📖 Glossary

500 money, math, and health terms explained in plain English — each with an example and a free calculator.

41 terms found in Personal Finance. Clear filters

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50/30/20 Rule The 50/30/20 rule is a simple budgeting guideline that divides after-tax income into three parts: 50% for…

B

Bill Splitting Bill splitting is dividing a shared cost, such as a restaurant check, rent, or utilities, among several… Budget A budget is a plan for how income will be allocated to spending, saving, and debt repayment over a set…

C

Cash Flow Cash flow is the movement of money into and out of a household or business over a period. Positive cash flow… Checking Account A checking account is a bank or credit union account used for everyday transactions, such as receiving pay… Consumer Price Index (CPI) The Consumer Price Index (CPI) measures the average change over time in the prices consumers pay for a… Cost of Living Cost of living is the amount of money needed to cover basic expenses — housing, food, transportation… Credit Union A credit union is a not-for-profit financial cooperative owned by its members, who share a common bond such…

D

Deflation Deflation is a sustained decrease in the general price level of goods and services, meaning money buys more… Direct Deposit Direct deposit is an electronic payment that sends money straight into a bank or credit union account… Discretionary Spending Discretionary spending is money spent on non-essential goods and services — wants rather than needs —… Disposable Income Disposable income is the income a household has left after paying income taxes and mandatory payroll…

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Envelope Budgeting Envelope budgeting is a method in which money for each spending category is set aside separately…

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Financial Literacy Financial literacy is the knowledge and skills needed to make informed decisions about money, including… Fixed Expenses Fixed expenses are costs that stay the same, or nearly the same, from month to month, such as rent or… Fuel Economy (MPG) Fuel economy measures how far a vehicle travels on a given amount of fuel. In the United States it is…

G

Gratuity A gratuity, or tip, is an extra payment given to a service worker in addition to the listed price, commonly… Gross Income Gross income is total income before any taxes or deductions are taken out. For an employee, it is the full…

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Hyperinflation Hyperinflation is extremely rapid and out-of-control inflation, in which prices rise so quickly that money…

I

Impulse Buying Impulse buying is making an unplanned purchase driven by emotion or a sudden urge rather than by a prior… Insurance Deductible An insurance deductible is the amount a policyholder must pay out of pocket on a covered claim before the… Insurance Premium An insurance premium is the amount a policyholder pays, usually monthly or annually, to keep an insurance…

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Liability A liability is an amount of money a person or business owes to others. Personal liabilities include… Lifestyle Inflation Lifestyle inflation, also called lifestyle creep, is the tendency for spending to rise as income rises, so… Living Paycheck to Paycheck Living paycheck to paycheck describes a situation in which a person’s income is almost entirely used for…

M

Minimum Wage Minimum wage is the lowest hourly pay that employers are legally required to pay covered workers. Many… Money Market Fund A money market fund is a mutual fund that invests in short-term, high-quality debt, such as Treasury bills…

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Net Income Net income is the amount left after all taxes and deductions are subtracted from gross income. For an… Net Worth Net worth is the total value of everything a person or organization owns (assets) minus everything it owes…

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Overdraft Fee An overdraft fee is a charge a bank or credit union may apply when a transaction is paid even though the…

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Pay Yourself First Pay yourself first is a budgeting approach in which a set amount is moved to savings or investments as soon… Percentage Discount A percentage discount reduces a price by a stated percentage of the original price. Sale price = original…

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Recession A recession is a significant, widespread, and lasting decline in economic activity, typically visible in… Recurring Subscription A recurring subscription is a service billed automatically at regular intervals, such as monthly or yearly…

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Sinking Fund In personal finance, a sinking fund is money saved gradually for a specific, planned future expense, such as… Stagflation Stagflation is an economic situation that combines high inflation with slow or stagnant economic growth and… Sunk Cost A sunk cost is money, time, or effort that has already been spent and cannot be recovered, whatever is…

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Total Cost of Ownership Total cost of ownership (TCO) is the full cost of buying and using something over its lifetime, not just its…

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Unit Price Unit price is the cost per standard unit of measure — such as per ounce, per kilogram, or per item —…

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Variable Expenses Variable expenses are costs that change from month to month depending on usage or choices, such as groceries…

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Zero-Based Budget A zero-based budget is a budgeting method in which every unit of income is assigned a specific purpose —…
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Definitions are for general educational purposes only and are not financial, tax, legal, or medical advice.