Account – a service provided by a bank allowing a customer’s money to be handled and tracks money coming in and going out of the account.

 

Account fee – the amount charged by a financial institution for the services they provide in managing the account.

 

Allowance - money given to a person on a regular basis for spending.

 

Amortization schedule – a table of periodic payments that shows the amount of principal and interest that makes up each payment so the loan will be paid off at the end of its term.

 

Annual fee - the fee a credit card company or lender charges for the use of a credit card or line of credit for a year.

 

Annual Percentage Rate (APR) – the percentage cost of credit on an annual basis which must be disclosed by law.

 

Annual Percentage Yield (APY) - the annual rate of return on an investment which must be disclosed by law.  The APY varies by the frequency of compounding.

 

Appreciation - the increase in value of something.

 

Asset - an item with economic value or financial worth that an individual or organization owns or has.

 

Automated Teller Machine (ATM) - a computer used by bank customers to conduct business or manage their money.

 

Available balance - the amount of money in your account that you can use or withdraw.

 

Bad check - not having enough money in an account to pay a specific check or payment.

 

Bad credit – a situation in which lenders believe that loaning future money would be risky due to a borrower’s poor history of repaying their debts.

 

Balance - the amount of money in an account.  The net of the deposits and withdrawals at a certain point in time.

 

Balancing your checkbook - comparing your monthly checking account statement with your check register to make sure that you and the bank are reporting all of the same transactions.

 

Bank – a financial institution that handles money.  The bank does most or all of the following:  receiving deposits, collecting checks, making loans and paying and receiving interest.

 

Bank account – a service provided by a bank allowing a customer’s money to be handled and tracks money coming in and going out of the account. 

 

Bankruptcy – being legally released from the obligation to repay some or all debt in exchange for the forced loss of certain assets.

 

Bank statement - a listing of your account balance at the beginning of the period and the end of the period and all of the transactions during the period. 

 

Beneficiary - a person or organization named to receive assets after an individual’s death.

 

Bounced check - not having enough money in an account to pay a specific check or payment.

 

Budget - a spending and/or savings plan for a specific period of time. 

 

Business plan – a description of a company’s organizational structure including employees, services, marketing and estimated income and expenses. 

 

Canceled check - a check that the bank has paid and charged against the check writer’s account.

 

Capital gain - income that results when the selling price of an asset is greater than the original purchase price.

 

Capital loss - a loss that occurs when the selling price of an asset is less than the original amount invested or purchased.

 

Career - a profession or field of employment for which one studies or trains.

 

Cash - coins and paper bills that can be exchanged for goods and services. 

 

Cash flow statement – a summary of how receipts and payments are received and paid for a given period of time. 

 

Charitable gift – gifts or aid to those in need.

 

Check - a written order instructing a bank to pay a specific amount of money to a specific person or entity. It must contain a date, payee, amount, and an authorized signature.

 

Checkbook - a book of blank checks which enable you to draw money from your checking account.

 

Check register – a manual record you keep when you open a checking account to track your checks, deposits and other transactions to calculate the current balance. 

 

Checking account - a bank account where money is kept that allows you to deposit and withdraw money and write checks.

 

Collateral - property that a borrower promises to give to a lender in case of default.

 

Collection agency – an organization that specializes in receiving payments from people who have defaulted on their loans.

 

Compensation - payment and benefits for work performed.

 

Compounding - calculating interest on both principal and previously earned interest.

 

Contract - a legally binding agreement between two or more parties.

 

Co-signer – an additional person who signs your credit or loan application. The co-signer on a loan is equally responsible for repaying the debt.

 

Cost of a loan - the total amount the borrower pays for a loan, which includes the amount borrowed (or principal), the total interest paid over the term of the loan, and all loan fees.

 

Credit – an agreement to purchase goods or services with the promise of future payment. Credit is also used to describe any item that increases the balance in a bank account such as a deposit or interest income. 

 

Credit card – a plastic card that may be used repeatedly to borrow money or purchase products and services in exchange for a promise to pay a future payment with interest on credit.

 

Credit counseling service – someone providing debt and money management advice and assistance to others.

 

Credit history – a written record of a person’s use of credit.  This includes applying for credit and using credit or loans to make purchases.

 

Credit limit - the maximum amount a lender is willing to make available to the borrower.

