Personal Finance & Money Management Financial Terms & Definitions

26 terms in this topic

This category encompasses the core principles of managing one’s personal finances, including budgeting, saving, debt management, investing, and retirement planning. It provides definitions for key terms like compound interest, credit score, and asset allocation to help individuals make informed financial decisions.

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50/30/20 rule

The 50/30/20 rule is a simple and popular budgeting framework that helps individuals manage their after-tax income by dividing it…

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B

Budget

A budget is a detailed financial plan that estimates your income and expenses over a specific period, typically monthly or…

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C

Cash flow

Cash flow is the movement of money into and out of a person’s or business’s accounts over a specific period.…

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D

Direct deposit

Direct deposit is an electronic payment method that transfers funds directly from a payer’s bank account into the recipient’s account…

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E

Emergency fund

An emergency fund is a dedicated savings account specifically set aside to cover unexpected financial surprises or life events. Think…

Full Definition
F

Financial literacy

Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing.…

Full Definition
50/30/20 rule The 50/30/20 rule is a simple and popular budgeting framework that helps individuals manage their after-tax income by… Budget A budget is a detailed financial plan that estimates your income and expenses over a specific period, typically… Cash flow Cash flow is the movement of money into and out of a person’s or business’s accounts over a… Certificate of deposit (CD) A Certificate of Deposit (CD) is a time deposit offered by banks, credit unions, and other depository institutions… Checking account A checking account is a type of deposit account held at a financial institution, such as a commercial… Cost of living The cost of living is the amount of money needed to sustain a certain level of expenses, including… Direct deposit Direct deposit is an electronic payment method that transfers funds directly from a payer’s bank account into the… Discretionary spending Discretionary spending refers to the money you spend on things you want but don’t necessarily need. It is… Disposable income Disposable income, also known as disposable personal income (DPI), is the amount of money an individual or household… Emergency fund An emergency fund is a dedicated savings account specifically set aside to cover unexpected financial surprises or life… Financial goal setting Financial goal setting is the process of defining clear, specific objectives for your money, creating a plan to… Financial literacy Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting,…