Personal Finance Glossary: Terminology Every American Must Know
There are plenty of words thrown around when talking about finance, but only a few are important enough to add to your personal finance glossary. Most of us don’t need to know about hedge funds or aggregate supply curves; we need to know the financial terms that most affect our income, mortgages, debts, and monthly spending.
Every American should look through this personal finance glossary for the basic, must-know terms for your daily finances. The more you know, the more financial opportunities you can find.
Personal Finance Glossary Of Terms To Understand
Annual Percentage Rate (APR)
Interest is charged to a borrower. We see this term the most when getting a loan or credit card that charges interest on debts not paid in full.
Annual Percentage Yield (APY)
Interest earned on an investment. We usually see this with a checking or savings account – although a small percentage – when the bank pays us monthly for keeping our money with them.
Appreciation
When the value of something increases. You can see appreciation in real estate, stocks, fine art by famous artists, cryptocurrency, and other things. The opposite of this is depreciation.
Asset
Something you own that has economic value. Your cash, inventory, and paid-off car are assets.
Automation
When you set up processes to be automatic and not require human effort. You can and should automate your savings, pay bills online, donations, and other monthly electronic transactions.
Bankruptcy
Bankruptcy is a legal proceeding that happens when you can’t pay back your debts. There are six different “chapters” of bankruptcy you can file for, with Chapters 7 and 13 being the most common.
Bond
The government and companies use bonds to borrow money from average citizens. You give X amount over X years at a fixed or variable interest rate, then get your money back plus interest at the end of the term.
Budget
This estimates your income and expenses over a set time.
Capital
Any wealth, money, or assets you have. Capital gains, on the other hand, are money you make from investments.
Collateral
Something you pledge to secure a loan. If you don’t pay the loan, your collateral is collected by the lender.
Certificate of Deposit (CD)
CDs are similar to bonds, but they are issued mainly by banks and credit unions.
Compound Interest
Combined interest on both the initial principal (amount) and interest accumulated from previous days/weeks/months. Use this to your advantage for retirement accounts and investments.
Debt Consolidation
Rolling multiple debts into one payment.
Equity
For most people, equity is your property’s value minus what you owe on the mortgage.
Exemption
Tax exemptions allow you to exclude some income from what is taxed depending on your situation.
Gross Income
Your income before taxes and deductions.
Income Tax
The tax you must pay to the government on all personal income.
Individual Retirement Account (IRA)
IRAs are retirement accounts that are either tax-free or tax-deferred. The most popular are 401(k)s from employers and personal Roth IRAs.
Interest
A charge for borrowing money. You pay interest when you borrow, and you receive it when you lend.
Liability
When you’re responsible for something, often a payment.
Nest Egg
An amount of money saved for the future.
Net Income
Income minus expenses, taxes, and other costs.
Secured Debt
Debts against which you put up collateral.
Social Security
A payment made to those over 65 who have met work requirements before retiring.
Tax Credit
Lowers your owed tax amount to give you a large refund.
Tax Deduction
Lowers your taxable income amount and tax rate.
W-2 Statement
A federal document stating your wages and taxes paid for a job.
W-4 Statement
A document you fill out to determine how much income tax is withheld from your pay.
Payday Loan
A loan given for a small amount that is usually, but not always, paid back when the borrower gets their next paycheck. This is also called a payday advance.
When Should I Get A Payday Loan?
If you’re short on cash and need to pay for an emergency expense, you may benefit from a Mississippi Title Loans, Inc. payday advance loan, as defined in our personal finance glossary. These loans are given in amounts from $100 to $400 and only require a short application process.
Examples of emergency expenses that could be covered with a payday loan include:
- Home repairs
- Car repairs
- Medical bills or procedures
- Emergency travel
- Overdue utility bills that will otherwise suspend your service
How To Get A Payday Loan
A personal finance glossary talks a lot about expenses and debt, and most Americans know how difficult it is to get money to pay debts if you have a low credit score. At Mississippi Title Loans, Inc., all credit scores are welcome to apply. We also don’t require collateral.
To apply, fill out the online payday loan interest form and wait for a call from our representative. They will walk you through the process, tell you what you need, and answer any questions.
If approved, you could have your payday loan by the end of that same day!
Keep Improving Your Finances Today
Now that you’ve improved your personal finance glossary, it’s time to improve your actual finances. Do you have pending urgent bills that need to be addressed? If so, you might want to consider a payday advance from Mississippi Title Loans, Inc. – give us a call today to learn more!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.