Definitions: the concept map

This section defines 171 personal-finance concepts for life in Germany — one concept per card, each with its German term, prerequisites, a worked example, and check questions. The cards are organized as a knowledge graph: three reading paths take you from month-one survival to advanced planning, and every card links the concepts it builds on.

How to use this section

Look something up. Every card answers "what is this?" in the first paragraph, then shows one worked example with real euro numbers. German terms are always given — the card for gross vs. net income is also the card for Brutto vs. Netto.

Or read along a path. Concepts carry a level:

Level	Path	Who it serves
1 — Basics	Survive & set up	Financially new in Germany (arrived or local): net vs. gross, the cost floor, savings rate, emergency fund, the banking layer, scam patterns
2 — Foundations	The working toolkit	Full-cost thinking, present value, the pension chain, insurance as a catastrophe filter, household money
3 — Advanced	The full map	Behavioral biases, allocation fine-tuning, mortgage mechanics, cross-border cases

Levels are prerequisite-closed: reading all level-1 cards in order never hits an unexplained concept, and level 2 only builds on levels 1–2.

Check yourself. Each card ends with two to five auto-graded questions. A solved card is marked "checked" in your browser — checked means you answered the questions, nothing more; no streaks, no mastery claims.

Cards define and illustrate; mechanics, current figures, and step-by-step guides live in the linked deep articles. Time-sensitive figures on cards are year-labeled and sourced. Nothing in this section is financial advice.

The map

171 of 171 published

Money basics (17)

• 1 Cost-of-living differences
• 1 Inflation
• 1 Median vs. mean
• 1 Nominal vs. real
• 1 Opportunity cost
• 1 Percentages and shares
• 1 Purchasing power
• 2 Cash flow vs. wealth
• 2 Discount rate
• 2 Expected value
• 2 Household net worth
• 2 Payback period
• 2 Present value (PV)
• 2 Probability basics
• 3 Marital property & account titling
• 3 Present value of an annuity
• 3 Risk-free rate

Income & taxes (14)

• 1 Gross vs. net income
• 1 Means-tested benefits
• 1 Minijob & Midijob bands
• 2 Capital gains tax
• 2 Marginal vs. average tax rate
• 2 Parental-leave economics (Elterngeld)
• 2 Progressive income tax
• 2 Second-earner marginal rate
• 2 Social security contributions
• 2 Tax classes & spousal splitting
• 2 Withholding vs. assessment
• 3 Equity compensation (RSU/ESPP)
• 3 Loss carryforward
• 3 Tax residency & worldwide income

Spending decisions (26)

• 1 Budgeting frameworks (50/30/20 etc.)
• 1 Cold rent vs. warm rent
• 1 Consumption floor
• 1 Cost per use
• 1 Fixed vs. variable costs
• 1 Remittances as a fixed cost
• 1 Running costs
• 1 Sinking fund
• 1 Three-account structure (Floor / Future / Free)
• 2 Capitalization factor (~200–300×)
• 2 Capitalized value of a flow
• 2 Commitment reversibility
• 2 Commute cost accounting
• 2 Depreciation
• 2 Finite-commitment total (monthly × 12 × years)
• 2 Floor-killers (housing, transport, education)
• 2 Household money architecture
• 2 Location arbitrage
• 2 Residual-income comparison of offers
• 2 Smoothing irregular income
• 2 Total cost of ownership (TCO)
• 3 Ancillary costs
• 3 Fixed-cost ratio
• 3 German cost benchmarks (rent ratios etc.)
• 3 Rent-vs-buy framework
• 3 Resale value

Saving & debt (19)

• 1 Compound interest
• 1 Emergency fund
• 1 Interest rate
• 1 Liquidity
• 1 Overdraft credit (Dispo)
• 1 Pay-yourself-first
• 1 Rule of 72
• 1 Savings rate
• 1 Simple interest
• 2 Effective annual rate
• 2 Financing cost / consumer credit
• 2 Goal-based saving
• 2 Interest asymmetry (repaying debt = guaranteed return)
• 2 Rate beats returns (early on)
• 2 Real yield / real return
• 2 Savings ceiling
• 2 Savings gap
• 2 Subsidized education financing (BAföG-type)
• 3 Annuity loan & amortization

Banking & payments (4)

• 1 Credit score (Schufa)
• 1 Deposit insurance
• 1 Dunning & debt collection chain
• 1 SEPA direct debit & chargeback

Human capital (11)

• 2 Career-break cost
• 2 Credential recognition
• 2 Earning ceiling vs. earning floor
• 2 Education as capex on human capital
• 2 Human capital
• 2 Lifetime earnings profile
• 3 Bond-like vs. equity-like income
• 3 Career optionality
• 3 Depreciation of skills
• 3 Language skill as a human-capital multiplier
• 3 Portable vs. non-portable human capital

Investing (21)

• 2 Asset classes
• 2 Concentration risk
• 2 Cost drag / fees
• 2 Currency risk
• 2 Diversification
• 2 ETF
• 2 Risk vs. volatility
• 2 Savings plan (Sparplan)
• 2 Speculation vs. investing
• 2 Time horizon
• 3 Correlation
• 3 Equity risk premium
• 3 Euro-cost averaging
• 3 Glide path
• 3 Home bias
• 3 Leverage
• 3 Rebalancing
• 3 Sequence-of-returns risk
• 3 Suitcase portfolio test
• 3 Total economic portfolio (HC + financial capital + pension claims)
• 3 Total expense ratio (TER)

Insurance (11)

• 2 Occupational disability insurance (BU)
• 2 Over-insurance
• 2 Personal liability insurance
• 2 Risk of ruin / catastrophic risk
• 2 Risk pooling
• 2 Self-insurance
• 2 Statutory vs. private health insurance (GKV/PKV)
• 2 Surrender value & exit options
• 2 Term vs. bundled insurance products
• 3 Adverse selection / moral hazard
• 3 Long-term-care gap

Pensions (26)

• 2 Annual pension letter (Renteninformation)
• 2 Capital-forming benefits (VL)
• 2 Employer match — free money
• 2 Occupational pension (bAV)
• 2 Old-age basic security
• 2 Pay-as-you-go vs. funded
• 2 Pension points
• 2 Pension portability / totalization
• 2 Private provision (pillar 3)
• 2 Replacement rate
• 2 Replacement-rate gap (Rentenlücke)
• 2 Statutory pension
• 2 Three pillars of retirement
• 2 Waiting / qualifying period
• 3 Contribution refund
• 3 Decumulation
• 3 Demographics / dependency ratio
• 3 Derived pension rights
• 3 Estate / beneficiary basics
• 3 Financial-independence number
• 3 Longevity risk
• 3 Pension claiming age & adjustments
• 3 Pension taxation
• 3 Safe withdrawal rate
• 3 Vesting
• 3 Voluntary pension contributions

Money behavior (10)

• 2 Debt aversion
• 2 Hedonic adaptation
• 2 Lifestyle inflation
• 3 Anchoring
• 3 Behavior-proofing (behavior > information)
• 3 Mental accounting
• 3 Peer / cohort effects
• 3 Reaching for yield
• 3 Sticker-price bias
• 3 Sunk cost

Protection (12)

• 1 Affinity fraud / community pressure
• 1 Follow the incentive
• 1 MLM / pyramid schemes
• 1 Payment & identity scams
• 1 Red flag catalog
• 3 Building-savings contract (Bauspar)
• 3 Commission-driven "free" advice
• 3 Credit payment protection insurance
• 3 Jurisdiction / recourse gap
• 3 Lock-ups / illiquidity
• 3 Structured products
• 3 Unit-linked life policy