The Money Express Glossary  

A, B, C, D, E, F, G, H, I, J, K, L, M, N, O, P, Q, R, S, T, U, V, W, X, Y, Z

401(k) Fund – A retirement plan offered by a company for its employees that lets them set aside tax-deferred money. Sometimes the company will match the funds anywhere from 10-100% as a way to encourage employee participation

403(b) Fund – Type of IRA that lets employees of certain nonprofit organizations set aside tax-deferred money; a retirement plan for non-profit and certain tax-exempt organizations in which employees can place part of their income into a fund that defers income taxes until retirement age, similar to a 401(k) plan

529 Plan – A state program for saving for college. Parents contribute to an account for their child’s education. The state invests these accounts in stocks and such

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AA

Account - A business agreement that includes the exchange of money or other asset; a record of financial transactions for an asset (money) that you have with a financial institution

Accumulation Phase - The first period of an annuity when you are paying into the fund

Actual Cash Value – Insurance term that refers to the cost of an item if you were to sell it today

Actuary – Insurance company workers who analyze risks and determine the price of premiums

Adjustable Rate Mortgage – A kind of mortgage in which the interest rates can rise or fall, usually according to some kind of index

Advertisements – Messages broadcast over television and radio, billboards, newspapers and magazines influencing the purchase decisions of consumers to buy the products or services advertised

Aggressive Growth Funds – Mutual funds with money invested in companies that may be small now but are expected to grow

Agricultural Loan – Loans for land acquisition, farm equipment, crops, etc.

Alloy – A mixture of two or more metals

Annual Fee – A yearly charge by a credit card issuer giving you credit, typically ranges from $15 to $55 or more

Annual Percentage Rate (APR) – Also called "effective interest rate", APR is the one-year rate that is charged for borrowing (or earned on investing) stated as a percent; a measure of the cost of credit expressed as a yearly rate.  The APR is the interest rate, but also includes transaction and service fees called finance charges.  When comparing loans or investments, it's important to consider not just rates but APRs

Annual Percentage Yield (APY) – The effective annual rate of return; the rate actually paid or earned in one year taking into account the effect of compounding interest   

Annuity – A contract with an insurance company where you agree to pay money to the company either in a lump sum or series of payments.  Then the company will pay you regular payments over an agreed upon length of time, usually during retirement 

Appreciate - To increase or grow in value; usually associated with stocks or other investments which are worth more now than what you paid for them

Apprentice - A person who works for an expert to learn a trade

Asset - Anything owned by an individual or business that can be sold for money.  Examples are house, land, car, securities, gems, cash, etc.

ATM (Automated Teller Machine) - A cash machine located outside of banks' and credit unions' branches or in stand-alone kiosks which dispenses cash, takes deposits, transfers money between two accounts, or offers other banking services when a personal coded card is used

ATM Card - A plastic card used in an automated teller machine (ATM) to access an account to withdraw funds, transfer funds between accounts, make deposits or complete other banking inquiries 

Automatic Payment System - A convenient and safe way to pay bills when you authorize an automatic electronic funds transfer from your checking account or credit card, eliminating the need to pay bills with a check, cash or money order

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BB

Back End Load Fees - A fee charged by a mutual fund or annuity to any investor who wants to get his money out of the fund, designed to discourage withdrawals

Balance - The amount of money in an account; the difference between the amount owed and the amount paid.  For example, you paid $100 on your $500 credit card debt, leaving a balance of $400.  

Balance a Checkbook – To compare and reconcile one’s own record of a checking account with the official one kept by one’s credit union or bank

Balance Transfer Moving the balances from one credit card to another, usually to take advantage of a lower interest rate; can be done with special checks or new account credit card application forms  

Balance Transfer Fee A fee that you may be charged for transferring a balance from one credit card to another, usually to take advantage of a lower interest rate

Balanced Funds - A mutual fund invested in both stock and bonds, and sometimes property and other kinds of investments in an attempt to provide both growth and income 

Balanced Portfolio - An individual's investments that are a blend of either kind of investments such as stocks and bonds, or different kinds of stocks in different industries so as to diversify and minimize risk

Balloon Payment - A large payment due after you've paid a series of smaller ones on a regular basis, usually monthly; the total total interest and principal balance due at the end of the loan term

Bank - A for-profit organization, usually a shareholders' corporation with a state or federal charter, that deals in money and provides financial services. Banks accept deposits, pay interest on them, issue and collect checks, invest in securities and make loans.  Shareholders may receive dividends on bank profits as a return on their investment

Bank of Last Resort - The Federal Reserve Bank in the United States, which helps banks when no one else will lend them money

Bank Panic - Occurs at a financial institution when many people withdraw money from their accounts in a short period of time. Sometimes called "a bank run"

Bankrupt - A person or company that has been legally declared financially insolvent due to an inability to repay his/her debts  

Bankruptcy - When a person or firm is unable to repay its debts, typically considered the credit solution of last resort; a court proceeding or legal process in which a firm or person's debts are paid off or forgiven by a court-designed plan that sometimes includes selling what the company or person owns to pay off debts

Bear Market – A period in which the stock market does poorly, there are more sellers than buyers, and investment prices are falling faster than their historical average. Some people say the fall has to be at least by 15%.  

Beneficiary – A person or thing (such as a charity) that receives assets from an estate, trust, insurance policy, etc

Bereavement - The feeling of sadness and loss over the death of a loved one

Black Tuesday - October 28, 1929, Stocks fell 13% and the Great Depression began

Blended Funds – A mutual fund invested in  both stock and bonds, and sometimes property and other kinds of investments in an attempt to provide both growth and income

Blue Chip Stocks – Stock in a well established national company with a long track record of paying dividends and good management.  A high quality stock

Board of Directors – Individuals that are elected by shareholders to oversee the management of a company.  The board members are paid in cash and/or stock, with the exception of credit union board members who are unpaid volunteers serving as representatives of the credit union's membership. 

Bond - Securities representing a debt owed to investors by the bond issuer (businesses or governments).  Issuers borrow money from the bondholders who purchase their bonds.  The bond issuers promise to pay you interest at specific intervals and the original amount invested (principal) within a certain length of time (typically a year or more) at maturity. The Federal government, states, cities and companies sell bonds to investors to raise money for their projects

Bond Funds – A mutual fund with its money invested in bonds

Bond Market – The market where new and previously issued bonds are purchased and sold

Bond Rating – The grade a bond gets from a company like Standard & Poor’s that predicts the chances it might default (not repay the loan).  Grade AAA is best, Grade AA second, and anything below BBB is inferior

Bounced Check – A check returned by the credit union or bank because of insufficient (lack of) funds in the account

Branches – Locations of a bank or credit union in addition to its home office where banking operations take place

Broker – A licensed person who charges customers a fee (or commission) to execute a buy or sell order for stocks, bonds, mutual funds, etc.