 

Credit rating – a score or grade based on how you pay your bills.

 

Credit record – a written record of a person’s use of credit.  This includes applying for credit and using credit or loans to make purchases. 

 

Credit report - an official record of a borrower’s credit history.

 

Credit score - a measure of a loan applicant’s creditworthiness or the likelihood of repayment.

 

Credit union - a non-profit financial institution that provides financial services that is owned and operated by its members.

 

Creditor - an individual or business that lends money or extends credit.

 

Credit worthy - the presumption that a borrower has sufficient assets and income to repay a loan.

 

Currency - any form of money that is in public circulation. 

 

Debit card – a plastic card linked to a checking account that can be used to withdraw money and make deposits at an ATM and to make purchases at merchants. 

 

Debt - money, goods, or services you owe to others.

 

Deductible – the dollar amount or percentage of a loss that is not insured. 

 

Default - the failure to meet the obligations of a financial or other agreement.

 

Deposit - to put money into your bank account.

 

Deposit ticket (slip) - a printed form supplied by a financial institution that you include with your deposit listing the amounts and types of funds you are depositing.

 

Discretionary expense - the purchase of goods or services which are not necessary or essential to the buyer. 

 

Disposable income - gross pay minus any tax deductions.

 

Diversification – having many different kinds of investments to reduce risk.

 

Dividends - earnings from corporate stock or a share account at a credit union.

 

Earned income - earnings from employment.  Also includes commissions and tips.

 

Earnings - the amount of money received during a period of time. 

 

Economy - activities related to the management of money and resources to produce, buy and sell goods and services in a particular geographic region. 

 

Electronic Funds Transfer (EFT) – moving money from one account to another without the physical movement of cash.

 

Emergency fund - money set aside for unexpected expenses.

 

Employee benefit – earnings that an employee receives in addition to their normal wage or salary.

 

Endorse – to authorize a check to be exchanged for cash or credit.

 

Entrepreneur – an individual who starts and assumes the risk of a business.

 

Equity - ownership in a corporation.

 

Establishing credit – obtaining the trust and confidence of lenders based on a good history of paying debts.

 

Expense – a cost of goods and services.

 

Federal Deposit Insurance Corporation (FDIC) – a federal agency that insures all bank deposits up to $250,000 per person.

 

Federal Reserve – America’s central bank used only by other banks and the federal government.

 

Fees - charges for services.

 

Federal Insurance Contributions Act (FICA) -  a deduction for a federal government program that provides retirement, survivor, and disability benefits which is funded by a tax on income.

 

Finance charge - the amount of money a borrower pays to a lender for borrowing money. 

 

Financial literacy – having the appropriate knowledge and skills to manage one’s finances effectively.

 

Fixed cost – an expense that stays the same from period to period.

 

Flexible expense – an expense that you can control or adjust. 

 

Foreclosure – when a homeowner will lose their property because of failure to make mortgage payments.

 

Fraud – when a person intentionally or illegally deceives, misrepresents or conceals information for monetary gain.

 

Garnishment – a court order that requires an employee’s wages to be deducted to pay a financial obligation.

 

Good credit – due to the good history of repaying debts, lenders are willing to make loans to individuals.

 

Grace period – a period of time that a borrower does not incur finance charges or penalties and can pay the full balance of credit due before charges begin to accumulate.

 

Gross pay - wages or salary before any deductions of taxes or other items.

 

Identity theft - using someone else’s name, or other piece of personal information to commit a fraudulent act.

 

Income – the amount of money received during a period of time.

 

Inflation – general increase in the price of goods and services.

 

Insurance – a way to protect an individual from specific financial losses under a written policy.

 

Interest expense – the cost of borrowing money from a lender in exchange for the use of the lender’s money.

 

Interest income - the earnings from investing your money.

 

Interest rate – the amount charged by a lender to borrow money typically on an annual basis and expressed as a percentage of the principal.

 

Investing – purchasing anything in hopes that it will increase in value over time with a risk of loss.

 

Job – a position of employment with specific duties and compensation.

 

Joint account – an account owned by two or more people who are equally responsible for the account.

 

Late fee – a fee or charge that can be added when a payment on a loan or credit card is made after the due date. 

 

Layoff – when a company cuts costs by having employees lose their jobs.

