In today’s world, financial literacy isn’t just a nice-to-have; it’s a must-have! Whether you’re planning your next vacation, saving for a big purchase, or just trying to make sense of your paycheck, understanding key financial terms can make all the difference. Here’s a fun and easy-to-read glossary of essential financial terms every woman should know. We, at Girls with wealth, support find independence and encourage women participation by upping their finance game! So, here we present some super basic one line explainers to help women get it from the very start! Let’s dive in!
1. Income
The money you earn from work, investments, or other sources.
2. Expense
Money you spend on goods, services, or bills.
3. Budget
A plan for managing your income and expenses.
4. Savings Account
A bank account that earns interest on the money you deposit.
5. Current Account
A bank account used for daily transactions, primarily for businesses.
6. Fixed Deposit (FD)
A savings option where you deposit money for a fixed period to earn higher interest.
7. Recurring Deposit (RD)
A savings scheme where you deposit a fixed amount regularly and earn interest.
8. Interest
Money earned on savings or charged on loans.
9. Credit Score
A number that shows how good you are at repaying debts.
10. Loan
Money you borrow and must pay back with interest.
11. Home Loan
A loan to buy a house.
12. Principal
The original amount of money borrowed or invested.
13. Investing
Putting money into assets like stocks or bonds to grow your wealth.
14. Stock
A share in the ownership of a company.
15. Bond
A loan you give to a company or government, which pays you interest.
16. Mutual Fund
A pool of money from many investors used to buy a variety of stocks and bonds.
17. SIP (Systematic Investment Plan)
A method of investing regularly in mutual funds.
18. Dividend
A portion of a company’s profits paid to shareholders.
19. Net Worth
Your total assets minus your total liabilities.
20. Emergency Fund
Savings set aside for unexpected expenses.
21. PPF (Public Provident Fund)
A long-term savings scheme with tax benefits and decent returns.
22. EPF (Employees’ Provident Fund)
A retirement savings plan for salaried employees.
23. Inflation
The increase in prices over time, reducing the value of money.
24. Debt
Money you owe to others.
25. Credit Card
A card that lets you borrow money up to a limit for purchases.
26. APR (Annual Percentage Rate)
The yearly cost of borrowing money, including interest and fees.
27. Tax
Money paid to the government based on income, purchases, or property.
28. Insurance
A contract that provides financial protection against losses.
29. Health Insurance
Insurance that covers medical expenses.
30. Life Insurance
Insurance that pays a sum of money on the death of the insured person.
31. Term Insurance
Life insurance that provides coverage for a specific period.
32. ULIP (Unit Linked Insurance Plan)
A combination of insurance and investment.
33. Asset
Anything you own that has value, like cash, property, or investments.
34. Liability
Something you owe, like a loan or mortgage.
35. Diversification
Spreading investments across different assets to reduce risk.
36. Expense Ratio
The annual fee charged by a mutual fund.
37. Compound Interest
Interest calculated on both the initial principal and the accumulated interest.
38. Financial Planner
A professional who helps you manage your finances and plan for the future.
39. NPS (National Pension System)
A government-sponsored retirement savings scheme.
40. NSC (National Savings Certificate)
A fixed-income investment scheme for small savings and tax savings.
41. ELSS (Equity Linked Savings Scheme)
A type of mutual fund for tax-saving purposes.
42. Capital Gain
The profit made from selling an asset for more than its purchase price.
43. Capital Loss
The loss incurred when selling an asset for less than its purchase price.
44. Liquidity
How easily an asset can be converted into cash.
45. Pension
A retirement plan that provides regular payments after retirement.
46. Yield
The income return on an investment, such as interest or dividends.
47. Risk Tolerance
Your ability to endure losses in your investment portfolio
48. Asset Allocation
The process of dividing your investments among different asset categories.
49. Blue Chip Stock
Stock from a well-established, financially sound company.
50. Robo-Advisor
An automated service that provides financial advice and investment management.
By understanding these terms, you’ll be better equipped to take control of your finances and make informed decisions. Financial literacy is a powerful tool, and with this glossary, you’re well on your way to mastering your money!
Happy learning!
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