MoneyWiseYouth's Financial Dictionary
A quick, youth-friendly guide to the money terms you hear every day, explained simply.
Asset
Things you own that have value, like cash, property, or stocks.
Credit
Borrowed money that you agree to pay back later, often with interest.
Diversification
Spreading your investments across different assets to reduce risk.
Income
Money you earn from work, investments, or other sources.
Investment
Putting money into something (like stocks or real estate) with the goal of making a profit.
Loan
Money borrowed that must be paid back, usually with interest.
Return on Investment
A measure of how much profit you make compared to what you invested.
Budget
A plan for how you will spend and save your money over a certain time period.
Credit Score
A number that shows how reliable you are at repaying borrowed money.
Emergency Fund
Money set aside for unexpected expenses, like medical bills or car repairs.
Inflation
When the prices of goods and services go up over time, reducing the value of money.
Liability
Something you owe, like a loan or unpaid bill.
Net Worth
The value of everything you own (assets) minus everything you owe (liabilities).
Savings
Money you set aside instead of spending.
Compound Interest
Interest calculated on money you originally put in and the interest it has already earned.
Debt
Money you owe to someone else, like a bank or a person.
Expense
Money you spend on goods or services.
Interest
The cost of borrowing money (you pay it) or the reward for saving/investing money (you earn it).
Liquidity
How easily something can be turned into cash without losing value.
Principal
The original amount of money you borrow or invest, not counting interest.
Stock
A share of ownership in a company.