculate the Total Deductions for this pay period (Show your work):
2. Calculate Jordan's Net Pay (Take-home pay):
3. What percentage of Jordan's Gross Pay is being taken out for taxes and benefits? (Round to nearest percent):
Part 2: The 50/30/20 Budget
Using Jordan's calculated Net Pay from Part 1, allocate their funds according to the 50/30/20 rule.
Needs (50%)
Rent, groceries, bills
$
Wants (30%)
Fun, hobbies, dining out
$
Savings (20%)
Emergency fund, investing
$
Critical Thinking
Jordan realizes their monthly rent and utilities alone cost $1,200. Does this fit within their "Needs" budget based on two bi-weekly paychecks? Explain why or why not.
If Jordan wanted to save $5,000 for a down payment on a car, roughly how many months of saving their full 20% would it take?
Income Engine Answer Key Answer Key
Paycheck Planner Worksheet
Wealth Wisdom Unit
Lesson 1
Part 1: Anatomy of a Paystub
1. Total Deductions:
$184.00 + $114.08 + $26.68 + $92.00 + $75.00 + $50.00 = $541.76
2. Net Pay Calculation:
$1,840.00 - $541.76 = $1,298.24
3. Percentage of Gross Pay Deducted:
($541.76 ÷ $1,840.00) × 100 = 29.44% ≈ 29%
Part 2: The 50/30/20 Budget
Calculations based on $1,298.24 Net Pay:
Needs (50%)
$649.12
Wants (30%)
$389.47
Savings (20%)
$259.65
Critical Thinking: Rent Analysis
Jordan's monthly "Needs" budget is $1,298.24 ($649.12 x 2 paychecks). Since rent/utilities are $1,200, this leaves only $98.24 for the entire month for groceries, transportation, and other needs. Conclusion: No, this does not comfortably fit. Jordan is "house-poor" and will likely struggle to cover other basic needs.
Critical Thinking: Savings Timeline
Monthly Savings = $259.65 x 2 = $519.30.9.63 months .10 months of consistent saving.
Growth Factor Slides The Growth Factor
Saving & Investing for the Future
Compound Interest
Interest earned on both the original principal and the accumulated interest from previous periods.
The Compound Effect
"He who understands it, earns it... he who doesn't, pays it."
Time is your best friend
$10,000 at 7% for 10 years: $19,671
$10,000 at 7% for 20 years: $38,696
For 40 years: $149,744
The Risk-Reward Spectrum
Low Risk
High Risk
Savings Account
Gov. Bonds
Mutual Funds
Individual Stocks
Crypto/Options
Generally, to earn a higher potential return, you must accept a higher risk of loss. This is the fundamental trade-off of investing.
Don't Put All Your Eggs...
What is Diversification?
Spreading your investments across different assets (stocks, bonds, real estate, etc.) to reduce risk.
Limits impact of one failure
Smoother long-term returns
Essential for long-term health
Mutual Funds
A pool of money from many investors used to buy a variety of stocks/bonds.
Index Funds
A type of mutual fund that tracks a specific market index like the S&P 500.
The Best Time to Plant a Tree?
Twenty years ago. The second best time is now.
Key Takeaway
Investing isn't about "beating the market" or getting rich quick. It's about using time and consistent contributions to build lasting wealth.
Investment Insight Worksheet Investment Insight
Wealth Wisdom: Lesson 2
Name:
Date:
Part 1: The Magic of Time
Consider two investors, Alex and Sam. Both want to retire at age 65. They both earn an average annual return of 7%.
Alex: Starts investing $200/month at age 25. Stops at age 35 (10 years).
Sam: Starts investing $200/month at age 35. Continues until age 65 (30 years).
1. Who do you think will have more money at age 65? Why?
The Actual Results:
Alex: ~$288,000
Sam: ~$242,000
2. Explain why Alex ended up with more money despite investing $48,000 less than Sam.
Part 2: Build Your Portfolio
You have $1,000 to "invest" in a hypothetical portfolio. Decide how much to allocate to each asset class based on your personal risk tolerance.
