Money glossary

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• 401(k) planA 401(k) plan is a United States employer-sponsored retirement plan that lets employees direct part of their pay into an individual account.
• 403(b) planA 403(b) plan, also called a tax-sheltered annuity plan, is a United States retirement plan for employees of public schools and certain tax-exempt organizations.

A

• Adjustable-rate mortgageAn adjustable-rate mortgage (ARM) is a home loan whose interest rate can change over time.
• Adjusted gross income (AGI)Adjusted gross income is total income from all sources minus certain adjustments listed on Schedule 1 of the U.S.
• Affinity fraudAffinity fraud is investment fraud aimed at members of an identifiable group, such as a religious, ethnic, or professional community.
• AmortizationAmortization is the process of paying off a loan through regular payments over time so that the amount owed decreases with each payment.
• AnchoringAnchoring is a cognitive bias in which an initial number or piece of information, the anchor, pulls later estimates toward it.
• Annual percentage rate (APR)The annual percentage rate, or APR, is the yearly cost of borrowing expressed as a percentage.
• Annual percentage yield (APY)Annual percentage yield is a standardized figure showing the total interest an account pays over a year, taking into account how often interest is compounded.
• Annualized returnAn annualized return restates an investment's gain over any holding period as an equivalent yearly rate.
• AnnuityAn annuity is a series of payments made at regular intervals under a contract, over a period of more than one year.
• AssetAn asset is anything of value that a household owns, including financial holdings such as bank balances, investments, and retirement accounts, and nonfinancial items such as a home, vehicles, or business equity.
• Asset allocationAsset allocation is the way an investment portfolio is divided among broad categories such as stocks, bonds, and cash.
• Auto title loanAn auto title loan is a small, high-cost loan in which the borrower uses a vehicle as collateral and the lender holds the title until the loan is repaid.
• Automatic paymentAn automatic payment is an arrangement in which a person authorizes a company to withdraw money from a bank account on a recurring basis.
• Automatic savingsAutomatic savings is a setup in which money moves from a checking account to a savings account on a chosen schedule without a manual transfer each time.

B

• Balance transferA balance transfer moves an outstanding balance from one credit card to another, sometimes for a fee.
• BankA bank is a financial institution and business that accepts deposits, makes loans and handles other financial transactions.
• BarterBarter is the direct exchange of one good or service for another without using money.
• Base periodA base period is the point in time used as the reference for comparing other periods.
• BasisBasis is generally the amount paid for an asset, and it is the reference point for measuring tax gain or loss when the asset is later sold.
• BlockchainA blockchain is an electronic distributed ledger kept by many participants in a network of computers rather than by a single administrator.
• Break-even pointThe break-even point is the level of sales at which a business's total revenue equals its total costs, so it records neither a profit nor a loss.
• Brokerage accountA brokerage account is an account with a licensed firm that lets a person buy and sell investments such as stocks, bonds, and funds.
• BudgetA budget is a plan that sets out the income a person expects over a period and how it will be spent or set aside.
• Business bank accountA business bank account is an account used only for a business's income and spending, kept apart from the owner's personal money.
• Business line of creditA business line of credit is a flexible form of borrowing that lets a company draw funds up to a set limit as needed and pay interest only on the amount in use.
• Business recordkeepingBusiness recordkeeping is the practice of systematically tracking a business's income, expenses, and assets, along with the documents that support each entry.
• Buy now, pay laterBuy now, pay later, or BNPL, is point-of-sale credit that lets a shopper split a retail purchase into a few scheduled payments.
• Buy-and-hold strategyA buy-and-hold strategy is an approach in which an investor keeps investments for a long period instead of trading in response to price movements.