Brokerage – The business of acting on behalf of another (principal) for a fee or commission; the employer of brokers or agents

Budget – An itemized estimate of expenses and income for a set period of time, designed to control spending and encourage saving; a plan of how much money a person, business, government or other organization is able to spend and how it plans to spend it

Bull Market – A period in which the stock market does well, there are more buyers than sellers, and investment prices are rising faster than their historical average

Bureau of Engraving and Printing - The agency of the U.S. Treasury responsible for printing our money and postage stamps

Business – An enterprise that brings in money from the sale of goods or services

Business Plan – A document that gives an overview of the company, its management, future goals and objectives, along with financial information

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CC

Call Period – Usually begins one year after the date a CD is issued. Normally, a bank, credit union or brokerage would call a CD if interest rates drop

Callable Bond – A bond in which the issuer retains the right to pay it off early and save money on interest

Callable CD – A Certificate of Deposit with terms that allow the credit union, bank or broker to call away the CD from the investor after the call period has expired, but before the CD matures

CAMELS – A rating system used by the Federal Reserve that considers a credit union or bank’s capital, assets, management, earnings, liquidity and sensitivity to markets

Capitalization – The market price of a company calculated by multiplying the number of shares outstanding by the price of each share

Cash – As a noun, bills and coins; as a verb, the act of getting or giving cash for, such as to "cash a check"

Casket – A box made of wood, metal or plastic used to house the body of a dead person or cremains for burial; sometimes referred to as a coffin

Cash Advance – Obtaining cash from your credit card instead of using it to make a purchase.  The interest accrues immediately from the date of the advance (as opposed to a credit card's grace period), and the interest is typically higher than on purchases.  Cash advance transaction fees may also apply

Cash Advance Fee – A fee charged over and above your interest if you borrow cash from your credit card

Cash Reserve Asset – An asset  that can be used as cash, such as currency, and money kept in savings and checking accounts

Cashless Society – One that operates only on electronic transfers of money

Casualty Insurance – Insurance that protects against sudden, unanticipated events like accidents

Certificate of Deposit – A type of investment from a credit union, bank, thrift or broker that requires that you deposit a certain amount of money that will be available to you plus a guaranteed rate of return (interest) on a certain date.  Each CD has a minimum deposit and guarantees a specific interest rate for a defined period of time, ranging from one month to several years (its maturity); sometimes called a share certificate   

Chapter 7 Bankruptcy – A legal process in which an individual or married couple is declared legally insolvent and their debts are forgiven.  The individual or couple must agree to sell off assets not exempt from the proceeding to pay off what they owe

Chapter 13 Bankruptcy – A legal process in which an individual or married couple agrees to a court-ordered payment plan of three to five years for their debts

Charge Off – A debt that is unpaid and therefore "charged off" an income tax return by the person owed the money

Charity - An organization that helps others or promotes a cause for the public benefit

Charter - An authorization by the government to do business

Check – A written order to a credit union or bank to pay a specific amount of money to a person or business from money on deposit at the credit union or bank

Checkbook Register – A record of all checks, withdrawals and deposits kept by the holder of a checking account

Checking Account – An account that allows the holder to write checks against money deposited in that account

Check Truncation – All original cancelled checks are retained by the credit union or bank instead of returned to the account holder in a monthly statement 

Circulation – Money that is distributed by the government and available for use

Cliff Vesting - According to some retirement plans, an employer can fully own an employee's retirement benefits until the employee has worked for the company for a certain length of time

Close-ended Lease – A kind of car lease in which you pay so much a month to rent a car for a certain number of years and then at the end of that leasing period you do not owe any more money

Closing Costs – In real estate, extra fees and expenses that occur when property is sold, usually paid by the buyer

COBRA -  Stands for Consolidated Omnibus Budget Reconciliation Act, a law that gives people the right to temporarily buy their group health insurance policy if they lose benefits because of job loss, divorce, or other events

Collateral – Any asset that backs a loan and can be taken by the lender if the borrower defaults or does not pay by the terms of the loan; property such as your house or car that you promise to give the lender if you cannot repay the loan

Collision Insurance – A type of automobile insurance that pays to repair damages to an automobile after an accident

Commercial Bank – An institution that makes business loans, handles deposits and other financial services

Commission - A fee paid by an investor to a broker to execute a transaction, such as buying or selling stock

Common Bond - Something that distinguishes the members of an individual credit union, such as an employer group, residence, or other community, from the general public

Common Stock – Stock that entitles the holder to voting rights and shares in profits (dividends), but put the holder behind creditors, bondholders and preferred stock owners if the company goes bankrupt

Comp – Real estate term for “comparable sale price”. Realtors look at the prices that homes and properties sold for recently to determine how to price a similar property

Comparison Shop – To examine multiple products or services to see how similar or different they are in order to make the best purchasing decision

Competition – Other business enterprises that sell a similar product or service

Compound Interest – Adding the interest earned in the current period to the principal and computing the next period’s interest on this “compounded” total amount.  Example:  If you deposited $100 into an account at 10% interest compounded annually, you'd have $110 at the end of the first year, and $121 after the end of the second year.  The extra $1 is the compound interest earned on the first year's interest.  Compounding has a snowball effect:  the more frequently compounding occurs, the sooner your accumulated interest will generate additional interest.  Example:  $1,000 invested at 10% for 20 years would grow to $3,000. With annual compounding your $1,000 would become $6,730 -- but if the interest is compounded monthly instead of annually, you end up with $7,328 -- more than 7 times your original investment

Comprehensive Insurance – A kind of automobile insurance that pays if a car is stolen or damaged by storms or other natural occurrences

Consumer – A person who buys and uses goods and services for their own use and not for manufacture or resale

Consumer Society – The economic pattern of consumption found in the U.S. and elsewhere that encourages people to purchase more and more things

Convertible Bond – A bond that can be changed into a certain number of stock shares based on a pre-stated agreement

Co-op - An arrangement whereby each participant is part owner of an asset or group of assets

Co-payment -  The amount of money a policy holder must pay for a medical service or prescription before the insurance pays

Corporate Bond – A bond issued by a corporation

Counterfeit – Fake, usually refers to currency that has been duplicated but is not authentic

Coupon Rate – The interest rate paid on bonds

Coverdell Education Savings Account – Formerly known as Education IRA, it is a type of individual retirement account enabling the contribution of up to $2000 per year for each child up to the age of 18 by the parents in the family. 

