Understanding common money terms makes it easier to compare financial products, plan spending, and make confident decisions.
Budget
A plan that assigns your income to expenses, savings, and financial goals.
Emergency fund
Money set aside for unexpected expenses, such as repairs, medical bills, or a temporary loss of income.
Interest
The cost of borrowing money or the amount earned when you save or invest it.
APR
Annual percentage rate. For borrowing, it helps show the yearly cost of credit, including certain fees. Compare APRs when evaluating loans or credit cards.
Credit score
A number based on your credit history that lenders may use to assess borrowing risk.
Debt-to-income ratio
Your monthly debt payments divided by your gross monthly income. Lenders commonly use it when reviewing applications.
Compound interest
Interest calculated on your original balance and on accumulated interest. Over time, compounding can accelerate growth or debt.
Net worth
The value of what you own minus what you owe.
Inflation
A general increase in prices that reduces the purchasing power of money over time.
Learning these basics is a strong first step toward making informed financial choices.