C

• Capital appreciationCapital appreciation is the increase in the market price of an asset above what was paid for it.
• Capital gain and capital lossA capital gain or loss arises when a capital asset is sold.
• Cash accountA cash account is a type of brokerage account in which each purchase must be paid for in full with the customer's own money.
• Cash flowCash flow is the timing of when money comes in as income and when it goes out as spending.
• Catastrophic health planA catastrophic health plan is a type of health insurance with lower monthly premiums and a high deductible, meant to cover major medical events.
• Catch-up contributionA catch-up contribution is an extra amount that people aged 50 or older may add to certain retirement accounts beyond the usual annual limit.
• CD ladderA CD ladder is an arrangement in which a sum placed in certificates of deposit is divided among several CDs that mature on different dates.
• Central bankA central bank is the public institution that manages a country’s currency, money supply and interest rates.
• Certificate of deposit (CD)A certificate of deposit is a savings product offered by banks and credit unions in which money stays on deposit for a stated term.
• Checking accountA checking account is a deposit account at a bank, or a share draft account at a credit union, built for frequent use.
• Closing costsClosing costs, also called settlement costs, are the upfront charges due to obtain a mortgage and transfer ownership of a property.
• Co-signerA co-signer is a person, often a relative or friend, who adds their own income and credit record to someone else's loan application.
• Coerced debtCoerced debt is debt a person takes on because of threats, force, or manipulation by someone else, often an abusive partner or family member.
• CoinsuranceCoinsurance is the percentage of the cost of a covered health care service that the patient pays after meeting the plan's deductible.
• CollateralCollateral is an asset that secures a loan, which the lender may take if the borrower does not repay.
• CollectibleIn U.S.
• CommodityA commodity is a basic good that is interchangeable with others of its kind, such as wheat, gold, oil and cattle.
• Community propertyCommunity property is a legal system in which most assets and debts acquired during a marriage belong equally to both spouses.
• Compound interestCompound interest is interest that is calculated on both the original amount deposited and the interest that has already been credited to it.
• Constant dollarsConstant dollars, also called real dollars, are dollar amounts adjusted to remove the effect of price changes over time.
• Consumer price index (CPI)The consumer price index, or CPI, is a measure of the average change over time in the prices consumers pay for a representative basket of goods and services.
• Consumer reporting companyA consumer reporting company, often called a credit bureau, is an organization that collects information about individuals and sells it to businesses in the form of reports and scores.
• Contribution limitA contribution limit is the maximum amount that may be put into a particular retirement account in a year.
• Cooling-off periodA cooling-off period is a set window after a purchase during which the buyer may cancel without giving a reason.
• Coupon rateA coupon rate is the annual interest rate stated on a bond when it is issued, and it stays the same for the bond's life.
• Credit counselingCredit counseling is a service, usually offered by nonprofit organizations, that advises people on managing their money and debts.
• Credit freezeA credit freeze, also called a security freeze, is a free tool that restricts access to a person's credit report so that new credit accounts generally cannot be opened in that name.
• Credit limitA credit limit is the cap a card issuer sets on how much can be charged to the card it issued.
• Credit reportA credit report is a statement of a person’s credit activity and current credit situation, including loan payment history and the status of credit accounts.
• Credit scoreA credit score is a number produced by a scoring model from the information in a person’s credit reports, intended to predict how likely that person is to repay a loan on time.
• Credit unionA credit union is a not-for-profit financial institution that accepts deposits, makes loans and offers other financial services, and that is owned and controlled by its members.
• Crypto assetA crypto asset is any asset that is issued or transferred using distributed ledger or blockchain technology.

