- Asset: An owned item of financial value (e.g., property) used to meet debts or generate benefits.
- Base rate: The interest rate central banks charge other banks (e.g., Federal Reserve rate).
- Bonds: Fixed-interest securities issued by governments/companies to borrow money.
- Credit: Obtaining goods/services before payment.
- Credit card: Enables purchases on credit, billed monthly.?
- Credit limit: The maximum borrowing amount on credit.
- Creditor: Someone owed money.
- Credit rating: A score assessing borrowing reliability.
- Credit utilisation: The percentage of available credit used monthly.
- Debit card: Allows spending money directly from a bank account.
- Debt: Money owed, e.g., loans or credit balances.
- Debt consolidation: Combining multiple loans into one for lower interest rates.
- Deflation: Decrease in prices; money value rises.?
- Expenditure: Formal term for spending.
- Financial contingency planning: Preparing for unexpected financial challenges.
- Fund: A pooled investment managed for growth (e.g., mutual funds).
- Hyperinflation: Extremely high inflation causing currency devaluation (e.g., Zimbabwe, 2000s).
- Inflation: Increase in prices; money value declines.?
- Insurance: A contract guaranteeing compensation for specific losses in exchange for a premium.?
- Interest: Cost of borrowing money or earnings from savings.
- Investing: Putting money into ventures aiming for profit (e.g., stocks).
- Leveraging: Using borrowed funds for investment expecting higher returns than costs.
- Loan: Borrowed money repaid with interest.
- Mortgage: A loan secured against property.
- Nominal prices: Prices not adjusted for inflation.
- Pension: Savings plan for retirement.?
- Portfolio: A collection of investments held by an investor.
- Premium: Payment for insurance coverage.
- Quantitative easing: Increasing money supply to stimulate the economy.
- Real prices: Prices adjusted for inflation over time.
- Refinancing: Replacing an existing loan with a new one for better terms.
- Return(s): Profit from investments.
- Risk (financial): Probability of losing money on an investment.
- Risk-reward trade-off: Balancing investment risks with potential gains.?
- Savings: Money set aside and not spent routinely.
- Stagflation: High inflation paired with economic stagnation.
- Standard variable rate: A lender’s default interest rate for mortgages.
- Stock exchange: A platform for trading company shares.?
- Stocks and shares: Ownership stakes in companies traded in the stock market.
- Tax: Mandatory payments to governments (e.g., income tax).
Summing it up
Understanding financial terms is crucial for effective money management and investment decisions.