Money Vocabulary

Plain-language definitions of words used throughout the course. Search by word or meaning.

Search terms

51 terms shown

A

APR (annual percentage rate): The yearly cost of borrowing, including interest and some fees, shown as a percentage.; See it in a sentence: The card's 24% APR meant carrying a balance would cost more than with the 12% loan.
Available balance: The money in an account you can use right now, after pending transactions and holds.; See it in a sentence: Her balance said $120, but her available balance was $75 because of a pending purchase.

B

Balance: The amount of money in an account, or the amount still owed on a debt.; See it in a sentence: He checked his card balance before paying it in full.
Budget / spending plan: A plan for how incoming money will be used for needs, wants, savings, and debts.; See it in a sentence: Jordan's spending plan covers rent with the first paycheck of the month.

C

Cash flow: The timing of money coming in and going out.; See it in a sentence: Rent was due before payday, so Leo had a cash flow gap that week.
Checking account: A bank or credit union account for everyday deposits, purchases, and bill payments.; See it in a sentence: Her paycheck goes into her checking account by direct deposit.
Closing costs: Fees paid to complete a home purchase, such as lender, title, and recording fees.; See it in a sentence: Besides the down payment, they budgeted for closing costs.
Collateral: Something of value that backs a secured loan and may be taken if payments stop.; See it in a sentence: The car was collateral for the auto loan.
Credit: The ability to borrow money or buy now and pay later, based on a promise to repay.; See it in a sentence: The store offered credit, but she compared the APR first.
Credit history: The record of how you've used and repaid credit over time.; See it in a sentence: Paying his card on time each month built his credit history.
Credit report: A record from a credit bureau listing your credit accounts, balances, and payment history.; See it in a sentence: She reviewed her credit report and disputed an account she didn't open.
Credit score: A number calculated from credit report information to estimate how likely someone is to repay.; See it in a sentence: Different scoring models can give slightly different credit scores.
Credit utilization: How much of your available credit limit you're using, shown as a percentage.; See it in a sentence: Using $100 of a $500 limit is 20% credit utilization.

D

Debit card: A card that pays directly from your checking account. It isn't borrowing.; See it in a sentence: He used his debit card for groceries, so the money left his account right away.
Debt: Money you owe and must repay, often with interest.; See it in a sentence: Her student loan and credit card balance were her two debts.
Deductions: Amounts taken out of gross pay, such as taxes or benefits.; See it in a sentence: Deductions of $95 brought gross pay of $600 down to $505.
Deposit: Money added to an account.; See it in a sentence: She made a cash deposit at the branch.
Depreciation: The loss of an item's value over time, especially for vehicles.; See it in a sentence: Because of depreciation, the car was worth less than the loan balance after one year.
Direct deposit: Pay sent electronically from an employer or agency straight into an account.; See it in a sentence: With direct deposit, his paycheck arrives on Friday morning.
Down payment: The upfront portion of a purchase price you pay yourself instead of borrowing.; See it in a sentence: A $2,000 down payment lowered the amount financed on the car.

E

Emergency fund: Money set aside for unexpected costs like repairs or a lost shift.; See it in a sentence: Her small emergency fund covered a $60 phone repair.
Escrow: An account, often managed by a mortgage lender, that holds money to pay property taxes and insurance.; See it in a sentence: Part of the monthly mortgage payment goes into escrow.
Expense: Money spent on something.; See it in a sentence: Bus fare is one of his weekly expenses.

F

Fixed expense: A cost that stays about the same each time it's due.; See it in a sentence: Her $45 phone plan is a fixed expense.

G

Gross pay: Total earnings before any deductions.; See it in a sentence: Casey's gross pay was $600 for 40 hours.

H

HOA fee: A regular fee paid to a homeowners association for shared costs like upkeep of common areas.; See it in a sentence: The condo's $200 HOA fee was part of the all-in monthly cost.

I

Insurance: Coverage you pay for that helps cover certain losses, like damage, theft, or medical costs.; See it in a sentence: Car insurance was a big part of Rosa's total transportation cost.
Interest: The cost of borrowing money, or money earned on savings.; See it in a sentence: Paying the card in full meant he paid no interest.

L

Lease: A contract to rent property for a set time under certain terms.; See it in a sentence: Kai read the lease's early-termination section before signing.
Loan term: How long you have to repay a loan.; See it in a sentence: A 72-month loan term lowered the payment but raised total interest.

M

Maintenance: Routine upkeep to keep a vehicle or home working, like oil changes or fixing a leak.; See it in a sentence: She set aside $40 a month for car maintenance.
Minimum payment: The smallest amount you must pay on a debt to stay current.; See it in a sentence: Paying only the minimum meant the balance shrank slowly.
Mortgage: A loan used to buy a home, secured by the home.; See it in a sentence: Their mortgage payment included principal, interest, and escrow.
Mortgage insurance: Insurance that protects the lender, sometimes required with a smaller down payment.; See it in a sentence: With 5% down, mortgage insurance was added to the payment.

N

Net pay / take-home pay: What you receive after deductions from gross pay.; See it in a sentence: Sam plans the budget with net pay, not gross pay.

O

Overdraft: Spending or withdrawing more than is available in an account, which may cause a fee.; See it in a sentence: She opted out of overdraft coverage so purchases are declined instead.

P

Pending transaction: A purchase or deposit that's approved but not fully processed yet.; See it in a sentence: The pending gas charge lowered his available balance.
Principal: The amount borrowed or still owed, not counting interest.; See it in a sentence: Each payment reduced the principal a little.
Property taxes: Taxes paid to local government based on a property's value.; See it in a sentence: Property taxes were collected monthly through escrow.

R

Rent: A regular payment to live in or use property owned by someone else.; See it in a sentence: Rent is due on the 1st, with a five-day grace period.
Renter's insurance: Insurance that covers a renter's belongings and certain liability.; See it in a sentence: Renter's insurance helped replace his laptop after a break-in.

S

Savings account: An account for keeping money separate for goals or emergencies, sometimes earning interest.; See it in a sentence: She moves $20 to her savings account each payday.
Secured debt: Debt backed by collateral, like an auto loan or mortgage.; See it in a sentence: Because the auto loan is secured debt, the car could be repossessed if payments stop.
Security deposit: Money paid to a landlord upfront to cover possible damage or unpaid rent, often returnable.; See it in a sentence: He took photos at move-in to help get his security deposit back.
Sinking fund: Money set aside a little at a time for a known future cost.; See it in a sentence: Her $10-a-month sinking fund covers a yearly $120 fee.

T

Total cost of ownership: Everything an item costs over time, not just the price — for a vehicle, financing, insurance, fuel, maintenance, and more.; See it in a sentence: The total cost of ownership made the cheaper car more expensive overall.
Trade-in value: What a dealer offers for your current vehicle toward a new purchase.; See it in a sentence: She researched trade-in value before visiting the dealer.

U

Unsecured debt: Debt with no collateral, like most credit cards.; See it in a sentence: Credit cards are unsecured debt and often have higher APRs.
Utilities: Services like electricity, gas, water, trash, and internet.; See it in a sentence: Utilities added $140 a month to the apartment's cost.

V

Variable expense: A cost that changes from month to month.; See it in a sentence: Groceries are a variable expense for most people.

W

Withdrawal: Money taken out of an account.; See it in a sentence: He made a $40 withdrawal at an in-network ATM to avoid fees.