D

• Dark patternA dark pattern is a design choice in a website or app that steers or pressures people into actions they did not intend.
• Debit cardA debit card is a payment card issued by a bank and linked to a checking or savings account.
• Debt collectorA debt collector is a person or company that regularly collects debts owed to someone else, usually after those debts are past due.
• Debt consolidationDebt consolidation rolls several debts, such as credit card balances or loan payments, into one new loan with a single monthly payment.
• Debt settlementDebt settlement is an arrangement in which a creditor agrees to accept less than the full amount owed.
• Debt-to-income ratioThe debt-to-income ratio (DTI) is a percentage found by dividing a person's total monthly debt payments by their gross monthly income.
• DeductibleA deductible is the amount a person pays for covered health care services before the insurance plan begins to pay its share.
• Deferred interestDeferred interest is a credit card promotion that advertises no interest if a purchase is paid in full by the end of a set period.
• Defined benefit planA defined benefit plan, commonly called a traditional pension, is a retirement plan that promises a specified benefit based on a fixed formula.
• Defined contribution planA defined contribution plan is a retirement plan in which each participant has an individual account.
• Delayed retirement creditA delayed retirement credit is an increase added to a Social Security retirement benefit for each month a person waits to claim after full retirement age, up to age 70.
• Deposit insuranceDeposit insurance is a government guarantee that protects money held in eligible accounts if the institution fails.
• DepreciationDepreciation is the recovery of a property's cost over a number of years through annual deductions, rather than all at once.
• Direct depositDirect deposit is money sent electronically straight into a bank account, credit union account or prepaid card.
• Discretionary spendingDiscretionary spending is money used for things a person chooses to buy rather than must pay for, such as dining out or entertainment.
• DividendA dividend is a payment a company makes to its shareholders out of its profits.
• Dollar-cost averagingDollar-cost averaging is a method of investing equal portions of money at regular intervals, regardless of what markets are doing.

E

• Early distribution taxThe early distribution tax is a 10 percent additional federal tax in the United States on certain withdrawals from retirement plans taken before age 59 and a half.
• Early withdrawal penaltyAn early withdrawal penalty is a fee a bank charges when a customer takes money out of a certificate of deposit before its term ends.
• Earned incomeEarned income is money received in exchange for work, including wages, salaries, tips, and other taxable employee pay.
• Elective deferralAn elective deferral is a portion of pay that an employee chooses to direct into a workplace retirement plan instead of receiving it as wages.
• Emergency fundAn emergency fund is a cash reserve set aside specifically for unplanned expenses or financial emergencies.
• Employer Identification Number (EIN)An Employer Identification Number (EIN) is a federal tax identification number the Internal Revenue Service assigns to businesses, estates, trusts, and other entities.
• Employer matching contributionAn employer matching contribution is money an employer adds to a worker's retirement account in response to the worker's own contributions from salary.
• Employment taxesEmployment taxes are the federal taxes tied to paying workers, covering income tax withholding, Social Security tax, Medicare tax, and federal unemployment tax.
• Escrow accountAn escrow account, called an impound account in some places, is an account a mortgage servicer holds to pay property-related bills on a homeowner's behalf.
• Essential expenseAn essential expense is a cost a household must cover to meet basic needs, such as housing, food, clothing, and insurance.
• Estimated taxEstimated tax is the system of paying income tax in installments during the year on income that has no tax withheld, such as self-employment earnings, interest, dividends and capital gains.
• Exchange-traded fund (ETF)An exchange-traded fund is a pooled investment fund whose shares are listed on an exchange and trade throughout the day at changing prices, much like a stock.
• Excluded servicesExcluded services are health care services that a health insurance plan does not pay for or cover.
• Expense ratioAn expense ratio is the percentage of a fund's total assets that goes each year to cover its operating costs, such as management and administration.