Savings Account
0.5% return | Minimal Risk
$
Index Fund (Stocks)
7-10% return | Moderate Risk
$
Government Bonds
2-4% return | Low Risk
$
Single Stock (Tech Startup)
Possible 50% or -100% | High Risk
$
3. Explain the reasoning behind your allocation. Why did you choose this specific mix?
4. Define "Diversification" in your own words and explain how your portfolio above demonstrates it (or doesn't).
Growth Factor Answer Key Answer Key
Investment Insight Worksheet
Wealth Wisdom Unit
Lesson 2
Part 1: The Magic of Time
1. Initial Prediction:
Answers will vary. Most students initially guess Sam because they invested for 30 years instead of 10.
2. Why Alex ended up with more:
The most critical factor in compound interest is time . Because Alex started 10 years earlier, their money had an extra decade to compound. Even though they stopped contributing, the "engine" of compound interest was already large enough that it outperformed Sam's much larger total contributions. This demonstrates that when you start is often more important than how much you invest.
Part 2: Build Your Portfolio
3. Reasoning for Allocation:
Student answers should reflect their risk tolerance. Conservative: Higher weight in Savings/Bonds. Aggressive: Higher weight in Index Funds/Single Stocks. Key look-for: Do they acknowledge the trade-off between safety and growth?
4. Defining Diversification:
Definition: Spreading investments across different types of assets to minimize the impact of any single asset's poor performance.
Portfolio Context: If they put all $1,000 into the Tech Startup, they are NOT diversified (concentrated risk). If they spread it across all four, they ARE diversified. The Index Fund itself provides "built-in" diversification because it holds hundreds of companies.
Credit Code Slides The Credit Code
Borrowing, Interest, & Credit Scores
Credit: Buy Now, Pay Later
Credit is the ability to borrow money or access goods/services with the understanding that you'll pay for them later.
The Catch: Interest
Interest is the "rent" you pay to use someone else's money.
Types of Credit
Revolving: Credit cards (flexible balance)
Installment: Car loans, Mortgages (fixed)
Secured: Backed by collateral (house/car)
The FICO Score Breakdown
35% Payment History
30% Amounts Owed
15% History Length
10% New Credit
10% Credit Mix
Scores range from 300 to 850. Higher is better.
The Cost of Interest
Scenario: $5,000 Credit Card Balance
Minimum Payments Only
Time to pay off: 18 Years
Total Interest Paid: $6,300
Fixed $250 / Month
Time to pay off: 2 Years
Total Interest Paid: $980
Always pay more than the minimum!
Knowledge Check
Discussion Point 1
Why might a lender prefer a borrower with a 750 score over one with a 600 score?
Discussion Point 2
How can a student begin building credit before they have a full-time job?
Pro-Tip
Paying your bills on time is 35% of your score. It is the single most important habit you can build.
Loan Logic Worksheet Loan Logic
Wealth Wisdom: Lesson 3
Name:
Date:
Part 1: The Score Effect
Two friends are buying the exact same car for $25,000. They both take out a 5-year (60 month) loan.
Maria (Credit Score: 760)
APR Interest Rate: 4.5%
Monthly Payment: $466
Chris (Credit Score: 580)
APR Interest Rate: 16.0%
Monthly Payment: $608
1. Calculate the total cost of the car for Maria (Monthly Payment x 60):
2. Calculate the total cost of the car for Chris (Monthly Payment x 60):
3. How much extra did Chris pay for the exact same car because of his lower credit score?
Part 2: Myth vs. Reality
Circle whether each statement is a Myth or a Reality, then explain your answer.
"Carrying a small balance on my credit card every month helps my score."
Myth Reality
"Closing an old credit card account I don't use can actually lower my score."
Myth Reality
"If I miss one payment, my credit score will stay the same if I pay it next month."
Myth Reality
Final Reflection
Based on what you've learned, write one piece of advice you would give to someone opening their first credit card next week.
Credit Code Answer Key Answer Key
Loan Logic Worksheet
Wealth Wisdom Unit
Lesson 3
Part 1: The Score Effect
1. Total Cost for Maria:
$466 x 60 months = $27,960
2. Total Cost for Chris:
$608 x 60 months = $36,480
3. The Difference:
$36,480 - $27,960 = $8,520
Chris paid $8,520 more for the exact same vehicle over the life of the loan.
Part 2: Myth vs. Reality
Myth #1: Carrying a Balance
MYTH
Carrying a balance does not help your score; it only costs you money in interest. Paying your statement in full every month shows responsibility and keeps your credit utilization low.
