Money Terms Glossary for Teens & Students
Learn key money words for your first job, your bank account, and your future. Every term is explained in plain language—no complicated jargon.
Jump to a letter or scroll through the glossary for definitions, examples, and real-world explanations. This page is for you—whether you’re learning for school, your first job, or just want to get money-smart.
A–C
- Allowance
- A set amount of money given regularly, often by parents, to teach budgeting and saving.
- APR (Annual Percentage Rate)
- The yearly interest rate charged on borrowed money or earned on investments.
- ATM (Automated Teller Machine)
- A machine that lets you withdraw, deposit, or check account balances using a debit card.
- Auto Insurance
- Insurance that covers damages or liabilities from operating a vehicle; often required by law.
- Bank Account
- A financial account held at a bank that allows deposits, withdrawals, and money management.
- Bankruptcy
- A legal process for individuals who can’t repay debts; can severely impact credit and future borrowing.
- Budget
- A spending plan that tracks income and expenses to manage money effectively.
- Buy Now, Pay Later (BNPL)
- A service that allows you to buy now and pay in installments, often with no interest if paid on time.
- Checking Account
- A type of bank account that allows frequent withdrawals and deposits; often used for daily expenses.
- Compound Interest
- Interest calculated on both the initial principal and any previously earned interest.
- Credit
- The ability to borrow money now and pay it back later, usually with interest.
- Credit Card
- A card that allows you to borrow funds up to a limit for purchases, with the agreement to pay back with interest if not paid in full.
- Credit Limit
- The maximum amount a person can charge on a credit card.
- Credit Report
- A detailed record of your credit history, used by lenders to evaluate borrowing risk.
- Credit Score
- A number (typically 300–850) that indicates how likely someone is to repay borrowed money.
D–F
- Debt
- Money owed to others, typically as a result of borrowing.
- Deductible
- The amount you pay out-of-pocket on insurance claims before coverage kicks in.
- Direct Deposit
- A way for employers to electronically transfer your paycheck into your bank account.
- Discretionary Spending
- Non-essential spending (e.g., eating out, streaming services).
- Emergency Fund
- Savings set aside for unexpected expenses like car repairs or medical bills.
- Entrepreneur
- Someone who starts and runs their own business, often taking on financial risks.
- FAFSA
- Free Application for Federal Student Aid; used to apply for financial aid for college or career school.
- Fees
- Charges for services such as overdrafts, late payments, or account maintenance.
- Financial Aid
- Money to help pay for education expenses, which can come in the form of grants, loans, or scholarships.
- Fixed Expenses
- Regular, predictable expenses (e.g., rent, phone bill).
G–L
- Grace Period
- The time you have to pay a credit card bill without interest being charged.
- Grant
- Financial aid for education that does not need to be repaid.
- Gross Income
- Total earnings before taxes and deductions.
- Interest
- The cost of borrowing money or the reward for saving it.
- Internship
- A short-term job or training opportunity that offers work experience, often unpaid or low-paid.
- Investment
- Putting money into something (e.g., stocks, a business) with the expectation of earning a profit.
- Liability
- A financial obligation or debt.
M–P
- Minimum Payment
- The smallest amount you must pay on a credit card balance each month.
- Mobile Banking
- Accessing bank accounts through a smartphone app to check balances, transfer money, or pay bills.
- Net Income
- Earnings after taxes and deductions; also known as "take-home pay."
- Online Banking
- Using the internet to manage your bank accounts and perform financial transactions.
- Overdraft
- When you spend more than what’s in your account, often leading to fees unless you have overdraft protection.
- Paycheck
- A regular payment for work done, typically issued biweekly or monthly.
- Peer-to-Peer Payment Apps
- Apps like Venmo or Cash App used to send money directly to others.
- Principal
- The original amount of money borrowed or invested, excluding interest.
R–Z
- Renters Insurance
- Insurance that covers your personal belongings in a rented apartment or home.
- Roth IRA
- A retirement savings account that allows tax-free withdrawals in the future (available to those with earned income).
- Savings Account
- A bank account that earns interest and is used to store money for future goals.
- Scholarship
- Financial aid for education that does not need to be repaid, usually based on merit or need.
- Scam
- A fraudulent scheme designed to steal money or personal information.
- Student Loan
- Borrowed money to pay for education expenses that must be paid back with interest.
- Taxes
- Mandatory payments to the government, often deducted from your paycheck or charged on purchases.
- Variable Expenses
- Costs that change from month to month, like groceries or gas.
- Wants vs. Needs
- The difference between essential expenses (needs) and non-essential items or experiences (wants).
- Withholding
- Money taken out of your paycheck for taxes before you receive it.
Why Knowing Money Terms Matters
Understanding these terms helps you make smarter choices with your money—whether you’re getting your first job, opening a bank account, or planning for your future. The more you know, the more confident you’ll feel handling real-world decisions about spending, saving, credit, and more. Learning now can help you avoid common mistakes and reach your goals sooner.
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