Glossary

 

Account Fees: A bank usually charges a monthly service charge for checks that are written by customers with checking accounts.
Bad Check: When a check is written for more than the check- writer has in the bank, the check is said to be bad. The checking account is overdrawn. The check will bounce.
Balance: The balance is the money you have available after paying your expenses.
Bank Statement: The bank sends a statement showing all deposits, checks paid (drawn), and fees charged. You can use this to check your own entries in your checkbook’s transaction records.
Beginning Balance: This is the amount of money in an account at the beginning of the reporting period.
Bill: This is the account for goods or services rendered.
Bouncing a Check: When a check is written for more than the check writer has in the bank, the check is said to be bad. The checking account is overdrawn. The check will bounce.
Budget: A plan of expenditure (e.g. personal or household expenses) with a given amount of money.
Capitalized Cost of an Automobile: This is the selling price of an automobile.
Cash: Money in the form of coins or paper, ready money.
Check: A check is a piece of paper that becomes money with a few strokes of a pen. It works like this:
You write a check to pay a bill, promising to pay the recipient the amount written on the check.
The recipient takes the check to his or her bank, where it is either cashed or the value in dollars written on the check is placed in the recipient’s account at his or her bank.
The recipient’s bank then sends the check back to your bank (the check writer’s bank).
Your bank takes the amount of the check out of your account.
The money is reimbursed to the recipient’s bank. (This is why it takes sometimes a while before the money is taken out of your account.)
Usually banks charge a service charge for checks that are written by people who have accounts at the bank.
Check Register: You should keep a running total in the check register of how much money is placed into the checking account at the bank as well as a running total of the checks that are written against the account. Whenever there is a question about whether a bill has been paid or not, the check register serves as a reference.
Checking Account: Checking accounts are convenient. Banks control how the flow of money works. People who use checks to pay their bills do not have to carry a lot of cash and they have an accurate record of how much money they have and how much money they have spent paying their bills.
Cost of a Loan: Multiply the monthly payments by the loan term (e.g. number of months) to get the total loan payment.
Credit Card: A plastic plate which may be accepted in place of cash. (e.g. VISA card)
Dealer’s Cost: This is the amount the dealer paid for the goods she or he sells.
Debit/Check ATM Card: A plastic plate which may be accepted in place of cash. The amount will be deducted from your checking account.
Deposit: A sum of money paid as a security, as a first installment, or into an account at a bank.
Deposit Ticket (Slip): A form to fill out when paying money into an account.
Down Payment: A sum of money paid as a security or as a first installment.
Ending Balance: This is the amount of money in an account at the ending of a reporting period.
Entry: This is a note or record of an amount of money in a book (e.g. transaction register)
Fee: A payment for services. (e.g. of a bank.)
Fixed Expenses: In personal finances fixed expenses are those over which you have little control, such as rent, mortgage, etc. They are nearly the same each month.
Flexible Expenses: In personal finances flexible expenses are those which vary from month to month. They often contain items which can be eliminated.
Insufficient Funds: If you don’t keep accurate records of the checks you write, you might write checks that total more money than you have in the bank. In this case your checking account is overdrawn and your check bounces. If this happens to you rarely, the bank might go ahead and honor the check, charge you an insufficient funds fee, and notify you to place money into your account to cover the check. However, if your checks bounce on a regular basis, you will be in serious trouble with the bank and with the law. You will be charged with writing bad checks.
Insurance: The practice by which an individual secures financial compensation for a specified loss or damage resulting from risk of any sort, by contract with a company to which he pays regular premiums (amounts of money).
Interest Rate: The money paid for the use of a capital amount of money in percent of the capital.
Lease Term: The length of time for which an item is leased. (e.g. a car.)
Loan Payment: The money paid for a loan of money.
Loan Term: The length of time for which a loan is given.
Manufacturers Suggested Retail Price: The price the dealer wants to sell an item for. This price contains the dealer’s cost and mark-up.
Mark-Up: An increase in the price of a thing. The amount added to the cost of an article to establish a selling price.
Mark-Up in Percentage: An increase in the price of a thing expressed in percent of cost.
Money: Anything that serves as a medium of exchange for goods and services, in the form of tokens which have a value established by a commonly recognized authority e.g. the government of a country, or by custom. The tokens are usually minted metal pieces, or promises to pay printed on paper.
Mortgage: An agreement in which a property (e.g. a house) is in the possession of the borrower, but may be claimed by the lender if the loan and interest on the property are not paid by the borrower according to the agreed terms.
Net Income: Whatever is received as gain, e.g. wages or salary, receipts from business, dividends from investments etc.
Opening Balance: This is the amount of money deposited in an account when it is opened.
Overdrawn: An account is said to be overdrawn, if more money is taken from it, than is in it.
Paycheck: Money received as wages or salary for work or services in the form of a check.
Payday: The day of the week or month on which wages or salary are regularly paid.
Rent: A payment made usually at fixed intervals to an owner of land or property in return for the right to occupy or use it.
Residual Value of a vehicle: The value of a vehicle at the end of the lease term. (Termination Value)
Salary: A fixed regular payment made especially to non-hourly workers.
Savings: Money saved.
Security Deposit: Money given as a guarantee for the payment of a debt.
Service Charge: Banks usually charge a fee for the services they provide to those who have accounts at the bank.
Sticker Price: The price of a car displayed on a sticker attached to the car. This price contains the dealer’s mark-up.
Target Price: When negotiating for a price of a car, aim for a target price which is a reasonable amount over the dealer’s cost for the car.
Tax: A charge on a person’s income or property, or on the price of goods sold, made by a government to collect revenue.
Transaction Record: A check register booklet into which information about checks paid, deposits made, and services charged are written.
Value of Trade-In: This is the amount of money a car dealer is willing to give you for your old vehicle when you buy or lease a new one.
Wage: A reward received by nonprofessional workers, usually in the form of a weekly payment of an agreed sum, calculated either according to the hours worked or according to the work done.
Withdrawals: Removal of money from an account.