Money Vocabulary

Credit

• Credit is the trust which allows one party to provide money or resources to another party where that second party does not reimburse the first party immediately, but instead arranges either to repay or return those resources at a later date.

Debit • an entry recording an amount owed, listed on the left-hand side or

column of an account. The opposite of credit.

Interest • money paid regularly at a particular rate for the use of money lent, or

for delaying the repayment of a debt.

Gross Pay• The total of an regular remuneration including allowances, overtime

pay, commissions, and bonuses, and any other amounts, before any deductions are made.

Net Pay• an entity's income minus cost of goods sold, expenses and taxes for

an accounting period.

Fixed Expenses • Largely same as fixed costs, except that non-cash items such as

depreciation and depletion are not included.

Variable Expenses • costs that change in proportion to the good or service that a business

produces.

Consumable Goods • goods that are capable of being consumed; that may be destroyed,

dissipated, wasted, or spent.

Durable Goods• goods not for immediate consumption and able to be kept for a

period of time.

FICA

• Federal Insurance Contributions Act

Salary • a fixed regular payment, typically paid on a monthly or biweekly basis

but often expressed as an annual sum, made by an employer to an employee, especially a professional or white-collar worker.

Discretionary Expenses• a cost which is not essential for the operation of a home or a

business.

Budget • an estimate of income and expenditure for a set period of time.

Credit Score• a number assigned to a person that indicates to lenders their capacity

to repay a loan.

Financial Institution • an organization, a bank or brokerage, that offers financial services

such as deposit taking, checking accounts, loans, or various investment services.

Mortgage • the charging of real (or personal) property by a debtor to a creditor as

security for a debt.