Vocabulary

• Budget – A financial plan for a defined period, often one year.
• Income – The amount of money received during a period in consideration for labor or services.
• Expenses – The cost required for something; the money spent on something.
• Savings – The part of disposable income not spent but kept for future use.
• Investment – The action or process of investing money for profit or material result.
• Debt – An amount of money borrowed by one party from another.
• Credit – The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.
• Interest Rate – The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.
• Loan – A sum of money that is borrowed, often from a bank, and has to be paid back, usually along with an additional amount of money that you have to pay as a charge for borrowing.
• Mortgage – A legal agreement by which a bank or other creditor lends money at interest in exchange for taking the title of the debtor's property.
• Financial Planning – The task of determining how a business will afford to achieve its strategic goals and objectives.
• Retirement Planning – The process of determining retirement income goals and the actions necessary to achieve those goals.
• Tax – A compulsory contribution to state revenue, levied by the government on workers' income and business profits.
• Insurance – A contract in which an individual or entity receives financial protection or reimbursement against losses.
• Risk – A situation involving exposure to danger in terms of finance.
• Return – The profit or income generated by saving and investing.
• Liquidity – The availability of liquid assets to a market or company.
• Asset – A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide a future benefit.
• Liability – A company's legal financial debts or obligations that arise during the course of business operations.
• Equity – The residual interest in the assets of an entity after deducting liabilities.
• Capital – Wealth in the form of money or other assets owned by a person or organization or available for a purpose such as starting a company or investing.
• Cash Flow – The total amount of money being transferred into and out of a business.
• Profit – A financial gain, the difference between the amount earned and the amount spent.
• Financial Literacy – The ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing.
• Diversification – The process of allocating capital in a way that reduces the exposure to any one particular asset or risk.
• Dividend – A sum of money paid regularly by a company to its shareholders out of its profits.
• Inflation – The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.
• Deflation – Reduction of the general level of prices in an economy.
• Bankruptcy – A legal proceeding involving a person or business that is unable to repay their outstanding debts.
• Credit Score – A numerical expression based on a level analysis of a person's credit files, to represent the creditworthiness of an individual.
• Bond – A fixed income instrument that represents a loan made by an investor to a borrower.
• Stock – A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.
• Mutual Fund – An investment program funded by shareholders that trades in diversified holdings and is professionally managed.
• ETF – Exchange Traded Fund, a type of investment fund and exchange-traded product, with shares that are bought or sold on a stock exchange the same as a regular stock.
• Real Estate – Property consisting of land or buildings.
• Forex – The foreign exchange market where currencies are traded.
• Commodities – Basic goods used in commerce that are interchangeable with other goods of the same type.
• Index Fund – A type of mutual fund with a portfolio constructed to match or track the components of a financial market index.
• Option – A financial derivative that represents a contract sold by one party (the option writer) to another party (the option holder).
• Hedge Fund – A limited partnership of investors that uses high risk methods, such as investing with borrowed money, in hopes of realizing large capital gains.
• Derivative – A financial security with a value reliant upon or derived from an underlying asset or group of assets.
• Pension – A regular payment made during a person's retirement from an investment fund to which that person or their employer has contributed during their working life.
• Annuity – A fixed sum of money paid to someone each year, typically for the rest of their life.
• Treasury Bond – A government debt security with a maturity of more than 10 years.
• Revenue – The income generated from normal business operations.
• Depreciation – The gradual decrease in the economic value of the capital stock of a firm, nation or other entity, either through physical depreciation, obsolescence or changes in the demand for the services of the capital in question.
• Collateral – Something pledged as security for repayment of a loan, to be forfeited in the event of a default.
• Leverage – The use of borrowed money to increase the potential return of an investment.
• Portfolio – A range of investments held by a person or organization.
• Cryptocurrency – A digital or virtual currency that uses cryptography for security.