F

• Failure-to-pay penaltyA failure-to-pay penalty is a charge added when tax owed is not paid by the due date.
• Fake check scamA fake check scam is a fraud in which a stranger sends a counterfeit or stolen check and asks the recipient to deposit it and send part of the money elsewhere.
• Federal funds rateThe federal funds rate is the interest rate at which banks and other depository institutions lend reserve balances to one another overnight.
• Federal Insurance Contributions Act (FICA) taxFICA tax is the U.S.
• Fiat moneyFiat money is currency that has value because a government declares it to be money, not because it is made of or redeemable for a commodity such as gold.
• Filing extensionA filing extension gives a taxpayer extra time to submit a return without a late-filing penalty.
• Filing statusFiling status is a yearly category that a U.S.
• Finance chargeA finance charge is the cost of consumer credit expressed as a dollar amount.
• Financial capabilityFinancial capability is the combination of knowledge, skills and habits that helps a person manage money well over a lifetime.
• Financial educationFinancial education is instruction that helps people build the knowledge, skills, and confidence to handle money and banking.
• Financial goalA financial goal is the money side of something a person wants to achieve in life.
• Financial inclusionFinancial inclusion means that individuals and businesses have access to affordable financial products such as payments, savings, credit and insurance.
• Financial literacyFinancial literacy is the knowledge and skills a person needs to make informed decisions about money.
• Financial well-beingFinancial well-being is a measure of how well a person's current money situation provides financial security and freedom of choice, both today and in the future.
• Fixed annuityA fixed annuity is a contract with an insurance company in which the insurer guarantees both the interest rate credited and the payout.
• Fixed expensesFixed expenses are bills that must be paid each month and generally cost the same amount each time.
• ForfeitureA forfeiture is the part of employer contributions that a worker loses by leaving a job before those contributions have vested.
• Form 1040Form 1040 is the main document U.S.
• Form W-2Form W-2, the Wage and Tax Statement, is the U.S.
• Form W-4Form W-4, the Employee's Withholding Certificate, is the U.S.
• Full retirement ageFull retirement age is the age at which a United States worker can claim a Social Security retirement benefit with no reduction for claiming early.
• Futures contractA futures contract is a derivative in which one party agrees to buy or sell a specific quantity of a physical commodity at a set price on a particular future date.

G

• Gift taxGift tax is a U.S.
• Glide pathA glide path is the planned schedule by which a target-date fund changes its investment mix over time.
• Grace periodA grace period is the stretch between the end of a billing cycle and the date a payment is due.
• Gross domestic product (GDP)Gross domestic product, or GDP, is the total market value of the final goods and services produced within a country during a given period.
• Gross incomeGross income is the total pay a person earns before taxes and other deductions are subtracted.
• Gross profit marginGross profit margin is gross profit divided by net sales, expressed as a percentage.
• Gross receiptsGross receipts are the total income a business receives from its activities before any expenses are subtracted.
• Guaranteed asset protection (GAP) insuranceGuaranteed asset protection, or GAP, is an optional product meant to cover the difference between what is owed on an auto loan and what an insurer pays after a vehicle is stolen or totaled.

H

• Health care sharing ministryA health care sharing ministry is a membership organization whose participants, who usually share religious or ethical beliefs, contribute monthly amounts that are used to pay other members' medical bills.
• HobbyFor tax purposes, a hobby is an activity a person pursues mainly for enjoyment or recreation, not to make a profit.
• Home equityHome equity is the part of a property the owner actually owns, calculated as its current market value minus the balance of any mortgage or other debt secured by it.
• Homeowners insuranceHomeowners insurance is a package policy that combines coverage for a dwelling and personal property with personal liability protection.
• HyperinflationHyperinflation is an extreme, runaway rise in prices that quickly destroys the value of a currency.

I

• Identity theftIdentity theft occurs when someone uses another person's personal or financial information without permission.
• Impersonation scamAn impersonation scam is a fraud in which a caller or sender pretends to be a trusted organization, often a government agency, to pressure a person into paying or sharing private details.
• IncomeIncome is money earned or received, including wages or salaries, tips, commissions, contracted pay, government transfer payments, investment dividends, tax refunds, gifts and inheritances.
• Independent contractorAn independent contractor is a self-employed person who offers services to the public and controls how the work is done, while the client controls only the result.
• InflationInflation is a sustained rise in the general level of prices over time, so each unit of money buys fewer goods and services.
• Inflation riskInflation risk is the chance that an investment fails to earn enough over time to keep up with rising prices.
• Installment loanAn installment loan is a closed-end loan in which the lender provides the full amount at the start and the borrower repays it in fixed amounts over a set period.
• Irregular incomeIrregular income is money that arrives at unpredictable times or in varying amounts, as with seasonal work, commissions, or one-time payments.
• Itemized deductionItemized deductions are specific, documented expenses that a U.S.