Credit - Also called debt, credit is given when you are allowed to make a purchase with the promise to pay later.  A bank or credit union gives credit to you when it lends money

Credit Agencies – Sometimes called "credit bureaus," these organizations research and record the credit history of consumers so that lenders can make decisions about the ability for people to repay loans.  The three major U.S. credit agencies are Equifax, TransUnion and Experian  

Credit Card – A card issued by a credit union or bank used by consumers to charge purchases and borrow money paid back over time

Credit History - A record of loan repayment

Credit Limit - The maximum amount of credit available to a person

Credit Report - Your credit payment history, which includes a record of your borrowing and payment habits, maintained and sold by consumer reporting agencies such as Equifax, TransUnion and Experian

Credit Scoring - A number system designed to predict your likelihood to pay your bills.  Lenders use a scoring system to determine whether to extend credit to you in the form of a loan or credit card

Credit Union – A not-for-profit financial institution owned and operated by its members and chartered by a state or federal government.  Credit unions provide financial services for members, who become shareholders once they deposit money.  Members usually share something in common, such as where they work, live, or go to church

Creditors - Those who lend money

Cremation - A process which reduces the body of a dead person to ashes and bone fragments through the use of intense heat and evaporation.  The ashes (cremains) are then either placed in a building that houses cremated remains called a columbarium, buried, scattered, or placed in a container called an urn and kept at home

Currency – Any form of money in public circulation; bills and coins used to purchase goods and services

Currency Exchange Rate – Refers to the value of one currency compared to a foreign one. For example, a dollar (American money) can have an exchange rate of 100 Pesos (Mexican currency)

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DD

Day Traders – A stock trader who buys and sells stocks very rapidly, sometimes holding them for less than one day

Debit Card – A plastic card issued by a credit union or bank used to take money immediately out of the person’s checking or savings account when he/she makes a purchase or uses an ATM 

Debt – The money owed when you borrow money or buy something using a credit card; the financial obligation of businesses and government in the form of bonds or loans whereby the borrower promises to repay the lender all the money originally invested plus interest by a specified date

Debt Consolidation – The process of combining all outstanding debts into one loan payment, often with a lower monthly payment and a longer repayment period 

Deductible – The amount of money an insurance policy holder has to pay before the insurance company will reimburse for a loss; for tax purposes, the expenditures that you may subtract from your gross income in figuring your income tax owed

Deduction – The amount of money subtracted from gross income that is otherwise taxable

Default – Failure to make payments according to the terms of a loan

Deflation – Decline in the price of goods and services (opposite of inflation)

Denominator – The bottom number in a fraction

Denomination – The monetary value assigned by the issuing government to a coin, such as one cent, five cents, ten cents, etc.

Deposit – Putting funds into a credit union or bank account; money given in advance to show your intent to complete the purchase of a property

Depositary Institution - An organization which holds assets for businesses or individuals

Depreciate – To decrease or lessen in value

Direct Deposit – Having funds put into an account at a credit union or bank electronically; often done with paychecks, direct deposit of Social Security checks, tax refunds, stock dividends, expense reimbursements and pensions can also be done

Direct Payment - A payment made into a savings, checking or credit card account by electronic transfer of funds

Disability - Inability to work due to an accident or illness

Disability Insurance - A form of insurance that pays benefits to replace your salary if you become too disabled to perform your job

Discount Broker -  A broker who executes trades but does not give any investment advice to a client.  Typically fees or commissions are significantly lower than those of a full-service broker

Discount Price Bond - A bond selling at less than its par price

Discount Rate - The interest rate the Federal Reserve charges banks to borrow money

Discretionary Income – Money that can be spent at the discretion or wishes of the person; income that is left over after necessary bills are paid

Distressed Owner – A mortgage holder or property owner who must sell quickly because of circumstances in his or her life

Distribution – A company's payment of cash, stock or products to their shareholders

Diversify - To divide investments among different companies or types of investments (for example, stocks, bonds and mutual funds) or among several industries to reduce risk or limit losses in a particular market 

Dividend - A portion of earnings that a company’s board of directors decides to pay back to its shareholders (usually quarterly) in the form of cash, stock or property

Dollar-Cost Averaging - A method of investing where money is invested at regular intervals in the same investment.  Since you buy the same dollar amount each month, the amount of stock you buy fluctuates based on the stock price.  Though this method doesn't guarantee a profit or guard against loss, the average cost of each share is generally lower than if it was bought at random times

Dow Jones Industrial Average - Sometimes called “The Dow,” the DJIA is the best known barometer of American stocks based on thirty actively traded blue chip stocks (including General Motors, IBM, CocaCola, McDonalds and Walt Disney among others).  Quoted in points rather than dollars, the DJIA is calculated by adding the trading prices of the stocks and using a divisor adjusting for stock dividends, splits, substitutions, mergers, etc. 

Down Payment - In real estate, an amount of money paid when a mortgage is taken out, usually between 6% and 20% of the property’s worth  

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EE

Earnings – The excess of revenues over expenses for a given period of time; the reason for-profit corporations exist and often the largest contributor to a stock's price; also called income

Economy - The way in which people and natural resources are used to produce goods and services; an organized system for the production, distribution and consumption of goods and services

Economic Indicators - Key statistics that may tell how healthy an economy is. For example, the statistic showing a low number of unemployed people may indicate a strong economy. See Leading and Lagging Economic Indicators

Education IRA – Now called the Coverdell Education Savings Account, this IRA allows parents, friends, relatives or the child to set aside money in a tax-free account for education

Educational Savings Act – Passed in 2003 by Congress, this act allows parents to set aside up to $2,000 per child per year in a tax-free account to be used for education

Embalming – The process of treating the body of a dead person with chemicals as a way to preserve the body and restore the physical appearance

Employee – A person who works for another in exchange for pay

Employer – One who hires another person to work for wages

Encryption - A process to protect privacy and access to certain information on the Internet in which numbers and letters are scrambled in a computer code that is unreadable except to those with a secret decryption "key" or password; often used in the transmission of credit card numbers or other sensitive data

Endorse a Check – Provide a signature on the back of a check made out to you to get the check amount in cash or deposited into your account

Entrepreneur - A person who assumes the risk of starting a business in hopes of making a profit

Equity - Ownership of an asset; for example, stocks are equity because they represent ownership of a company

Escrow - Property held by a third party until all the terms of a contract (usually mortgage) are met

Estate Plan - The plan for what to do with a person’s possessions after that person dies

Euro - Unit of money used by twelve European countries

Exchange Rate - How much a currency is worth compared to another currency; for example, how many dollars are equal to one Euro or how many yuan are equal to one dollar

Exclusionary Clause - In an insurance policy, a clause that specifically excludes coverage of a certain event such as a flood or a certain person such as a member of the household with a criminal history

Executor – The person appointed in a will or by a judge to carry out the terms of a will

Expected Family Contribution (EFC) – The amount of money that the family is expected to be able to contribute to the student's education, as determined by the Federal Methodology need analysis formula approved by Congress. The EFC includes the parent contribution and the student contribution, and depends on the student's dependency status, family size, number of family members in school, taxable and nontaxable income and assets. 

Expenses – Costs a business pays out for things like rent, electricity and wages.  Individuals incur costs for things like food, clothing, housing and entertainment.

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FF

Face Value - Sometimes referred to as "par value", the face value is the principal amount of a bond as stated on the certificate and redeemable at maturity

FAFSA - Free Application for Federal Student Aid - Form used to apply for Pell Grants and all other need-based aid. As the name suggests, no fee is charged to file a FAFSA.

Fair Market Value - The amount that a willing buyer would pay to a willing seller to purchase an asset (house, car, boat, etc.) at a given point in time.  As it relates to auto insurance, the fair market value is typically based on either the NADA or Kelley Blue Book value

Farmers Home Administration - A division of the U.S. Department of Agriculture, that provides financing to farmers and other qualified borrowers who are unable to find financing elsewhere for housing, farming, business, industry and community facilities 

Federal Deposit Insurance Corporation (FDIC) - A U.S. government agency created in 1933 that insures accounts in banks and thrifts (savings institutions) up to $100,000 each

Federal Funds Rate - The interest rate on overnight loans that banks with excess reserves at a Federal Reserve Bank charge other banks

Federal Home Loan Bank System (FHLB) - Created in 1932 by Congress to help ensure that community-based financial institutions had sufficient funds available for making home loans.  The FHLB system (comprised of 12 district banks) provides wholesale housing finance, community lending and other services to its owners/members, which include credit unions, savings and loan associations and community banks.

