Plain-language definitions
Money glossary
54 key terms from every lesson. Search for a word or jump to its lesson.
54 terms
A
- Annual percentage rate (APR)
- A measure of borrowing cost expressed as a yearly rate, with defined inclusions. Debt & borrowing →
- Annual percentage yield (APY)
- The yearly return on a deposit, including the effect of compounding. Saving →
B
- Balance
- The amount still owed on an account. Debt & borrowing →
- Bond
- A loan to a government or company that typically pays interest. Investing fundamentals →
C
- Coinsurance
- Your share of costs as a percentage after meeting the deductible. Insurance & risk →
- Compound interest
- Interest calculated on principal and previously earned interest. Interest & compound interest →
- Copay
- A fixed amount paid for a covered service, such as $25 for a doctor visit. Insurance & risk →
- Coverage limit
- The maximum an insurer pays for a covered loss under policy terms. Insurance & risk →
- Credit bureau
- A company that collects and reports consumer credit information. Credit scores & reports →
- Credit report
- A record of certain credit accounts and payment history. Credit scores & reports →
- Credit score
- A number calculated using information and a scoring model. Credit scores & reports →
- Credit utilization
- The share of available revolving credit you are using, such as $300 of a $1,000 limit (30%). Credit scores & reports →
D
- Deductible
- An amount a policyholder may pay before certain coverage applies. Insurance & risk →
- Diversification
- Spreading investments across different assets to reduce concentration risk. Investing fundamentals →
E
- Emergency fund
- Money reserved for unexpected expenses. Saving →
F
- FAFSA
- Free Application for Federal Student Aid, used to apply for federal grants, work-study, and loans. College & career finance →
- FDIC insurance
- Federal protection for deposits at insured banks, generally up to $250,000 per depositor, per bank, per ownership category. Saving →
- FICA
- Payroll taxes for Social Security (6.2%) and Medicare (1.45%) withheld from most employees' wages. Taxes & paychecks →
- Fixed expense
- A cost that usually stays about the same each month. Budgeting →
- Form W-4
- A form employees give employers to set federal income tax withholding. Taxes & paychecks →
G
- Grant
- Financial aid that generally does not need to be repaid. College & career finance →
- Gross pay
- Pay before deductions. Taxes & paychecks →
H
- Hard inquiry
- A credit check made when you apply for new credit, which may slightly affect a score for a time. Credit scores & reports →
I
- Impulse purchase
- An unplanned purchase made on the spot, often driven by emotion. Financial decision-making →
- Income
- Money received, such as pay from a job. Budgeting →
- Index fund
- A fund designed to track a market index, often providing broad diversification. Investing fundamentals →
- Interest
- Money paid for the use of money, such as interest earned on a deposit. Saving →
- Investment
- An asset purchased with the expectation of possible future value or income. Investing fundamentals →
L
- Loan
- Money borrowed that is generally repaid under agreed terms. Debt & borrowing →
M
- Minimum payment
- The smallest payment accepted for an account during a billing period. Debt & borrowing →
N
- Need
- Something required for basic living or work, such as housing, food, or transportation. Budgeting →
- Net pay
- Pay remaining after deductions. Taxes & paychecks →
- Net price
- The cost of attendance minus grants and scholarships. College & career finance →
O
- Opportunity cost
- The next-best alternative not chosen. Financial decision-making →
- Out-of-pocket maximum
- The most you pay for covered services in a plan year before the plan pays 100%. Insurance & risk →
P
- Phishing
- Fake messages designed to trick people into sharing personal or financial information. Financial decision-making →
- Premium
- An amount paid for an insurance policy. Insurance & risk →
- Principal
- The starting amount borrowed or saved. Interest & compound interest →
- Principal (loan)
- The original amount borrowed, not including interest or fees. Debt & borrowing →
R
- Rate
- The percentage used to calculate interest over a stated period. Interest & compound interest →
- Risk
- The possibility that an outcome differs from what is expected, including loss. Investing fundamentals →
- Rule of 72
- A shortcut: 72 ÷ annual rate ≈ years for money to double. Interest & compound interest →
S
- Savings goal
- A specific amount set aside for something planned. Saving →
- Scam
- A deceptive attempt to obtain money or personal information. Financial decision-making →
- Scholarship
- Education funding that generally does not need repayment, subject to its terms. College & career finance →
- Simple interest
- Interest calculated only on the original principal. Interest & compound interest →
- Stock
- A share of ownership in a company. Investing fundamentals →
- Student loan
- Money borrowed to pay education costs and generally repaid with interest. College & career finance →
T
- Tax refund
- Money returned when more tax was withheld or paid than was owed. Taxes & paychecks →
- Tradeoff
- What someone gives up when choosing one option over another. Financial decision-making →
- Tuition
- The amount charged for instruction. College & career finance →
V
- Variable expense
- A cost that can change from month to month. Budgeting →
W
- Want
- Something nice to have that is not required, such as streaming services or eating out. Budgeting →
- Withholding
- Amounts withheld from pay and sent toward taxes or other obligations. Taxes & paychecks →