J

• Joint accountA joint account is a bank deposit account owned by two or more people.

L

• LeaseA lease is a written contract between a property owner and a tenant that sets out the terms for living in a rental unit.
• Legal tenderLegal tender is money that a government requires to be accepted as valid payment for debts.
• LiabilityA liability is an amount owed to someone else, such as a mortgage, a car loan, or a credit card balance.
• Liability insuranceLiability insurance is coverage that protects the policyholder against legal responsibility for injury to other people or damage to their property.
• Limited liability company (LLC)A limited liability company (LLC) is a business structure, created under state law, that combines features of a corporation and a partnership.
• Loan termA loan term is the length of time over which a loan is to be repaid, usually stated in months or years.
• Loan-to-value ratioA loan-to-value ratio, or LTV, compares the amount of a loan with the value of the asset that secures it.
• Long-term careLong-term care is a range of services that help people with daily activities when illness, disability, or a cognitive condition keeps them from managing alone.
• Loss aversionLoss aversion is a pattern in behavioral economics in which people weigh potential losses more heavily than gains of the same size.
• Lump sumA lump sum is a single, one-time payment received all at once rather than in a series of smaller installments.

M

• Margin accountA margin account is a brokerage account that lets a customer borrow money from the firm to buy securities.
• Marginal tax rateThe marginal tax rate is the rate applied to the last layer of a person's income, meaning the rate on the next unit earned.
• Market riskMarket risk is the possibility that an investment's value rises or falls because of conditions in the broader market rather than anything specific to the holding.
• Market timingMarket timing is an active strategy of moving money in and out of the market, or between investments, to profit from expected short-term price changes.
• Maturity dateA bond's maturity date is the day the issuer must repay the face value, also called par value, and make its last interest payment.
• MedicaidMedicaid is a joint federal and state insurance program that provides free or low-cost health coverage to some people with low incomes, including families, children, pregnant women, older adults, and people with disabilities.
• MedicareMedicare is the federal health insurance program in the United States for people aged 65 and older and for certain younger people with disabilities.
• Medium of exchangeA medium of exchange is anything that buyers and sellers widely accept in payment for goods and services.
• Mental accountingMental accounting is the habit of sorting money into separate mental categories, such as rent, food, fun, or savings, and treating each category as its own budget.
• Minimum paymentA minimum payment is the smallest amount that must be paid each month on a loan, line of credit or other debt to keep the account in good standing.
• Monetary policyMonetary policy is the set of actions a central bank takes to influence overall demand in the economy, mainly by adjusting interest rates and credit conditions.
• Money market deposit accountA money market deposit account is a federally insured account at a bank or credit union that generally pays more than an ordinary savings account.
• Mortgage preapprovalA mortgage preapproval is a letter from a lender stating that it is generally willing to lend a buyer up to a certain amount, based on stated assumptions.
• Multi-factor authenticationMulti-factor authentication is a login method that requires two or more separate proofs of identity before an account opens, instead of a password alone.
• Mutual fundA mutual fund is a pooled investment vehicle that gives shareholders a stake in a diversified portfolio managed by professionals.

N

• NeedsNeeds are the basic things people must have to survive, such as food, clothing and shelter.
• Negative amortizationNegative amortization occurs when a loan payment is too small to cover the interest due, so the unpaid interest is added to the balance and the amount owed grows.
• Negative equityNegative equity exists when a person owes more on a loan than the financed item is currently worth.
• Net incomeNet income is the money a person actually receives in a paycheck after taxes and other deductions are taken out.
• Net payNet pay is the amount of a paycheck that remains after taxes and other deductions are taken from gross pay.
• Net worthNet worth is the difference between the total value of what a household owns and the total of what it owes.
• Nominal incomeNominal income is the amount of money a person earns in current dollars, with no adjustment for changing prices.

