Money words, explained simply.
No jargon, no shame. If a term shows up in a post, it links here. Bookmark this page — it grows over time.
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A
Authorized User
A person added to someone else's credit card account. They get a card with their name on it, and the account's history…
→Automatic Transfer
A setting at your bank that moves money from one account to another on a set day, without you having to do…
→Avalanche Method
A way to pay off what you owe. You list your debts from highest interest to lowest, and attack the highest interest…
→B
C
Credit Builder Loan
A small loan where you make the payments first and get the money at the end. Each payment is reported to the…
→Credit Bureau
A company that collects credit information on millions of people. The three big ones in the U.S. are Experian, Equifax, and TransUnion.
→Credit Card Debt
Money you owe to a credit card company. It costs more than most other loans because the interest rate is very high.
→Credit Counseling
Help with your debt from a trained person at a nonprofit group. They look at your money and may set up a…
→Credit Invisible
A person with no credit record at any of the major credit bureaus. The system has no way to read them, so…
→Credit Mix
The different kinds of credit you have. A card, a car loan, a student loan. The system likes to see you can…
→Credit Report
A file that lists your history with debt. It shows every account you have opened, every payment you have made, and every…
→Credit Score
A three-digit number that tells lenders how likely you are to pay back money you borrow. In the U.S., it ranges from…
→Credit Utilization
The share of your credit limit that you are using. If your limit is $1,000 and you owe $300, your utilization is…
→D
Debt Management Plan
A deal set up by a credit counselor. You pay them one amount each month, and they split it among the people…
→Default
When you stop paying a loan you owe. The bank can take you to court, and your credit score drops a lot.
→Delinquent
When a payment is late. If you stay late too long, the bank reports you and may send your account to a…
→Dopamine
A chemical your brain makes. It gives you a good feeling when you expect a reward, like when you are about to…
→E
F
FICO Score
The most common credit score in the United States. It runs from 300 to 850 and is built from five pieces of…
→Financial Infidelity
When one partner hides money things from the other. It can be a secret purchase, a hidden account, or a lie about…
→Financial Therapy
Help that mixes money advice with emotional support. A trained person sits with you to talk about money and the feelings tied…
→Four Walls
The four things to pay first when money is short. Food, utilities, shelter, and transportation. Everything else can wait.
→G
H
I
M
Mental Accounting
A habit of the brain. You treat money differently depending on where it came from, even though all money is the same.…
→Minimum Payment
The smallest amount the bank will take this month. If you pay only this, the debt stays for years and grows bigger…
→Multiple Job Holder
A person who works two or more jobs at the same time. Many do it to pay bills they cannot cover with…
→N
P
Pain of Paying
A real feeling in the brain when you let go of money. Paying with cash hurts more than paying with a card.
→Pay Yourself First
A simple saving rule. The day money comes in, you move a small piece to savings before you spend anything else.
→Paycheck to Paycheck
When your income barely covers your bills, and by the next payday there is little or nothing left. One missed check, and…
→Personal Saving Rate
The share of income a country actually saves. In the U.S. it has fallen from about nine percent to about three percent…
→Principal
The actual amount you borrowed, before any interest is added. If you charged $5,000 on a card, that amount is what interest…
→S
Save More Tomorrow
A program that signs people up to save automatically. They can opt out, but they do not have to opt in, so…
→Secured Credit Card
A credit card that needs a deposit. The deposit becomes your credit limit. You use the card, pay the bill, and the…
→Self-Employment Tax
A tax you pay when you work for yourself. It covers the same things that come out of a regular worker's paycheck.
→Side Hustle
Work you do on the side to earn extra money. You keep your main job and add tutoring, driving, selling, or other…
→Snowball Method
A way to pay off what you owe. You list debts from smallest to largest, and clear the smallest one first to…
→Soft Inquiry
When you check your own credit report. It does not affect your score at all, and you can do it as often…
→Soft Start-Up
A way to begin a hard talk. You start with care, not blame, so the other person can hear you without going…
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