List what you own and what you owe, then calculate net worth as assets minus liabilities. You’ll learn to read a personal balance sheet as a snapshot of your financial starting point.

Trace money coming in and going out over a month, separating income from expenses. You’ll see how cash flow reveals whether you have a surplus to direct toward goals or a gap to fix first.

Sort expenses into fixed, variable, necessary, discretionary, and irregular costs so your budget does not miss real-life bills. You’ll turn lumpy expenses like insurance, repairs, and gifts into monthly planning amounts.

Apply the previous explanations in a guided problem.

Write goals with a purpose, dollar amount, deadline, and priority, then separate short-term needs from long-term investing goals. You’ll recognize which money should stay accessible and which money can be committed for longer periods.

Combine your balance sheet, cash flow, bills, debt payments, and near-term cash needs to estimate how much is truly available to invest. You’ll identify a practical monthly investing amount without confusing temporary cash with long-term surplus.

Apply the previous explanations in a guided problem.

Check your understanding with a short quiz.

Review this chapter with practice based on your mistakes.