Federal Income Tax - A levy on a person's or business' income that must be paid to the U.S. Government; Federal income taxes are used to provide for national programs such as defense, community development, veteran and foreign affairs, law enforcement and payment of interest on the national debt

Federal Open Market Committee (FOMC) - Made up of 12 members from the Federal Reserve Board and the Federal Reserve bank presidents, it sets policies and interest rates of the Federal Reserve System

Federal Reserve Bank - One of twelve district banks in the Federal Reserve System set up to help regulate the money supply by keeping funds in reserve and lending money to its member financial institutions

Federal Reserve Board - The governing board of the Federal Reserve System. The seven members, including the Chairman, are appointed by the President of the USA, and serve 14 year terms of office

Federal Reserve Requirements - The amount of money the Federal Reserve System makes each bank keep in reserve - that is, money they are not allowed to loan out  

Federal Reserve System - The central banking system of the U.S., comprised of the Federal Reserve Board, the 12 Federal Reserve Banks, and the national and state member banks

Federal Trade Commission (FTC) - A large government agency that enforces consumer protection and anti-trust laws. Part of its job is to help victims of Identity Theft

Fee-for-Service Health Insurance -  Traditional kind of health insurance in which the company pays for whatever medical services the policy holder uses

FICA - Federal Insurance Contributions Act, the law that requires people to pay taxes to the Social Security Administration for programs that provide benefits to retired workers and their dependents as well as for the disabled and their dependents

FICO Score -  A number between 300 and 850 that assesses a person's credit risk.  The higher the number, the lower the interest a person will pay

Finance Charge - The total cost of credit a consumer must pay on a loan, including interest payments, service fees, late fees, transaction fees, and points

Financial Aid - Money provided to the student and the family to help them pay for the student's education. Major forms of financial aid include grants and scholarships, loans and work study programs

Financial Institution - A bank, savings and loan, credit union or other institution organized under either national or state charter and capable of both accepting deposits and making loans

Fixed Expenses -  Expenses that stay the same from month to month

Fixed-Income Investment -  Investments in government, corporate or municipal bonds (which pay a fixed rate until maturity) preferred stock (which pays a fixed dividend), certificates of deposit and other instruments that pay a fixed interest rate over a specific period of time

Fixed Interest Rate -  One that does not change for the life of the loan or during the credit card term.  A card issuer can change the fixed interest rate by giving a minimum of 15 days' notice and amending the cardholder agreement

Fixed Principal U.S. Bond -  One that pays a fixed rate of interest and repays principal at par value

Fixed Rate Annuity - An annuity in which the insurance company guarantees the interest and principal and pays a fixed payments for the length of the annuity

For-Profit – An organization or business that exists primarily to make a profit (to take in more money than it spends)

Foreclosure – A legal process in which a property is taken away from its owner, usually by a bank because the owner has not made payments on a mortgage

Foreign Exchange Market - When foreign exchange dealers in major cities trade the money of different countries

Franchise - A business that has a contract with a company to sell its products and/or services in a certain area

Fraud - When a person intentionally lies or cheats to get something they want

Front End Load Fees -  A fee charged at the time of initial purchase of some mutual funds, annuities or life insurance policies

Full Service Broker -  A broker who typically charges higher fees or commissions and offers investment research and financial advice as well as executes trades on behalf of a client

Funeral - A ritual or gathering of people to remember the life of a dead person.  A ceremony at which the body of a dead person is buried or cremated

Future Value of Money - The amount of cash at a specified date in the future that is equivalent in value to a certain sum today.  Future value represents principal and interest

Futures - A contract for the sale of financial instruments like bonds or physical commodities like grain for future delivery on a commodity exchange

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GG

Garnishment - A way of collecting debt by taking money directly from the debtor's salary

Global Funds – A mutual fund with foreign investment

Grace Period – A period of time, typically 20-25 days, from the billing date of your last bill to the due date of your current bill, during which you can pay your credit card bill or loan in full without being charged interest or finance charges 

Grant – A type of financial aid based on financial need that the student does not have to repay

Great Depression – A period of time in U.S. history (1929-1939) marked by great hardship when many people lost their jobs and many businesses failed  

Grief – The personal expression of thoughts and feelings about a loss

Gross National Product (GNP) – Measures an economy's total income.  The GNP is the broadest measure of the nation's production. It measures the market value of all newly produced goods and services in the United States. When GNP is down, it shows a slowing down in the economy. To counteract this, the Federal Reserve may loosen money by lowering interest rates

Growth Funds – Mutual funds with money invested in companies that may be small now but are expected to grow

Growth Stocks – Stocks of companies that have experienced rapid growth in revenue or earnings and are expected to continue to grow dramatically.  These stocks are typically more risky than other stocks, and there is usually little or no dividend payments

Guaranteed Replacement Cost - Insurance term that refers to the value of repairing or replacing an item back to its original state before the damage to it occurred

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HH

Hardship Withdrawal - With 401(k)s, a provision that lets people take money out of their retirement fund in times of financial emergency

Health Insurance -  Insurance that pays for specified expenses related to medical treatment needed for sickness or accidental bodily injury

Health Maintenance Organization (HMO) -  A managed care system, usually for-profit, in which an insurance company contracts with doctors, hospitals and other providers to give health care to its policy holders

High Yield Bonds – A bond that pays more interest than average but often carries a higher risk to its investors, has a rating of BB or lower, and often referred to as a "junk bond"

Holiday Club Savings Accounts - A type of savings account in which a person puts a certain amount of money every week for 50 weeks to save for holiday expenses

Home Equity - The current value of a house minus what you owe on it; for example, if your home is worth $200,000 and you owe $150,000 on your mortgage, then you have $50,000 equity in your home

Home Equity Loan - A loan secured by your home, generally used to make home improvements or to consolidate debt; closed-end loans that are repayable according to a fixed schedule

Homeowner’s Insurance – Insurance that protects people against home and property losses and liability claims

Hope Scholarship – A tax credit up to $1500 per individual during his or her first two years of college

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II

Identity Theft - A crime in which a thief steals another person's identity. Such a thief uses the victim's Social Security number and other personal information to open up fraudulent credit card accounts, take out mortgages and otherwise steal money by using the victim's name.

