Financial Glossary

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401(K) - A retirement savings and investment account offered by employers to their employees. Contributions are primarily from the employee, providing a tax savings on the money contributed. Some employers contribute a percentage as a form of an employee benefit.


Amortization Calculator - A way to calculate the gradual repayment of a loan or mortgage, where payments stay the same over time but the proportion of the payment for principal and interest changes with each payment based on factors like the loan amount, loan rate, and loan interest.

Artificial Intelligence (AI) - A computer-based system that attempts to behave like a human mind with added advantages, like the ability to collate and cross-reference vast amounts of data. Lenders sometimes use artificial intelligence to screen and assess loan applicants.


Budget - A list of expenses and income for a specific amount of time, often weekly, monthly, or yearly, used to plan for paying for regular expenses and, ideally, saving money.


Car Insurance - A service that a person can purchase from a company that provides financial coverage or reimbursement in the case of an accident that causes damage or harm or if theft occurs.

Child Support - Money paid to a guardian or former spouse to help cover a child's well-being and living expenses.

Child Tax Credit - A government benefit that provides parents a tax discount for each child claimed on their tax return as a dependent.

College - An institution of undergraduate higher education.

Credit Card - A form of payment used for purchases instead of cash. The purchaser pays off some or all of the amount of the accumulated purchases monthly, paying interest on any unpaid amount.

Credit Score - A number between 300 and 850 that lenders look at to determine a borrower's ability to pay their bills and make payments on their debt on time. It helps lenders determine whether a borrower is a risk to lend to. The number is determined by several factors, including how much debt a borrower already has outstanding and how responsible they are at repaying it. A high credit score typically means a borrower has a good credit history.

Credit Union - A nonprofit financial organization, similar to a bank, owned by its members.

Cryptocurrency - A form of money exchanged virtually or digitally on a peer-to-peer network.


Department of Motor Vehicles (DMV) - A state government organization that oversees things like driver's licenses and the legal buying and selling of motor vehicles.


Entrepreneur - A person who creates and manages their own business and assumes the risks of that business.

Equity - The amount of money in a home, automobile, or other property or goods that a buyer owns relative to the total value of it. For instance, if a car is valued at $20,000 and $15,000 remains in the loan, the buyer has $5,000 worth of equity in the car.


Flexible Spending Account (FSA) - A pre-tax account that allows for spending in a certain category, such as healthcare or dependent care.

Free Application for Federal Student Aid (FAFSA) - A form required for higher education students seeking financial aid.


Health Insurance - A service that a person can purchase from a company that provides at least partial financial coverage or reimbursement for health services, illness, accident, or disease.

High-Yield Savings Account - A bank account that pays higher interest than other accounts.

Homeowners Insurance - A service purchased from a company for financial coverage or reimbursement for repairs or replacement of damage to a property or belongings due to an accident or other unexpected event. Mortgage lenders require buyers to have this type of insurance before providing the loan.

HVAC - An abbreviation for heating, ventilation, and air cooling.


Individual Retirement Account (IRA) - A pre-tax investment account that individuals can open to save for retirement.

Inflation - When the costs of goods and services, like groceries or tuition, go up in price so that the same amount of money cannot cover the same purchases as it previously did and therefore have less value.

Insurance - A service that a person can purchase from a company that provides at least partial financial coverage or reimbursement for health services, accidents, or other unexpected events. May also refer to the legal document outlining the arrangement provided.

Internal Revenue Service (IRS) - The office of the U.S. government responsible for adding up and charging income taxes for individuals and businesses.


Limited Liability Company (LLC) - A type of business that allows the owner to separate personal assets from business assets to protect them from creditors and legal action if the business fails.

Loan - A type of debt in which a borrower is given a sum of money by a lender, usually a bank, that the borrower will pay back on an agreed-upon schedule with interest.


Medicare - Federal health care program for people over 65 or those under 65 who are living with disability.

Money Order - A certificate issued by a bank or government that allows the person listed as payee to exchange it for cash.

Mortgage - A loan used to purchase property, such as a home or other type of real estate.

Mortgage Calculator - A tool that can be used to determine the amount of the down payment, length of repayment, and total amount for a loan to purchase property, such as a home or other type of real estate.


Notary - A person authorized to witness, legally certify, or sign certain documents, such as wills, real estate deeds, legal documents, powers of attorney, and bills of sale to verify their authenticity.


Principal - The original amount of money of a loan or investment before interest.

Purchase and Sale Agreement (PSA) - A legal document formalizing an agreement to buy and sell an asset, like a real estate property, along with terms and conditions.


Real Estate - Land and buildings, owned by an individual or company, that may be bought or sold.

Realtor - A licensed professional who facilitates buying or selling a home for the buyer or the seller.

Renters Insurance - A type of insurance purchased by tenants living in a rental property to cover damages to their possessions for incidents like a fire or burglary.

Resident Alien - A person living in the United States who is not a U.S. citizen but holds a green card or has passed the "substantial presence" test. To prove substantial presence, the person must be present in the U.S. for a specified number of days.

Roth IRA - A specific type of individual retirement account for which a person pays taxes on the money when making the contribution but then can withdraw funds from the account after retirement without paying taxes.


Scholastic Aptitude Test (SAT) - A standardized exam often taken by high school students to submit as part of a college application; also sometimes used for scholarship or award criteria.

Social Security - A federal retirement program that provides income for people once they reach the age of 62. Funded by income taxes on workers who are younger than 62.

Social Security Administration (SSA) - The agency of the U.S. federal government responsible for administering money to retired people, their survivors, and disabled individuals and assigning Social Security numbers.

STEM - Science, technology, engineering, and math. Used as shorthand to describe studies or careers in these fields.

Stock - An investment representing a small ownership share in a company that may go up and down in value depending on the company's performance and profit.

Student Loan - A loan made by the government or a private lender to a borrower for higher education.

Supplemental Nutrition Assistance Program (SNAP) - The government's Supplemental Nutrition Assistance Program provides individuals or families with a preloaded Electronic Benefits Transfer card (EBC) that may be used to purchase food like a debit card. The dollar amount on the card is replenished monthly based on household income and the number of family members.

Supplemental Nutrition Assistance Program for Women Infants and Children (WIC) - The government's Supplemental Nutrition Assistance Program for Women, Infants, and Children provides pregnant women and parents of children aged five and under with access to information, resources, food items, and other relevant expenses. A dollar amount is not specified; the program provides redemption credits for groceries or other supplies at authorized schools, clinics, and stores.


Taxes - The money paid to local, state, or federal governments based on income, property ownership, or sales. The government often uses this money to maintain government facilities and fund public programs and infrastructure.


Unemployment Benefits - Money given to people who have lost their jobs, dependent on meeting eligibility requirements.


W-9 - An IRS form used to document a person's name, address, and tax identification number (TIN) or Social Security number (SSN).