Personal finance terminology refers to the vocabulary used to describe financial concepts, practices, and tools that individuals use to manage their money.
Welcome to the personal finance terminology 101 section of the Cash Academy Blog. Here we'll go over key personal finance terminology, what it means, and how it applies to you.
Personal finance terms can be confusing and overwhelming with unique terminology, abbreviations, acronyms, and even trending terms within the industry.
But personal finance is supposed to be personal!
That's why we created the personal finance terminology 101 section of the Cash Academy Blog, so we can go over key finance terms in simple and easy-to-understand ways.
Whether you're a beginner at personal finance or a seasoned pro, we'll help you better comprehend personal finance terminology so you can make informed financial decisions as an individual, as a household, and even as a small business.
Let's get started and expand your personal finance vocabulary today!
The 50/30/20 budget is a budgeting method that recommends spending 50% of your monthly income on needs, 30% on wants, and 20% on savings and debts.
529 College Savings Plan
A 529 college savings plan is a type of savings account with a specific savings plan designed for a child's educational expenses.
Adjusted Gross Income (AGI)
Adjusted gross income (AGI) is an income calculation that equals the total gross income minus any tax deductions and qualifying expenses like tuition, student loans, or alimony.
An asset is a type of financial resource that has monetary or investment value.
Bankruptcy is a legal process that allows individuals or businesses to formally declare that they are unable to pay their debts.
Bill Payment Service
A bill pay service is a financial service that provides customers with a system they can use to pay their bills.
At Check City, you can visit a Check City store and pay your monthly bills all at one place and all at one time.
A budget is a financial plan and strategy for managing income and expenses.
Car worth is the estimated monetary value of a vehicle based on factors like condition, age, make and model, mileage, and market demand.
Cash Envelope Budget
A cash envelope budget is a budgeting method that uses cash and envelopes to organize and manage your income and expenses.
A cashier’s check is a type of check that is paid for by you but is written and secured by the bank.
A certified check is a type of personal check that is written by you, secured and guaranteed by the bank, and paid for with your personal bank account.
A check endorsement is a signature on the back of a check that transfers ownership of the check to the bank in order to make a deposit.
Checkbook balancing is the process of recording your checkbook deposits and expenses and reviewing that record alongside your checking account statement.
Debt is a monetary obligation that a borrower owes to a lender.
Depreciation is when the value of an asset decreases over time due to use, wear, and tear.
Flexible Spending Account (FSA)
A Flexible Spending Account (FSA) is a type of savings account that allows employees to save pre-tax dollars to help pay for eligible medical, dental, and vision expenses.
Frugal is an adjective used to describe someone who is extra careful about spending less and saving more when managing their finances.
Gross income is the total income earned by an individual or organization before taxes and deductions are applied.
Health Savings Account (HSA)
A Health Savings Account (HSA) is a type of savings account that helps people with a high-deductible health plan (HDHP) save tax-free money to pay for eligible medical expenses.
Individual Retirement Account (IRA)
An Individual Retirement Account (IRA) is a type of investment account used to save for retirement. There are two types of IRAs, Traditional IRAs and Roth IRAs.
An investment is a financial asset or resource that can grow and generate income, profit, or more financial value of some kind over time.
A job interview is a meeting between a potential employee and employer to see if the job applicant will be a good fit for the position.
A lawyer is a type of professional who is trained and licensed in law and the judiciary system to provide legal advice.
A money order is a secure payment option for a pre-specified amount of money, similar to a check.
A money transfer is a secure payment option that allows people to send money to others electronically.
Net income is the income that remains after all deductions, expenses, and taxes have been subtracted from the total, gross income.
Online Bank Account
An online bank account with Netspend is a convenient online place to keep and use your money.
A paycheck budget is a budgeting method that organizes and plans your finances for each individual paycheck.
Paycheck to Paycheck
Living paycheck to paycheck is when all or most of the income in a budget is spent each month without any surplus for things like savings, emergency expenses, or luxury spending.
A personal check is a written financial statement that allows a bank to pay the check recipient through the check sender's checking account.
A prepaid card is a payment card with funds you load in advance and can reuse again and again.
A resume is a written outline of someone's education, certifications, skills, and professional experience.
Return on Investment (ROI)
A Return on Investment (ROI) is a formula that measures how much was financially gained or lost in an investment.
A Roth IRA is a type of individual investment account that lets you invest already taxed money so you don't have to pay taxes on that money when you withdraw.
Store Credit Card
A store credit card is a type of credit card some companies offer customers that offer special benefits, rewards, and discounts.
A surgeon is a type of professional who is trained and licensed in medicine to perform surgical operations on patients.
A therapist is a type of professional who is trained and licensed in psychology, counseling, or social work to provide counseling to patients.
A Traditional IRA is a type of individual investment account that lets you invest pre-tax money and pay taxes on that money when you withdraw.
A traveler's check is a type of check with a prepaid amount so the user can exchange the check for local currency while traveling.
Unbanked is an adjective used to describe someone who uses alternative banking services rather than traditional banking services.
A void check is a check that has been canceled or invalidated by the sender writing the word VOID on the check.
Wealth management is a system or program that organizes someone's finances including income, profits, investments, accounting, taxes, estates, etc.
Western Union is a financial service that offers money orders and money transfers to customers who visit their agent locations.