Developing a financial vocabulary

 This financial vocabulary may come in handy for homework or as a resource for general learning about money matters


A

  
Account A written or printed statement of dealings on debits and credits.
Asset An asset is anything you own that has any value in money, plus any money you are owed.
   

B

  
Bank A financial institution where you can save money and earn interest, or borrow money and pay interest.
Balance sheet A statement of financial position that shows what is owned and what is owed.
Bank statement A written statement of dealings between you and the bank from the bank’s point of view.
Budget A written plan that lists expenses and income for a specific period of time (for example, six months or a year).
   

C

  
Capital  A sum of money used to generate income. 
Ceiling  An upper limit on what you can earn or what you can be required to pay. 
Credit  The provision of money with the expectation that it be repaid. It is also the side of an account on which are entered all amounts received from another party. 
   

D

  
Debit  The opposite of credit. It is the money that you owe or money that has been taken out of your account. It is also the side of an account in which are entered all amounts that you owe to another party. 
Debt  An obligation to repay an amount you owe. 
   

E 

  
Earnings  Money for work. How much you have left after paying tax or expenses. 
Exchange rate  The price at which the currency of one country can be converted to the currency of another country. 
   

F 

  
Financial planner  A person who helps to sort your personal finances and develop a financial plan to help you achieve your short-term and long-term financial goals. 
Float  In investment terms, a float is the number of outstanding shares a corporation has available for trading. 
   

G 

  
Goods  Things that you can buy or sell. 
Guardian   Someone who is designated legally responsible for a child or people who, due to a mental disability for instance, are not able to take care of themselves.
GST  GST (Goods and Services Tax) is a value added tax of 10 per cent on most goods and services transactions in Australia. 
   

I

  
Income  Money earned in exchange for your time and labour. 
Identity theft  The unauthorised use of your personal information, for example name and credit card details. 
Inflation  A persistent increase in the average level of prices for goods and services, which reduces the purchasing power of money. 
Interest  Money paid to you for borrowing or depositing your money, or money you pay for the use of someone else’s money. 
   

L 

  
Liability  The amounts you owe to the people who lend you money. 
Loss  When the return on your investment is less that what you originally invested. 
Lump sum  An amount of money you either have to pay or receive all at once. 
   

M 

  
Money  Notes and coins exchanged for goods and services. Money can be saved, spent, borrowed, invested and loaned. 
   

O 

  
Overdraft  A withdrawal from an account that exceeds the available balance. 
   

P 

  
Producer  One who grows agricultural produce or makes things from raw materials. 
   

Q 

  
Quarter  One quarter (three months) of a financial year, which is made up of four quarters. 
   

R 

  
Risk  The possibility of losing money on an investment. 
   

S 

  
Saving  The opposite of spending. Keeping money for future use. 
Spending  The opposite of saving – using money now. 
   

T 

  
Tangible  Things that a company may own, such as buildings, furniture, real estate or equipment, that have a monetary value. 
Tax  An assessed amount of money (levy) paid to the government on income and other things such as property, goods, services etc. 
   

V 

  
Valuation  Estimating the value or worth of an asset. 
   

W 

  
Will  A legal document that transfers your assets, after your death, to the people or organisations you want to have them.
World Bank  Established in 1944 to aid Europe and Asia after WWII. It’s a bank for countries rather than people.