Finances English Vocabulary

Finances English Vocabulary

• Assets: Items of economic value owned by a person or company. Examples include cash, property, investments.
• Liabilities: Obligations or debts owed by a person or company. Examples include loans, mortgages, credit card balances.
• Income: Money received, especially on a regular basis, for work or through investments. Can be gross (total) or net (after deductions).
• Expenses: Costs incurred in the process of generating income or maintaining operations. Examples include rent, utilities, food.
• Budget: A plan for managing income and expenses over a set period.
• Profit: The financial gain resulting from a transaction or activity. Revenue minus expenses.
• Loss: The financial disadvantage resulting from a transaction or activity. Expenses exceeding revenue.
• Debt: Money owed to another party, often via a loan or credit.
• Credit: The ability of a person or business to obtain funds or borrow money. Also, the history of payments made by an individual toward debts.
• Savings: Money set aside for future use.
• Investing: Putting money into something with the expectation of future financial gain.

Banking Terminology

• Account: A record of transactions and balances kept on a financial ledger, belonging to an individual or entity.
• Deposit: To place money into a bank account.
• Withdrawal: To remove money from a bank account.
• Balance: The current amount of money in an account.
• Interest: A fee paid back to lenders or depositors in exchange for using their funds.
• Loan: An amount of money a lender agrees to give to a borrower, with an agreed upon interest and repayment period.
• Mortgage: A loan to buy real estate.
• Credit Card: A payment card allowing the user to borrow money up to a credit limit.
• Debit Card: A payment card deducting money directly from a checking account.
• Bank Statement: A summary of all transactions recorded in an account over a certain period.
• ATM (Automated Teller Machine): A machine allowing access to financial services without the need for a teller.
• ACH (Automated Clearing House): A system for electronic funds transfers between banks.
• FDIC (Federal Deposit Insurance Corporation): A U.S. government agency that insures deposits in banks.

Investment Terms

• Stock: Ownership shares in a company.
• Bond: A loan made to a government or corporation.
• Mutual Fund: An investment that pools money from many investors to invest in a diversified portfolio of stocks, bonds, or other assets.
• Index Fund: A type of mutual fund that tracks a specific market index, such as the S&P 500.
• Diversification: Spreading investments across various assets to reduce risk.
• Return on Investment (ROI): The gain or loss on an investment relative to the amount invested.
• Risk Tolerance: An individual's willingness to accept potential losses while investing.
• Market Capitalization: The total value of a company's outstanding shares.
• Liquidity: How readily an asset can be converted into cash.
• Yield: Measures the return on investment, commonly expressed annually.

Budgeting Vocabulary

• Fixed Expenses: Costs that remain constant each month, like rent or mortgage payments.
• Variable Expenses: Costs that fluctuate from month to month, such as groceries or entertainment.
• Net Worth: The difference between total assets and total liabilities.
• Savings Goals: Specific financial objectives, such as saving for a down payment or retirement.
• Budget Allocation: The process of assigning funds to different expense categories within a budget.
• Budget Surplus: When income exceeds expenses.
• Budget Deficit: When expenses exceed income.
• Budgeting Methods: Different approaches to managing income and expenses.
• Financial Planning: The process of setting financial goals and developing strategies to achieve them.
• Emergency Fund: Savings set aside to cover unexpected expenses.
• Debt Repayment Plan: Steps to reducing existing debt.
• Inflation: The rate of increase in prices over a period of time.