O

• One-participant 401(k)A one-participant 401(k), often called a solo 401(k), is a traditional 401(k) covering a business owner who has no employees other than possibly a spouse.
• Opportunity costOpportunity cost is the value of the next best alternative given up when a choice is made.
• Origination feeAn origination fee is a charge a lender makes to the borrower for making the loan.
• Out-of-pocket maximumAn out-of-pocket maximum is the most a person must pay for covered services in a plan year.
• OverdraftAn overdraft happens when an account lacks enough money to cover a transaction but the bank pays it anyway.

P

• Pass-through deposit insurancePass-through deposit insurance is federal coverage that can extend to funds a customer holds through a third party, such as a payment company that keeps pooled money at a partner bank.
• Passive activity incomePassive activity income is revenue from a business in which the taxpayer does not materially participate, or from rental activity.
• Pay periodA pay period is the span of time for which an employer calculates and pays wages.
• Payable-on-death accountA payable-on-death account is a bank account that passes directly to one or more named beneficiaries when the owner dies, without a written trust agreement.
• Payday loanA payday loan is a short-term, high-cost loan for a small amount that is typically due on the borrower's next payday.
• Payment appA payment app is a software service that lets people store money, send it to others and pay merchants from a phone.
• Percent changePercent change expresses how much a quantity has risen or fallen relative to where it started.
• Periodic statementA periodic statement is a record that a bank or credit union issues for a deposit account at regular intervals, listing activity over a stated statement period.
• PhishingPhishing is a type of fraud in which a scammer sends a message that looks like it comes from a trusted company or person in order to steal personal or financial information.
• Ponzi schemeA Ponzi scheme is an investment fraud in which supposed returns paid to earlier investors come from money contributed by newer investors rather than from real earnings.
• Power of attorneyA power of attorney is a legal document that lets another person, called an agent or attorney-in-fact, act on someone's behalf, often for money and property decisions.
• Predatory lendingPredatory lending is a set of abusive practices in which a lender profits through unfair terms or deception.
• PremiumA premium is the amount paid to an insurer, usually every month, to keep an insurance policy active.
• Prepaid cardA prepaid card is a card on which money is loaded in advance, so spending is limited to the amount already added.
• Present biasPresent bias is the tendency to give extra weight to rewards and costs that arrive soon compared with those that arrive later.
• PrincipalPrincipal is the amount of money originally received from a lender that the borrower agreed to pay back, not counting interest.
• Private keyA private key is a secret sequence of characters that controls access to crypto assets on a blockchain.
• Private mortgage insurancePrivate mortgage insurance (PMI) is insurance that lenders may require on a conventional loan when the down payment is below 20 percent of the purchase price.
• ProbateProbate is the court-supervised process of settling a person's estate after death.
• Purchasing powerPurchasing power is the quantity of goods and services a given amount of money can buy.
• Pyramid schemeA pyramid scheme is a business model in which participants earn money mainly by recruiting other people, not by selling products or services to real customers.

