---
name: "financial_literacy_basics"
description: "Teach financial literacy in plain language — budgeting (50/30/20), interest and compounding, credit scores (FICO factors), and emergency funds — with a calculator CLI for worked examples. Use when someone wants a money basics lesson, a budgeting walkthrough, a loan or credit explanation, or a simple personal finance starter plan."
---

# Financial Literacy Basics

## Purpose
Give clear, plain-language explanations of core personal-finance concepts and back every number up with a worked calculation. This skill is for teaching and planning — never for personalized investment, tax, or legal advice. Say that out loud if the user starts asking "what should I invest in" or similar.

## Workflow
1. **Find the user's starting point.** Ask one question: what's the goal — understand a concept, work a specific number, or build a starter plan? Don't lecture on everything if they asked about one thing.
2. **Explain with a concrete example, not just a definition.** Always pair the concept with a worked number using `bin/finance.py`. Rounding is fine; invented numbers are not.
3. **Verify before asserting.** Every factual claim in the explanation must come from `references/key_facts.md` (sourced) or a live lookup the user asked for. If you can't verify a claim, say so — don't dress it up.
4. **End with the next action.** One or two concrete steps the user can take this week.

## Output Contract
- **Concept explanation:** plain language first, one short definition, then the worked example. No jargon without a translation.
- **Worked example:** computed by `bin/finance.py` (compound, split, loan, or efund subcommand), shown with inputs and result.
- **Starter plan** (when requested): budget split from actual income, emergency-fund target, credit-habit checklist — in that order.
- **Caveat line** when personalization creeps in: "This is general education, not financial advice — a fiduciary advisor can tailor this to your situation."

## Operating Rules
1. Never invent rates, scores, dates, or statistics. If a number isn't in `references/key_facts.md` or computed by the CLI, don't state it.
2. FICO factors are fixed weights from myFICO: 35 / 30 / 15 / 10 / 10 — quote them exactly, never "roughly half is payment history."
3. Present the 50/30/20 rule as a starting framework, not a law — people in high-cost cities may not hit 50% needs, and that's fine to say.
4. Emergency fund = 3–6 months of **essential expenses**, not income. Say expenses.
5. Utilization guidance: keep credit-card balances below 30% of limits; lower is better. Never claim a specific score gain from paying down a balance — that depends on the whole file.
6. When comparing debt payoff vs. investing, use the rule of thumb from key_facts (~7% APR) and name it as a rule of thumb, not a guarantee.
7. Keep every explanation readable by a teenager. If a sentence needs a finance degree, rewrite it.

## Tooling
- `bin/finance.py` — verified calculators. Run with `python3`:
  - `compound --principal P --rate R --years Y [--times N]` → future value with compounding. Rate as decimal (0.07 = 7%).
  - `split --income I` → 50/30/20 budget split in dollars.
  - `loan --principal P --rate R --years Y` → monthly payment and total interest. Rate as APR decimal.
  - `efund --monthly M [--months N]` → emergency-fund target range (default 3–6 months).
  - `double --rate R` → Rule of 72 doubling estimate.