Immediate Annuity – An annuity set up so that the annuitant pays a lump sum to an insurance company, which in turn immediately starts his benefits. There is no accumulation phase

Income – Earnings from a job or investment; for businesses, it's the same as earnings or revenue received from selling a product or service, rent, interest or dividends 

Income Funds – A mutual fund with investments in safe companies that pay consistent dividends and do not concentrate on growth

Income Producing Asset - An asset that earns money for its owner usually on a regular basis, such as every month

Income Property – Usually a building with tenants whose rents provide a regular income for the owner

Income Stocks – Stocks that have a consistent, stable and above-average dividend, such as public utility stocks

Income Tax – The tax on net income of individuals or corporations after allowable deductions have been taken

Independent Practice Arrangement -  A managed care system in which an insurance company contracts with a doctor to provide services at set costs

Index Funds – A mutual fund with stocks picked by computers so that they are tied to an index such as the Dow Jones or Standard & Poor's

Individual Retirement Account (IRA) - A special Federal program that lets a person put money aside each year with all taxes deferred until he/she withdraws from the account after the age of 59-1/2 years old (or earlier, subject to a penalty)

Inflation - Increase in the price of goods and services as measured by the Consumer Price Index (CPI).  The CPI is based on a "market basket" of about 400 goods and services.  Inflation can decrease the value of money so that it is worth more today than the same amount is worth tomorrow.  When prices rise 100% a year or more (called hyperinflation) people lose confidence in the currency and put assets in things like real estate or gold

Inflation-Indexed – A note or bond in which the principal is indexed to the inflation rate so the interest and  principal can go up or down depending on the rate of inflation, as measured by the Consumer Price Index (CPI)

Ingot - A mold for metal casting; a metal cast in a convenient shape before it is made into something else

Initial Public Offering (IPO) – The first sale of a company’s stock open to the public  

Insufficient Funds – Also referred to as NSF (non-sufficient funds); when your account does not have enough money in it to cover a check or withdrawal 

Insurance - Protection from certain losses in the future when payments (or premiums) are made to the insurer

Insurance Broker – An agent who sells insurance from more than one company

Insurance Company – Any business that furnishes insurance protection to the public

Insurance Deductible – The amount of money the policy holder has to pay before the insurance company will pay out on a claim

Insurance Policy Limits - The maximum amount of money an insurance company will pay for one claim

Interest - The fee charged by a lender to borrow money; the amount paid for the use of your money on deposit; how much a corporation has to pay to people who buy their bonds.  Typically stated as a percentage of the amount (or principal) borrowed or paid.  For example, your car loan has an interest rate of 8% and the money you invest in a CD earns 5% interest     

Interest Rate – The rate charged by a lender to borrow money, expressed as a percentage when you divide the amount borrowed by the annual interest charged 

International Funds – A mutual fund with foreign investment

Intestate – A legal term that refers to those who die without a will

Introductory Rate -  Sometimes called a "teaser" rate, this is a low APR that applies for a limited period of time to entice you to take out a loan or open a credit card account

Investing -  Moving money from savings into a variety of investment options such as stocks, bonds, mutual funds, real estate, CDs, collectibles or other investments with the hope that this money will grow in value and with the understanding that risk is involved

Investment -  An item of value purchased with the hope of appreciation; risking of money and time to get something in return

Investment Asset -  A type of asset that will build wealth

Investment Club – A group that meets to pool their money and knowledge to make investments

Investor - A person who buys or sells securities for his/her own account in order to receive an income or make a profit; a person who invests in mortgage instruments or other items of value such as real estate with the intent to maximize return while minimizing risk

Issue - In wills, a legal term referring to all biological and adopted children, their children and their children’s children, etc.

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JJ

Job Applicant – A person seeking a job with an organization and who completes a job application form 

Job Application – A form completed by a job seeker that lists the person's education, work history, and personal information 

Job Interview – A question and answer session between an employer and job applicant held in person or over the phone to determine if the applicant is suited for the job

Joint Account – A savings or checking account held by more than one person

Joint Annuity – An annuity set up so that two people benefit from an annuity.  If the first one dies, the second one collects the annuity payments

Junk Bond – A bond with a BB credit rating or below; also called high-yield bonds

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KK

Kiosk – An independent structure that stands alone for the purpose of supplying a product or service; an ATM located off-premise from a bank or credit union   

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LL

Lagging Economic Indicators - Economic indicators that follow trends in an economy.  Examples include the unemployment rate, prime rate and labor costs

Large Cap Stock – The stock of a company whose market value is over $5 billion; some mutual funds specialize in large cap stocks

Late Payment Fee – A fee charged when your credit card payment is late

Leading Economic Indicators - Economic indicators that forecast what may happen next in an economy. For example, a rise in unemployment insurance claims may predict a downturn in the economy. See Lagging Economic Indicators

Lender of Last Resort - Refers to financing provided by the Federal Reserve.  See Bank of Last Resort

Liability -  A debt or financial obligation of a company or individual

Liability Insurance – Insurance that will cover you from sustaining financial loss after you, your family members or pets cause damages or injuries to another person's body or property; a kind of automobile insurance that pays for damages and legal expenses after an automobile accident that resulted in bodily injury or property damage

Lien - A right granted to a lender over a borrower's property or money when the borrower cannot repay a debt to the lender

Life Certain Annuity - An annuity set up so that heirs can inherit if the annuitant dies

Life Insurance - A type of insurance that pays your beneficiaries (people you have designated) a certain amount of money upon your death.  You make periodic payments (called premiums) when you enter into a contract with a life insurance company 

Lifelong Learning Tax Credit - A tax credit up to 20% of educational expenses for students in their junior and senior years of college, professional, graduate or adult students

Line of Credit - An agreement by a financial institution to extend credit up to a certain amount for a certain time.  Examples include home equity line of credit and credit limits on credit cards 

Liquid - Easily converted to cash

Liquid Asset - One that is easily converted to cash

Living Trust - Commonly used instead of a will in order to avoid probate proceedings, a living trust is a revocable trust in which the grantor transfers some or all of his property to one or more beneficiaries. Also called an inter vivos trust

Living Will – A document stating the wishes of an individual in advance regarding the use of life saving devices or support in the event that the person has suffered an injury or is no longer competent to convey his/her desires, as in an incurable and terminal illness

Loan - A sum of money borrowed for a specific length of time, usually with interest

Loan Shark - One who loans money at exceptionally high rates

Lump Sum - A large one-time payment of money

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MM

Manufacturing Economy – An economy dominated by manufacturing jobs

Marginal Tax Rate – The income tax rate at which the last dollar of your income is taxed. Under federal law, you often pay a lower tax rate on your first dollar of taxable income than you do on your last dollar. The marginal rate is the highest rate at which your income is taxed.