Myth #2: Closing Old Accounts
REALITY
Closing an old account reduces your "length of credit history" and lowers your total available credit, which can hurt your score. It's usually better to keep old cards open (if they have no annual fee).
Myth #3: Missing One Payment
MYTH
Payment history is the largest factor (35%) in your FICO score. Just one payment missed by 30 days or more can significantly drop your score, sometimes by 50-100 points.
Safety Shield Slides The Safety Shield
Insurance & Wealth Protection
The Purpose of Insurance
Insurance is a legal contract that transfers the risk of financial loss from an individual to an insurance company.
Key Vocabulary
Premium: The price you pay for the policy.
Deductible: What you pay out-of-pocket before insurance kicks in.
The Trade-off
Lower Premium = Higher Deductible
Higher Premium = Lower Deductible
"Insurance is something you hope you never have to use, but can't afford to be without."
Types of Protection
Health
Covers medical expenses, surgeries, and prescriptions for you and your family.
Auto
Protects against damage to your car and your liability for injuries to others.
Home/Renters
Covers structures and personal belongings against theft, fire, and natural disasters.
Disability
Provides a portion of your income if you are unable to work due to illness or injury.
Life
Provides financial support to your beneficiaries in the event of your death.
Stage of Life
The insurance you need changes as you gain assets and start a family.
Digital Defense
Common Threats
Phishing: Fake emails or texts designed to steal your private info.
Skimming: Hidden devices on ATMs that steal your card data.
Data Breaches: Hacks on major companies that leak your info.
What should you monitor?
Bank Statements
Credit Reports
Report any unrecognized activity immediately.
The Ultimate Shield
The Emergency Fund
Aim for 3-6 months of essential living expenses. This is your first line of defense against life's "what-ifs."
Risk Radar Worksheet Risk Radar
Wealth Wisdom: Lesson 4
Name:
Date:
Part 1: Insurance Matchmaker
Identify which type of insurance would primarily handle each situation.
1. A pipe bursts in your apartment and ruins your laptop and furniture.
2. You break your arm while playing soccer and need an X-ray and a cast.
3. You back into another car in the parking lot, causing $1,500 in damage.
4. You are unable to work for 6 months due to a chronic back injury.
Part 2: The Trade-Off
Case Study: Auto Insurance
You are choosing between two auto insurance plans. Both offer the same coverage.
Plan A
Monthly Premium: $180
Deductible: $250
Plan B
Monthly Premium: $110
Deductible: $1,000
5. If you have an accident that costs $2,000 to repair, how much do you pay out-of-pocket for each plan?
6. Which plan would be better for someone who has a large emergency fund? Explain why.
Part 3: Security Audit
List three specific actions you can take this week to improve your financial security and protect your identity.
1
2
3
Why is an "Emergency Fund" considered the most important part of a wealth protection strategy?
Safety Shield Answer Key Answer Key
Risk Radar Worksheet
Wealth Wisdom Unit
Lesson 4
Part 1: Scenario Matchmaker
1. Pipe bursts / Apartment damage: Renters Insurance
2. Broken arm / X-ray: Health Insurance
3. Parking lot accident: Auto Insurance (Liability)
4. Chronic back injury / No work: Disability Insurance
Part 2: The Trade-Off
5. Out-of-pocket costs ($2,000 repair):
Plan A: $250 (The deductible)
Plan B: $1,000 (The deductible)
6. Plan Choice for Emergency Fund Owners:
Plan B is often better for those with a large emergency fund. Since they can afford the $1,000 deductible if an accident occurs, they can save $70 per month ($840 per year) on premiums. Over time, the savings in premiums will far exceed the higher deductible cost.
Part 3: Security & Emergency Fund
Actions to Improve Security (Examples):
Enable Two-Factor Authentication (2FA) on bank accounts.
Set up transaction alerts on credit/debit cards.
Freeze credit reports with the three major bureaus.
Importance of the Emergency Fund:
An emergency fund is the most important part because it covers the "gaps" in insurance (like deductibles) and handles risks that aren't easily insurable (like a sudden job loss). It prevents you from having to go into high-interest debt when life happens, preserving your overall wealth and financial peace of mind.
