Vocabulary

• Financial Coaching – A process that aims to help individuals achieve their financial goals by providing one-on-one teaching and guidance.
• Financial Counseling – A service that offers advice and strategies to individuals struggling with financial difficulties.
• Budget – A financial plan that estimates income and expenses over a certain period of time.
• Debt – Money that needs to be repaid, usually with interest.
• Savings – The portion of income set aside for future use or emergencies.
• Credit Score – A numerical expression that represents a person's creditworthiness based on their credit history.
• Investment – The act of putting money into assets or ventures with the expectation of gaining a profit in the future.
• Retirement Planning – The process of determining retirement income goals and the actions necessary to achieve those goals.
• Financial Literacy – The ability to understand and use various financial skills, including personal financial management, budgeting, and investing.
• Interest Rate – The percentage of a loan amount that is charged as interest to the borrower.
• Loan – A sum of money that is expected to be paid back with interest.
• Mortgage – A loan secured by the collateral of some specified real estate property.
• Insurance – A contract that provides compensation for specific losses in exchange for a periodic payment.
• Tax Planning – The analysis of a financial situation or plan to ensure that all elements work together to allow you to pay the lowest taxes possible.
• Bankruptcy – A legal status of a person or other entity that cannot repay debts to creditors.
• Financial Risk – The possibility of losing money on an investment or the uncertainty of future returns.
• Asset – Anything of value that can be converted into cash.
• Liability – A company's legal debts or obligations that arise during the course of business operations.
• Equity – The ownership interest in a company of holders of its common and preferred stock.
• Diversification – A risk management strategy that involves mixing a variety of investments within a portfolio.
• 401(k) – A retirement savings plan sponsored by an employer that allows workers to save and invest a piece of their paycheck before taxes are taken out.
• IRA (Individual Retirement Account) – A type of savings account that is designed for retirement savings and offers tax advantages.
• Mutual Fund – An investment program funded by shareholders that trades in diversified holdings and is professionally managed.
• Bonds – A fixed income instrument that represents a loan made by an investor to a borrower.
• Stocks – A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.
• Capital Gains – The increase in value of a capital asset that gives it a higher worth than the purchase price.
• Dividend – A distribution of a company's earnings, decided by the board of directors, to a class of its shareholders.
• Inflation – The rate at which the general level of prices for goods and services is rising.
• 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.
• Exchange-Traded Fund (ETF) – A type of security that involves a collection of securities—such as stocks—that often tracks an underlying index.
• Annuity – A financial product that pays out a fixed stream of payments to an individual, primarily used as an income stream for retirees.
• Pension – A retirement plan that requires an employer to make contributions into a pool of funds set aside for a worker's future benefit.
• Real Estate – Property consisting of land or buildings.
• 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.
• Financial Planner – A professional who helps individuals and corporations meet their long-term financial objectives.
• Credit Card – A payment card issued to users to enable the cardholder to pay a merchant for goods and services based on the cardholder's promise to the card issuer to pay them for the amounts plus the other agreed charges.
• Credit Report – A detailed report of an individual's credit history prepared by a credit bureau.
• Personal Finance – The management of individual or family finances, including budgeting, saving, investing, and planning for the future.
• Compound Interest – The addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest.
• Emergency Fund – A stash of money set aside to cover the financial surprises life throws your way.
• Financial Advisor – A professional who provides financial services to clients based on their financial situation.
• Wealth Management – A high-level professional service that combines financial and investment advice, accounting and tax services, retirement planning, and legal or estate planning.
• Estate Planning – The preparation of tasks that serve to manage an individual's asset base in the event of their incapacitation or death.
• Tax-Advantaged – Refers to any type of investment, account, or plan that is either exempt from taxation, tax-deferred, or offers other types of tax benefits.
• Fixed Rate – An interest rate that does not change over the life of a loan or investment.
• Variable Rate – An interest rate that can change over time, based on a benchmark or index that it's tied to.
• Securities – A fungible, negotiable financial instrument that represents some type of financial value, usually in the form of a stock, bond, or option.
• Return on Investment (ROI) – A performance measure used to evaluate the efficiency of an investment or compare the efficiency of several different investments.
• Liquidity – The degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price.
• Net Worth – The amount by which assets exceed liabilities, providing a snapshot of financial health.