Maturity Date – The date on which a debt must be paid.  When you buy a bond, the issuer agrees to pay back all of your money on this day

Med Cap Stock – The stock of a company whose market value is between $1 billion and $5 billion

Medicaid -  Government health care plan for low-income people

Medicare – A Federal government program that pays for certain health care benefits to people over 65 years of age

Medigap Insurance - Health insurance bought from a private company to supplement Medicare coverage

Micro Cap Stock – The stock of a company with a very small market value

Minimum Balance – The least amount of money required to open an account or to be held on deposit in an account in order to avoid paying fees

Minimum Payment – The lowest amount a borrower is allowed to pay toward a loan, line of credit, credit card balance or other debt in a given period of time

Minimum Wage – The least amount allowed by law that an employer can pay its workers on an hourly basis

Monetary Policy - The actions of the Federal Reserve that determine the size and rate of growth of the money supply, which in turn affects interest rates

Money Market Accounts - Savings accounts that earn interest, are liquid and have limited check-writing capabilities.  These accounts typically require a minimum deposit to open and that you maintain a certain balance in the account

Money Market Fund - A fund that invests only in highly liquid and safe short-term money markets like Treasury bills, certificates of deposit and commercial paper. The fund's goal is to preserve the investors' principal with some small dividends. Each share is kept at $1 for easy accounting, but the interest rate changes.  A money market fund investment is not insured or guaranteed by the FDIC or NCUA, and it is possible to lose money by investing in a money market fund.  Most funds are not federally insured but some are covered by private insurance       

Money Supply - The total amount of money in circulation

Mortgage - A loan secured by real estate property (house or building)

Municipal Bond – A bond issued by a city, state or county for capital expenditures

Mutual Fund - A pool of money put together by a group of investors and managed by an investment company; a company that sells its stock and uses the money to invest in other companies.  Mutual funds help you to lower your risk through diversifying by investing in different stocks, bonds and other investments

Mutual Fund Company - A company that pools the money of a group of investors and invests in a group of assets (stocks, bonds, and other investments) in accordance with a stated set of objectives

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NN

National Credit Union Administration (NCUA) – Federal agency that charters and supervises federally chartered credit unions and insures deposits up to $100,000, through the operation of the National Credit Union Share Insurance Fund.

Negative Net Worth - The total amount of money a person owes after he sells everything he owns

Net Worth - The amount of money a person has left if he were to pay off all his debts and sell everything he owns

No Fault Laws – Automobile insurance laws that require each party injured in an automobile accident to pay for his/her losses regardless of whose fault the accident is

No Load Funds – A mutual fund that does not charge a fee to buy and sell stocks

Not for Profit – A special kind of organization that is focused on education or charity and does not operate for the sole purpose of making a profit

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OO

OASDI – Old Age Survivor & Disability Insurance; the real name for Social Security

Online Banking - Linking your computer to your bank or credit union's computer via the internet in order to electronically transfer money, check account balances, apply for a loan, pay bills, or download for other uses

Oniomania - The exaggerated need or urge to buy beyond the realistic needs of the individual; compulsive shopping

Open-ended Lease - A kind of car lease in which you agree to pay so much a month to rent a car, but at the end of the lease the vehicle will have a market value comparable to the amount specified in the lease contract, sometimes called an "estimated residual value." If the amount the car is resold for is equal to the estimated residual value, you owe nothing. If it isn't, you may owe all or a portion of the difference, often called an "end-of-the lease payment"

Opportunity Cost - The value of the next best alternative that is given up when making a choice.  For example, if you want to buy a cheeseburger and fries, but you only have enough money to buy one item, the opportunity cost (or what you are giving up) is the value of the other item you did not buy in order to get what you wanted more.

Option - The exclusive right but not obligation to buy or sell something before or on a specific date for a set price

Overdraft Line of Credit - A loan extended automatically by a financial institution to cover insufficient funds in an account

Overdraft Protection - A feature of some checking accounts which extends a line of credit to write checks for more than the actual account balance. Instead of getting charged for bouncing a check, overdraft protection provides the account holder with an instant loan or transfer from a savings account to cover the insufficient funds check.  

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PP

Par Price Bond – A bond that is selling at its original issue price or its value at maturity

Par Value – Also called the face or maturity value, this is the amount the issuer of a bond agrees to pay at the maturity date

Passbook Savings Accounts - A savings account in which the holder records every transaction in a passbook

Payday Loans – A short-term (usually less than 14 days) small cash loan in which the borrower post-dates a check for the amount borrowed plus a fee.  The lender cashes the check at that later date.  Also referred to as cash advances, check loans, payroll advance loans, deferred presentment, and hold-a-check loans   

Pay Out Phase – The second period of an annuity when the annuitant is receiving money from the insurance company

Pell Grant – A federal grant that provides funds of up to $2,340 based on the student's financial need

Penalty Rate – As defined in a credit card agreement, a higher annual percentage rate (APR) may be applied to your account in the event that you make late payments

Penny Stocks – One that sells for less than $1 a share, sometimes defined as less than $5 a share.  Usually a stock in a small cap company

Pension Plan – A fund that is established for the payment of retirement benefits (a lifetime income after you cease working)

Percent Yield – Annual dividends divided by the price of a stock.  Used as a common method of evaluating stocks

Periodic Rate - The rate you are charged each billing period. For most credit card plans, the periodic rate is a monthly rate, calculated by dividing the APR by 12. For example, a credit card with an 18% APR has a monthly periodic rate of 1.5%

Personal Loan - A loan extended to an individual for a specific purpose other than buying a house. Typically these loans are unsecured; also called consumer loan or consumer credit loan extended to an individual for a specific purpose

Personnel Agency - A company that provides job seekers with interviews with companies that are hiring, matching job openings with their work experience and goals.  Typically, a personnel agency charges a fee which is sometimes paid by the employer, but may be paid by the applicant.  

PIN Number - Personal Identification Number that is issued by a credit union or other financial institution to be used by an account holder when using an ATM or debit card

PIP Insurance – Personal Injury Protection (PIP) insurance which pays for medical expenses and other costs after an accident

PLUS Loans – Federal loans available to parents of dependent undergraduate students to help finance the child's education. Parents may borrow up to the full cost of their children's education, less the amount of any other financial aid received. 

Points -  In real estate, every point equals one percent interest, paid at the beginning of a mortgage instead of over the life of it

Point of Service Plan -  A kind of health insurance in which a primary physician monitors and makes all choices for each policy holder assigned to him or her

Portfolio – All the investments (stocks, bonds, real estate and other assets) of an individual or organization

Power of Attorney – A legal document that gives authorization to another person to act on your behalf 

Preferred Provider Organization -  A managed care health insurance plan in which the insurance company provides a list of health providers to be used by its policy holders

Preferred Stock – Class of stock that entitles the holder to fixed payments of dividends but usually not voting rights. If the company fails, preferred stock holders are paid before common stock holders

Premium – A payment for a policy to an insurance company, usually made on a regular basis (for example, monthly) 

Premium Price Bond – A bond that is selling at more than its par price

Prepaid Tuition Plan – A state sponsored plan that allows people to pay for state college tuition and fees at today’s prices instead of paying once the child is enrolled

Present Value – Same as principal.  Example:  You deposit $10,000 in a mutual fund - that $10,000 is the present value

Present Value of Money – The value of money you receive in the future stated in today's dollars

Price/Earnings Ratio (P/E) - Calculated by dividing a company's yearly earnings by its capitalization or by dividing a stock's yearly earnings by its price.  Used as the most common method of determining the value of a stock

Principal - Total amount being loaned or invested; the sum of money in an account not including interest.  Example:  You buy a car for $20,000 using $4,000 of your own money and you borrow $16,000 - the $16,000 is the principal of the car loan

Private Bank - A bank which offers specializes in private banking services to clients with large accounts (the minimum balance varies) who want their money invested and managed for the long term

