A Glossary of Money and Finance Terms

Money is something that everyone needs to survive. When you have money, you can trade it for things you need, such as food, shelter, and clothing. Money also makes it possible to buy other things that you might not need, but that make life more enjoyable and pleasant. The best money management also involves saving some money so you have it when you need it. Because money is important and you have to earn it, it’s also necessary to learn how to manage it wisely. Learning these financial terms will help you understand money.

Bank – A bank is a financial institution that provides deposit accounts  for customers and also provides loans.

Bank note – A bank note is paper money, including all the different bill denominations.

Barter – To barter is to trade one item or service for another item or service.

Budget – A budget is a plan for spending and saving money.

Bureau of Engraving and Printing – A Division of the U.S. Department of the Treasury that prints paper money.

Capitalism – Capitalism is a type of economic system with businesses being controlled by private owners instead of the government.

Check – A check is a written order that tells a bank to pay a certain amount of money to an individual or a business.

Command economy – A command economy involves the government owning the production of goods and services, also determining the pricing.

Counterfeit – A counterfeit bill is a fake copy that is used illegally.

Credit card – A bank or financial services company issues a credit card that enables people to borrow money to make purchases. Cardholders must payback the borrowed money, plus any applicable interest and fees.

Currency – Currency is the system of money used by a country or region.

Debt – A debt is an amount of money that is owed to someone else.

Deposit – A sum of money placed or kept in an account.

Federal Reserve Note – A Federal Reserve note is a term to describe the paper currency used in the United States.

Income – Your income is the amount of money you earn.

Inflation – Inflation is the rate at which the average price for goods and services goes up over a period of time.

Inheritance – An inheritance is the money or property that is passed from one person to another after the original owner’s death.

Interest – Interest is the amount a lender charges a consumer for borrowing money. It is also an amount a financial institution pays account holders for keeping money in a savings account.

Insurance – An insurance contract protects the insured against loss of something, such as a house.

Investment – Using resources, usually money, with the expectation of generating income or profit.

Law of Supply and Demand – An economic theory where prices are determined by how much of a product is available and how high the demand is for that product.

Legal tender – Coins or banknotes that must be accepted if offered to pay for goods or services in a country.

Loan – A loan involves borrowing something, usually money, that has to be paid back with interest.

Mint – A mint is a facility that makes coins that are used as money.

Monopoly – A monopoly happens when one company has no competition and has exclusive control of the production of a service or product.

Profit – Profit is the amount of money left over after expenses are paid.

Salary – A salary is the regular compensation paid to an employee by an an employer.

Stock – A stock is the investment that represents an ownership share of a company.

Striking – When coins are made, the striking process stamps the design of the coin into the metal.

Tax – A tax is money paid to the government to fund government services.

About the Author

Carly Hallman

Carly has been a thought leader, and executive within a large financial brand since 2011. As the Director of Marketing, she enjoys working alongside her brilliantly creative team to expand the their digital footprint and bring their marketing and business objectives to the next level of awesome. Outside of work, Carly donates her design skills to Savannah Children's Theatre and volunteers with Coastal Pet Rescue saving and finding homes for homeless animals. She also enjoys sports, boating, painting, and all outdoor adventures. Her favorite color is any hue that looks like the ocean and she loves boiled peanuts.