R

• Real estate investment trust (REIT)A real estate investment trust is a company that owns or finances income-producing real estate.
• Real incomeReal income is a person's nominal income adjusted for inflation, so that it reflects how many goods and services the money can buy.
• Real interest rateA real interest rate is the nominal rate, the stated rate on a loan or deposit, adjusted for inflation.
• RebalancingRebalancing is the act of returning a portfolio to its intended asset allocation after market movements have pushed it off target.
• RecessionA recession is a significant decline in economic activity that is spread across the economy and lasts more than a few months.
• RefinancingRefinancing is taking out a new loan to pay off and replace an existing one.
• Refund allocation (Form 8888)Form 8888 is the Internal Revenue Service form that lets a U.S.
• RemittanceA remittance is money that a migrant worker sends to family or a community in another country, usually the country they came from.
• Remittance transferA remittance transfer, also called an international money transfer, is an electronic transfer of money to a person in another country through a provider covered by U.S.
• Rent-to-own agreementA rent-to-own agreement is a contract that lets a person take home an item, such as furniture, electronics, or sometimes a house, in return for regular weekly or monthly payments, with the option to own it once all payments are made.
• Rental incomeRental income is cash, or the fair market value of property or services, received in exchange for the use of real estate or other property.
• Renters insuranceRenters insurance is a policy that covers a tenant's personal belongings inside a rented home and does not cover the building structure itself.
• Required minimum distributionA required minimum distribution, or RMD, is the smallest amount a United States account owner must withdraw each year once reaching a set age, currently 73.
• Reserve requirementA reserve requirement is a rule setting the minimum amount of reserves a depository institution must hold against certain deposits.
• Revolving creditRevolving credit is an arrangement that lets a consumer borrow up to a set limit, repay, and borrow again.
• Risk poolingRisk pooling is the practice of combining the losses of a group so that every member shares them, and it is the basic mechanism behind insurance.
• Risk toleranceRisk tolerance is the amount of investment risk a person is both willing and able to accept in pursuit of a financial goal.
• Risk-return tradeoffThe risk-return tradeoff is the principle that investments with a higher potential reward generally carry a greater chance of loss.
• RolloverA rollover is a transfer of money from one retirement plan or IRA into another.
• Romance scamA romance scam is a fraud in which someone builds a false relationship with a victim, usually through a fake online dating profile, and then asks for money.
• Roth conversionA Roth conversion is a move of money from a traditional IRA, or another pre-tax retirement account, into a Roth IRA.
• Roth IRAA Roth IRA is a United States individual retirement account that follows most traditional IRA rules but treats taxes the opposite way.
• Round-up savingsRound-up savings is a feature that rounds each card purchase up to the next whole currency unit and moves the difference into a savings account.
• Rule of 72The Rule of 72 is a rough shortcut for estimating how long an investment takes to double.

S

• Savings accountA savings account is a deposit account at a bank, or a share savings account at a credit union, used to set money aside and earn interest on it.
• Savings goalA savings goal is the amount of money a person plans to put aside for a specific purpose, such as a purchase or a future need.
• Scarcity (behavioral economics)In behavioral economics, scarcity refers to the way a shortage of money, time, or other resources captures attention and uses up mental bandwidth.
• Seasonal adjustmentSeasonal adjustment is a statistical technique that removes the effects of predictable seasonal patterns from data so underlying changes are easier to see.
• Secured loanA secured loan is a loan in which the borrower’s property, such as a house or a car, is pledged as collateral.
• Security depositA security deposit is a refundable sum a tenant pays at the start of a tenancy to protect the owner against unpaid rent or damage.
• Self-employment taxSelf-employment tax is a United States tax made up of Social Security and Medicare taxes that applies mainly to people who work for themselves.
• Self-insuranceSelf-insurance is an arrangement in which a person or organization keeps a financial risk instead of transferring it to an insurance company, and accounts for possible losses internally.
• SEP IRAA SEP IRA is a United States retirement arrangement in which an employer, including a self-employed person, contributes to traditional IRAs set up for eligible workers.
• Short-term goalA short-term goal is a financial aim expected to be reached within a brief span, such as by the end of the month or within a few months.
• Simple interestSimple interest is a way of charging interest only on the outstanding principal, not on interest that has already accrued.
• SIMPLE IRAA SIMPLE IRA is a United States retirement plan for small employers, usually those with 100 or fewer employees.
• SMART goalA SMART goal is an objective written to meet five tests.
• Spending planA spending plan is a written outline of the earnings a person expects and how those funds will be allocated or spent during a set period.
• Spending trackerA spending tracker is a record in which a person writes down what is earned and what is spent over a set period.
• StablecoinA stablecoin is a crypto asset designed to hold a steady value against a reference asset outside the crypto world, most often a national currency.
• Standard deductionThe standard deduction is a set dollar amount that reduces the income on which a U.S.
• Standard mileage rateThe standard mileage rate is a per-mile amount set by the Internal Revenue Service that taxpayers in the United States may use to figure a deduction for driving a vehicle for business, charity, medical, or certain moving purposes.
• StockA stock is a share of ownership in a company, which is why stocks are also called equities.
• Store of valueA store of value is an asset that lets purchasing power be set aside today and used later.
• Supplemental wagesSupplemental wages are payments made to an employee outside regular pay for a normal pay period.
• Surveillance pricingSurveillance pricing is the practice of using personal data, such as location, demographics, or browsing history, to set targeted prices for products or services.
• Survivor benefitA survivor benefit is a Social Security payment made to a widowed spouse after a worker dies.