Private Mortgage Insurance (PMI) – Insurance that a lender may require from a buyer of real estate who has a low down payment on the loan

Probate Court – The court that determines whether a will is valid and that oversees the administration of estates according to valid wills

Product – The thing that a company makes and offers for sale

Profit - The amount of money a business has after it pays off all its expenses; the positive difference between the buying and selling price of an investment

Progressive Tax - A tax system with higher rates for people with higher incomes.  The U.S. federal income tax system is based on the progressive tax, with rates starting at 15 percent and rising to 39.6 percent for higher-income taxpayers

Property - Legal possessions or real estate

Property Insurance - A type of insurance that provides a benefit if insured items are damaged or lost because of fire, theft, accident, or other cause described in our policy

 

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QQ

Quarterly - In three month intervals, as in "interest is compounded quarterly"

 

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RR

Rate – The amount of interest on a loan or deposit, expressed as an interest rate or annual percentage rate (APR) of the principal

Rate of Return – The money you receive for having an account, divided by the amount of money you started with, resulting in how much your money has grown, expressed as a percentage.  The rate of profit on an investment, calculated as the current value minus the value at time of purchase divided by the value at time of purchase. For example, a $1000 CD worth $1100 after one year has a 10% rate of return

Real Estate – Land, including any buildings or other structures on it, such as a house

Real Estate Investment Trust (REIT) – A “mutual fund” for real estate.  REITs are a pool of investors who buy large properties like shopping centers usually for income

Recession - Technically, it's two consecutive quarters of decline in the Gross National Product. A downturn in the economy signaled by a decline in demand for goods and services, a rise in unemployment and a slow down in the flow of money 

References - In job hunting, a list of names and addresses of several people who will vouch for the job applicant's character and skills

Refinance – To take out a new loan on property to replace a previous loan on the same property, typically to take advantage of lower interest rates

Rent – A regular payment (typically monthly) made by a tenant to a landlord for use of property

Repeat Business – Customers who return to buy more from a company

Replacement Value – Insurance term that refers to the cost of replacing an item if you had to go out and buy it now

Repossess - To take back property from a borrower by a lender because the borrower defaulted on the loan

Residual Value – The amount a car is worth at the end of a car lease

Residuary Estate – Relating to wills, a legal term that means everything that’s left after your expenses and debts have been paid

Resume – An organized summary of a job applicant's education, job history, skills and references

Retirement – When a person withdraws by choice from their business, occupation, or active work force 

Return on Investment (ROI) – Profit made on an investment or asset; ROI is a calculation of the amount, or percentage, that you have earned (or lost) on an investment you have made. Returns may be positive (meaning you earned money) or negative (meaning you lost money). 

Revenue – Payment for goods or services sold in a period of time; amount of income before any deductions are made

Revolving Debt - A credit arrangement, as with a credit card, that allows you to borrow against a pre-approved line of credit when purchasing goods and services

Risk - The chance of your losing money; the chance of loss or the amount of possible loss to an insurance company

Risk and Return Triangle – An illustration of low risk investments on the bottom building to high risk ones at the top

Roth IRA – A type of Individual Retirement Arrangement in which a person can save for retirement and receive tax benefits.  Differs from a traditional IRA in that contributions are non-deductible but there are no taxes on earnings or retirement withdrawals

Rule of 72 – A quick but only approximate way to figure out how long it takes an investment to double in years by dividing 72 by the interest rate. For example, $100 at 4% interest will double to $200 in 18 years, just as 72 divided by 4 equals 18

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SS

S&P 500 – The index of 500 large cap U.S. stocks, widely used as a benchmark for mutual funds to compare their investment returns

Salary – A fixed amount of money paid regularly for work performed

Savings – Any money that is not spent but put aside for later use  

Savings & Loan Association - Financial institution with a state or federal charter that handles deposits, funds mortgages and pays dividends.   See Thrift

Savings Account - A deposit account at a credit union, bank or thrift used to accumulate funds and earn interest 

Savings Bank - A depository institution that mostly deals in individuals' savings accounts (not business) and uses them to fund home mortgages. See Thrift

Scholarship - A form of financial aid given to undergraduate students to help pay for their education. Most scholarships are restricted to paying all or part of tuition expenses, though some scholarships also cover room and board. Scholarships do not have to be repaid. Many scholarships are restricted to students in specific courses of study or with academic, athletic or artistic talent

Secret Service - Branch of government that goes after counterfeiters

Sector Funds - A mutual fund with its money invested in one part or sector of the economy, such as oil companies or high tech companies

Secured Credit Card - A credit card used like a regular card but backed by money set aside by the card holder in a credit union or bank account instead of a line of credit from the financial institution

Secured Debt - One that is backed up by an asset that the lender can take if the borrower defaults on the loan

Securities - Investment documents issued by a government, corporation, or other organization as proof of debt or equity; the general name for stocks, bonds and other investments 

Senate - The upper house of the U.S. Congress, to which two members are elected from each state by popular vote for a six-year term

Service – Work or labor that does not produce a product; examples include work done by lawyers, doctors, waiters

Service Economy – An economy dominated by service jobs

Share – A share of stock or ownership in a publicly traded company

Share Certificate– Similar to a CD; a specified amount of money deposited for a pre-determined length of time. In exchange for agreeing to leave your money on deposit for this set time-period, you may earn a higher yield than on a regular savings account

Shareholder – A person who owns shares in a corporation or mutual fund 

Simple Interest – The interest computed on a principal amount, as opposed to compound interest

Single Life Annuity - An annuity set up so that only one person benefits.  If he dies, the remaining money goes to the insurance company

Small Business Administration (SBA) - Federal agency that loans money to small businesses

Small Cap Stock – The stock of a company whose market value is less than $1 billion; often small cap stocks represent companies that are not as well-established but in many cases are faster growing than med- and large-cap stocks

Social Security Number - A number assigned to every worker in the United States so he can pay taxes into the Social Security System

Social Security System - A government program that pays monthly retirement money, disability and other payments to any worker who has paid Social Security taxes for ten years

Social Security Tax – A federal tax paid by both employers and employees for the government's Social Security programs which provide benefits for retired workers and their dependents as well as for the disabled and their dependents; also known as FICA

Speculator - Anyone who buys risky investments that may make big profits or have big losses

Stafford Loans – Federal loans that come in two forms, subsidized and unsubsidized. Subsidized loans are based on need; unsubsidized loans aren't. The interest on the subsidized Stafford Loan is paid by the federal government while the student is in school and during the 6 month grace period. 

Start-up Expenses – The expenses incurred by a business to begin operation

Statement – A written record of activity of a savings or checking account sent to its holder by a credit union or banking institution

Statement Savings Accounts - The person holding the account receives a monthly statement from the credit union or bank with a record of every deposit and withdrawal

Stock - Part ownership of a company's earnings and assets. If a company has 1000 shares of stock outstanding and someone owns 50 of them, then that person owns 5% of the company

Stockholder - A person who owns stock (or shares) in a publicly traded company or mutual fund

Stock Exchanges - The place where securities are actually bought and sold, such as the New York Stock Exchange (NYSE)

Stock Funds - A mutual fund with money invested in stocks

Stock Market - Place where shares of many different companies are bought and sold

Stock Options – The right to buy or sell a stock at a specific price at a specific time

Stock Split – An increase in the number of shares in a company without increasing the value.  The most common split is two-for-one; for example, when two $20 shares become four $10 shares.  Companies often authorize a split to make ownership more affordable to a broader base of investors

Stop Payment Order – To order a credit union or bank not to pay a check you've written

Student Aid Report (SAR) – Report that summarizes the information included in the FAFSA and must be provided to your school's financial aid office. The SAR will also indicate the amount of Pell Grant eligibility, if any, and the Expected Family Contribution. 

