Savings Tools Vocabulary
Assets: everything an individual or household owns with monetary value.
Compounding interest: earning interest on interest.
Depository institution: a business that offers banking and finance services.
Goal: the end result of something a person intends to acquire, achieve, do, reach, accomplish.
Interest: the price of money.
Interest rate: the percentage rate paid on money invested or saved.
Level of living: the amount of money needed to pay for necessities and comfort enjoyed.
Liabilities: debts or what is owed to others.
Net income: the amount of an individual’s pay after taxes and deductions have been taken out.
Net worth: amount of money left when liabilities are subtracted from assets.
Pay yourself first: a saving strategy that states that you set aside a predetermined portion of money for saving each time a person is paid before using any of the money for spending.
Principal: the original amount of money saved or invested.
Savings: the portion of current income not spent on consumption.
Wealth: a measurement of how much a person or household owns once all debts have been paid off.