 

Lease – a written contract specifying the responsibilities of both parties in the use and legal responsibilities of an asset.

 

Lender – someone who makes money available for others to borrow.

 

Liability – a financial obligation to others.

 

Liquidity – the ability that permits an asset to be converted quickly into cash without loss of value.

 

Loan – money that is borrowed and is expected to be repaid over time, normally with interest.

 

Luxury - something you don't actually need and could live without. 

 

Medicare – a federal government program that pays for certain health care expenses for people reaching retirement age financed by wage deductions. 

 

Minimum balance – a specific amount of money a financial institution will require in order to open or maintain a particular account.

 

Minimum payment – the least amount of money that can be repaid on a loan or credit card to keep the account in good standing.

 

Money – legal tender or cash.

 

Mortgage – a long term loan from a financial institution to buy real estate.

 

Needs - basic things necessary to live. 

 

Net worth – the measure of a person’s financial condition at a given point in time.

 

Non-Sufficient Funds (NSF) – not having enough money in an account to pay a specific check or payment. 

 

Online banking – a service provided by a financial institution that allows you to perform banking activities by using the internet.

 

Outstanding balance – the total amount currently owed on a loan or other debt.

 

Overdraft – not having enough money in an account to pay a specific transaction or check that the bank will pay if you have overdraft protection and will normally charge a fee.

 

Overdraft protection - many financial institutions offer a service that will automatically transfer money from a linked account to pay transactions you don’t have enough money in your account to pay.

 

Payee – the person, company, or organization that a check is written out to.

 

Payment method – the agreed way a financial obligation is to be repaid, such as by cash or check.

 

Payer - the person who is paying money or from whose account the money is to be taken to pay a check.

 

Payroll deduction – an amount an employer withholds from a paycheck whether mandatory or voluntary.

 

Personal Identification Number (PIN) – a combination of letters and/or numbers used to gain access to an account through an electronic device.

 

Philanthropy - voluntarily contributing to good causes for the welfare of others. 

 

Principal – the total amount of money borrowed or loaned not including interest or service charges, or the amount of money originally invested.

 

Profit – a financial gain calculated by subtracting the amount spent from the amount earned. 

 

Reconcile – determining if the balance in your account register matches the balance on your account statement from the bank. 

 

Register – tracking your deposits and withdrawals manually while keeping your current account balance.

 

Rent – a fee paid for a specific time to use property or assets of another.

 

Repossession   - when a lender takes collateral a borrower gives up when defaulting on a loan.

 

Retirement – when you stop working or having a job and live off of your investments.

 

Risk – the measured likelihood of a loss or less than an expected return on an investment or a loan.

 

Routing number – a nine digit number that identifies the financial institution that issued the check.  This number is found on the bottom of your checks next to your account number. 

 

Salary – compensation received for working usually expressed as a yearly amount and paid in prorated portions on a regular basis.

 

Sales tax – tax charged by a state or city on the sale price of certain items which is collected by the seller and normally remitted to the state.

 

Saving – setting income aside for future spending, emergencies or investing. 

 

Savings account – an account you can deposit and withdraw money and the bank pays interest on the balance for the use of the money.

 

Savings account register – a way to track your deposits and withdrawals manually and record your current balance.

 

Scam – a fraud or a deceptive act.

 

Service fees - charges for services.

 

Simple interest – interest that is calculated periodically on loan principal or a principal portion of an investment and not on previously earned interest.

 

Social Security – a federal government program providing retirement, survivor and disability benefits which is funded by a tax on income. 

 

Spending limit - the maximum amount a lender is willing to make available to the borrower.

 

Statement - a listing of your account balance at the beginning of the period and the end of the period and all of the transactions during the period. 

 

Take home pay – gross wages or salary including bonuses less other payroll deductions like taxes.

 

Tax – the main way people and business pay for their government by paying a fee based on an individual or business income. 

 

Term – a period of time.

 

Tip – a payment for services beyond what is required.

 

Unearned income – earning from sources such as investments and royalties not from employment.

 

Unpaid balance – the total amount that is owed on a loan or credit card debt.

 

Value – something that is desired, has worth or is useful.

 

Wage – compensation for work.

 

Wants – things you do not need to live.

 

Withdraw - to take money out of an account.

 

Withdrawal slip – a form supplied from a financial institution to record the amount of money to be taken out of an account.

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