Basics:
Asset; An item or possession that you own and is valuable such, as cash, investments or property.
Budget: A plan that helps you manage your income and expenses effectively.
Debt; Money that you owe to someone like a loan or credit card balance.
Income; The money you earn regularly whether from a job or investments.
Interest; The cost of borrowing money or the benefit of lending money to others.
Liability: Something that you owe which ultimately decreases your worth. This can include debts and other financial obligations.
Net worth; The value of your assets, after subtracting your liabilities.
Investing;
APR (Annual Percentage Rate); It is the interest rate charged annually on a loan or credit card.
APY (Annual Percentage Yield); This represents the interest earned on an account over a year considering compounding well.
Compound interest; It refers to the interest earned not on the principal amount but also, on the accumulated interest from previous periods.
Diversification; This involves spreading your investments across asset classes to lower the risk involved.
Emergency fund; This is money that you set aside to cover expenses that may arise.
Financial goal; It refers to something you aim to achieve with your money, such as purchasing a house or planning for retirement.
Investment; Putting your money into something with the expectation of making a profit from it.
Retirement plan: A savings account specifically designed to accumulate funds, for retirement purposes.
Risk tolerance: It reflects your ability to handle losses that may occur in investment ventures.
Credit and Debt;
Credit score: a representation of your creditworthiness, which lenders use to assess your eligibility, for loans and determine the interest rates you qualify for.
Credit report; a record of your borrowing history, which is taken into account when calculating your credit score.
Debt to income ratio: this measures the proportion of debt you have in relation to your income.
Default; failure to make a required payment on a loan or debt.
Grace period: this follows the payment due date you have a window where you can make a payment without incurring any penalties.
Minimum payment; the amount that must be paid on a basis, for a credit card.
Other;
Escrow; When a third party holds money until specific conditions are fulfilled.
Inflation; The rise, in the cost of goods and services, over time.
Taxes; The money individuals pay to the government determined by their income or other factors.
Insurance; An agreement that safeguards against loss in circumstances.
Please note; This list is not comprehensive and the precise definitions of these terms may differ depending on the context.
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