T

• Target-date fundA target-date fund is a fund built for people retiring around a particular year, such as one named for 2050.
• Tax bracketA tax bracket is a range of income taxed at one particular rate under a progressive system.
• Tax creditA tax credit is an amount subtracted directly from the tax owed, as opposed to a deduction, which lowers the income that tax is figured on.
• Tax withholdingTax withholding is the portion of pay that an employer or pension provider deducts and sends to the tax authority on the worker's behalf.
• Taxable incomeTaxable income is the amount of income on which tax is actually computed, after subtractions such as the standard deduction or itemized deductions have been taken out.
• Taxable interestTaxable interest is income earned on bank accounts, certificates of deposit, bonds and similar holdings that counts toward a U.S.
• Term life insuranceTerm life insurance is a type of life insurance that pays a death benefit to the named beneficiaries if the insured person dies during a set period, called the term.
• Time horizonA time horizon is the length of time an investor expects to hold an investment before needing the money.
• Time value of moneyThe time value of money is the economic principle that a sum of money is worth more in the present than the same sum received later.
• Total compensationTotal compensation is the full value of what an employer pays for an employee's work, combining wages and salaries with the cost of benefits.
• Total returnTotal return is the full gain or loss on an investment, combining price change with income such as dividends or interest and accounting for costs like commissions and fees.
• Traditional IRAA traditional IRA is a United States individual retirement arrangement with two main tax features.
• Transfer feeA transfer fee is a charge a sending company applies for processing an international money transfer.

U

• Unbanked householdAn unbanked household is one in which no member has a checking or savings account at a bank or credit union.
• Underbanked householdAn underbanked household holds an account at a bank or credit union but also uses nonbank products to meet core financial needs.
• Unemployment insuranceUnemployment insurance is a program that pays money to people who lose a job through no fault of their own.
• Unemployment rateThe unemployment rate is the number of unemployed people expressed as a percentage of the labor force.
• Unexpected expenseAn unexpected expense is a relatively small and unplanned cost, such as a car repair or a modest medical bill, that arises outside a household's regular spending.
• Unit of accountA unit of account is the standard used to state prices and record debts.
• Unsecured loanAn unsecured loan is a loan that does not use property as collateral.

V

• Variable annuityA variable annuity is an insurance contract whose value depends on how the underlying investment options perform.
• Variable expensesVariable expenses are costs that change in amount from month to month.
• Vehicle leaseA vehicle lease is an agreement to use a car, new or used, for a set number of months and miles, in exchange for regular payments.
• VestingVesting is the process by which an employee gains full ownership of the money an employer has contributed to a retirement account.

W

• WantsWants are upgrades and other items that would be nice to have but are not necessary for living, earning income or protecting what a person already has.
• WillA will is a legal document in which a person states who should receive their property after death and often names an executor to carry out those wishes.
• Wire transferA wire transfer is an electronic movement of money from one person or business to another, sent through a bank or a money transfer service such as Western Union or MoneyGram.
• Withdrawal rateA withdrawal rate is the portion of a retirement portfolio that a person takes out in a given year, usually stated as a percentage of the balance.
• Working capitalWorking capital is the amount of current assets a business has left after its current debts are paid.

Y

• YieldYield is a general term for the return earned on the money put into a bond, usually expressed as a yearly percentage.