Personal Finance Terms
Search through our broad glossary of Personal Finance Definitions to take control of your finances.
-
E
Emergency Fund ➤
Savings for unexpected financial expenses.
Equity ➤
Ownership interest in an asset.
-
F
Financial Independence ➤
The status of having enough income to pay for living expenses for the rest of one’s life without having to be employed or dependent on others.
Financial Advisor ➤
A professional for financial planning.
-
G
Gross Income ➤
An individual's total earnings before deductions.
-
H
High-Yield Savings Account ➤
A type of savings account that earns higher interest than a standard savings account.
Hedge Funds ➤
Pooled funds that employ different strategies to earn active return for their investors.
Health Savings Account (HSA) ➤
Account for medical expenses.
-
I
Index Funds ➤
A type of mutual fund or ETF designed to match the performance of a market index.
Interest ➤
Cost of borrowing money.
-
J
Joint Account ➤
A bank or brokerage account that is shared between two or more individuals.
-
K
Key Rate ➤
An interest rate set by official authorities which forms the basis for other interest rates.
-
L
Liabilities ➤
What is owed to others.
Liquidity ➤
The availability of liquid assets to a market or company.
-
M
Mutual Funds ➤
An investment program funded by shareholders that trades in diversified holdings.
Mortgage ➤
Loan for real estate.
-
N
Net Worth ➤
The amount by which assets exceed liabilities.
Net Income ➤
ncome after taxes and deductions.
-
O
Overdraft ➤
Exceeding available bank account balance.
-
P
Passive Income ➤
Earnings derived from a rental property, limited partnership, or other enterprise in which a person is not actively involved.
Principal ➤
Original amount borrowed or invested.
Portfolio ➤
A range of investments held by a person or organization.
-
Q
Qualified Dividends ➤
Dividends that are subject to lower tax rates.
-
R
Roth IRA ➤
An individual retirement account allowing a person to set aside after-tax income.
Refinance ➤
Replacing an existing loan with a new one.
-
S
Stock Market ➤
Marketplace for buying and selling stocks.
Stocks ➤
Shares of a company’s ownership.
-
T
Tax Deduction ➤
Expense reducing taxable income.
-
U
Underwriting ➤
The process of evaluating the risk of insuring a home or financing a loan and establishing a price.
-
V
Variable Expenses ➤
Costs that can change over time and are not fixed.
Variable Interest Rate ➤
Costs that can change over time and are not fixed.
Venture Capital ➤
Capital invested in a project in which there is a substantial element of risk.
-
W
Whole Life Insurance ➤
A type of permanent life insurance that provides coverage for the life of the insured.
Withholding Tax ➤
Tax withheld from income.
-
X
X-Efficiency ➤
The degree of efficiency maintained by individuals and firms under conditions of imperfect competition.
-
Y
Yield ➤
The income return on an investment.
Equity ➤
Ownership interest in an asset.
-
Z
Zero-Based Budgeting (ZBB) ➤
A method of budgeting in which all expenses must be justified for each new period.