Glossary
The financial terms other sites assume you already know, defined plainly. Search to filter.
- APR (Annual Percentage Rate)
- The yearly cost of borrowing money, including interest and most fees, expressed as a percentage. Used to compare loans and credit cards on equal footing.
- APY (Annual Percentage Yield)
- The yearly rate of return on savings, including the effect of compounding. Higher APY means your money grows faster — this is what to compare across savings accounts.
- Amortization
- The process of paying off a loan through scheduled payments, where each payment covers some interest and some principal. Early payments are mostly interest; later payments are mostly principal.
- Compound interest
- Interest calculated on both the original amount and any interest already earned or owed. It's why debt can snowball and why long-term investing pays off — growth builds on growth.
- Credit utilization
- The percentage of your available credit you're currently using. A major factor in your credit score — keeping it under 30% (ideally under 10%) generally helps your score.
- Diversification
- Spreading investments across many different assets so that one bad performer doesn't sink your entire portfolio. Index funds are diversified by design.
- Expense ratio
- The annual fee an investment fund charges, taken directly out of your returns. Lower is better — index funds often charge 0.03–0.10%, actively managed funds often charge 0.5–1.5%.
- FICO score
- The most widely used credit scoring model, ranging from 300–850. Lenders use it to judge how risky it is to lend to you.
- Fiduciary
- A financial advisor legally required to act in your best interest, not their own (e.g., not steering you toward products that pay them a higher commission). Not all advisors are fiduciaries — ask directly.
- Index fund
- A fund that holds all (or a representative sample) of the stocks in a market index, like the S&P 500, so you own a small piece of every company in it at once.
- Liquidity
- How quickly an asset can be converted to cash without losing value. Cash is fully liquid; real estate is not.
- Marginal tax rate
- The tax rate applied to your next dollar of income — i.e., the rate for the top bracket you're in. See the Taxes page for the full explanation.
- Net worth
- Everything you own (assets) minus everything you owe (liabilities). The single best snapshot number for tracking overall financial progress over time.
- Principal
- The original amount borrowed or invested, not counting interest or returns.
- RMD (Required Minimum Distribution)
- The minimum amount you must withdraw annually from most retirement accounts starting at age 73, whether you need the money or not.
- Rule of 72
- A quick way to estimate how long an investment takes to double: divide 72 by the annual return rate. At 8% annual return, money doubles roughly every 9 years (72 ÷ 8).
- Sequence-of-returns risk
- The risk that poor investment returns early in retirement do outsized damage, because you're withdrawing from a shrinking balance with less time to recover.
- Standard deduction
- A flat amount the IRS lets you subtract from your income before taxes are calculated, without needing to itemize individual deductions.
- Vesting
- The schedule by which you gain full ownership of employer contributions (like a 401(k) match) — leave before you're fully vested, and you may forfeit some or all of the employer's portion.
- Yield
- The income return on an investment, usually expressed as a percentage — e.g., a bond's yield or a savings account's APY.
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Official Tools & Links
Free, official, government or nonprofit resources — nothing here is a paid placement or affiliate link.
IRS Tax Withholding Estimator
Check whether your W-4 withholding matches what you'll actually owe.
irs.gov
AnnualCreditReport.com
The only federally authorized source for free weekly credit reports from all three bureaus.
annualcreditreport.com
Consumer Financial Protection Bureau (CFPB)
File a complaint about a bank, lender, or debt collector, or browse plain-English guides.
consumerfinance.gov
Social Security Administration
Create an account to see your real, personalized estimated benefit.
ssa.gov
Investor.gov
The SEC's free investor education site — includes a compound interest calculator and fraud warnings.
investor.gov
IRS Free File
Free federal tax filing software for eligible incomes, directly through the IRS.
irs.gov
National Foundation for Credit Counseling
Nonprofit, accredited credit counseling — a legitimate alternative to for-profit debt settlement companies.
nfcc.org
Unclaimed Money Search (USA.gov)
Check if you have unclaimed property or funds from old accounts, refunds, or paychecks.
usa.gov
Reading List
A few finance and economics books worth your time, from the person behind this site — not a curated "best books" list, just what's actually been read recently.
Currently Reading
In progress
Macroeconomics
A textbook take on macroeconomics from a Modern Monetary Theory (MMT) perspective — useful for understanding government spending, deficits, and monetary policy debates from outside the mainstream frame.
Recently Read
Nudge: The Final Edition
The foundational book on behavioral economics and "choice architecture" — why small changes in how options are presented (defaults, framing) change financial decisions more than people expect.
The Big Short
The story of the investors who saw the 2008 mortgage crisis coming — a good plain-English read on how complex financial products (and bad incentives) can quietly build systemic risk.
Freakonomics
Applies economic thinking to everyday questions outside of finance — a good reminder that incentives, not intentions, usually explain how people actually behave.