Supply and Demand – An economic principle that the less common something is, the more it is desired and the higher the price.  The reverse also holds whereby the more common something is, the less that people want it and the lower the price

Surrender Period – In an annuity, the length of time that must pass before a person can take money from his annuity without paying a penalty

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TT

Tax – A payment to Federal, State or local governments based on a person's income, property or the sales price of a product

Tax Deduction – Any expense that a tax payer is legally allowed to deduct (subtract) from his/her gross income to determine taxable income  

Tax Deferred Investment - An investment that legally postpones taxes on its profits until sometime in the future

Tax-exempt - Not required to pay taxes

Tax Sheltered Annuity - A contract with an insurance company that provides the insured an annuity arrangement with taxes deferred until a certain age or the insured's retirement; often a 403(b) plan

Term Life Insurance - Insurance that provides a death benefit for a specific period of time, typically one or more years, but only if you die during the term.  This type of life insurance has no cash or loan value

Thrift - A depositary institution mostly for individuals' savings. Savings and loan associations and savings banks are thrifts

Ticker Symbol – Usually a 1-4 letter abbreviation for a company name that is used to identify the company for stock trading purposes

Tiered Interest Rate – As defined in a credit card agreement, the interest rate charged on your account varies based on the tiers or levels of balance amounts

Time Value of Money – The idea that money today is worth more than money tomorrow because it can earn interest

Title Insurance – A kind of insurance paid for by the buyer of real estate to insure that if he pays for a mortgage he will actually receive legal title to the property

Total Tax Burden – The sum of all taxes a person pays to federal, state and local governments

Traditional IRA – An account set up by an individual to provide retirement income.  Contributions to a traditional IRA can be deducted from income and earnings on contributions accumulate tax-deferred until retirement.

Transaction Fees – An amount charged by a creditor for late payments, cash advances, or going over your credit limit

Traveler's Checks - A special kind of check that can be used as cash but protects a traveler against theft or loss

Treasury Bill (T-Bill) - Bond to the U.S. Treasury that matures in less than one year (typically three, six or nine months) sold in denominations of $10,000-$1million through competitive bidding at auctions.  T-Bills are the most popular of all Treasury securities and a main instrument in Federal Reserve monetary policy

Treasury Bond (T-Bond) – Bond to the U.S. Treasury that matures in more than 10 years.  The Treasury Department hasn't offered a T-Bond since its decision in October 2001 to suspend issuance of the 30-year bond

Treasury Note (T-Note) – U.S. bond that matures in two to five years

Treasury Securities – U.S. government bonds, including savings bonds, T-bills, T-bonds and T-Notes

Trust – An entity that holds assets for its beneficiaries with an agent (trustee) managing and operating the trust according to the terms given by the person or entity who created it

Trustee – The person or entity (often a financial institution) that holds the assets of a trust and manages the trust for its beneficiaries under the terms of the person who created the trust

Tuition - The amount charged by a school, college or university for class instruction and facilities

Turnkey Business - A business that is ready for immediate operation after you buy it

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UU

Underinsured Motorist (UIM) - A type of automobile insurance that pays for damages inflicted by another motorist, including hit-and-run, who does not carry enough insurance to cover the loss.  Assumes underinsured motorist is at fault

Unemployed – Those who are currently not working but who are seeking jobs

Unemployment - The total amount of people out of work at any given time

Uninsured Motorist (UM) - A type of automobile insurance that pays for damages inflicted by another motorist, including hit-and-run, who does not carry any insurance to cover the loss.  Assumes uninsured motorist is at fault

Urn - A container which holds the cremated remains of a dead person

U.S. Bureau of Engraving and Printing - Agency located in Washington D.C. whose job it is to print paper money

U.S. Mint - A place where American coins are made to exact legal specifications

U.S. Savings Bonds - A bond from the U.S. government in eight denominations starting at $25 up to $10,000 with semiannual interest

U.S. Treasury – The Department of the Treasury is organized into two major components:  the department offices and operating bureaus.  The departmental offices are primarily responsible for the formulation of policy and management, while the operating bureaus carry out specific operations such as managing Federal finances, collecting taxes, producing postage stamps, currency and coins, enforcing Federal finance and tax laws, investigating and prosecuting tax evaders, counterfeiters and forgers

Unsecured Debt - A loan that is not backed up with collateral

Usury Laws - Laws that limit the amount of interest or money a financial institution can charge on a loan

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VV

Value -  The amount of money (or goods and services) perceived to be equivalent to something else; the determination of how much something is worth

Variable Expenses -  Expenses that change from month to month

Variable Rate Annuity – An annuity in which the insurance company guarantees a minimum rate of payments for a certain time but the rest of the payments can vary according to how much money was made on the investments

Variable Rate CD – A certificate of deposit with an interest rate that can change

Variable Rate Credit Cards – Credit cards whose interest rate changes, based on another interest rate, such as the prime rate or the Treasury bill rate

Vendor – Someone who sells; someone who exchanges goods or services for money

Venture Capital – Money raised by small companies for growth

Vesting – A Federal law that says employees are entitled to their pension funds, 401(k) funds and other retirement benefits after a certain length of time, even if they no longer work for that employer

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WW

Wage – A payment for work, sometimes based on hours rather than duties (as with a salary)

Wall Street Journal Index - The Wall Street Journal publishes the prime rate which is commonly used by credit card issuers to adjust rates on variable rate credit cards.  If the index goes up, the rate on the credit card goes up, and when the prime rate drops, so does the rate on variable rate credit cards

Want - Something that you would like to have is not a necessity

Whole Life Insurance -  A policy that pays a death benefit if the holder dies but also becomes an investment account with cash value that the holder can redeem or borrow against

Will -  A legal document that expresses a person's wishes for the disposal of his/her property after death

Withdrawal – Taking funds out of an account

Withholding Tax – Money taken out of a paycheck by an employer and sent to a taxing authority, such as the federal, state or local government

WSJ Prime Rate – The Wall Street Journal surveys large banks' prime rates and publishes the consensus.  This rate is the most widely quoted measure of the prime rate (the rate at which banks lend to their most-favored customers).  It moves in relation to the changes by the Fed, and is used by banks to set rates on credit card and auto loans

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XX

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YY

Yield - The return or profit on an investment; with bonds, yield is the coupon payment divided by the bond's face value if held to maturity.  

Yuan - Unit of money in China

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ZZ

Zero Coupon Bond – A bond in which no periodic interest payments are paid over the life of its contract. Issued at a discount, both principal and interest are paid at maturity

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