Financial Terms
and What They Mean
A tax-advantaged savings plan designed to help families save money for future educational costs. There are two types of 529 plans: 529 prepaid tuition plans and 529 savings plans.
Someone or something to receive proceeds or benefits in the event of a specific event, such as a death. In a financial context, it’s the person, charity, trust or estate designated by the accountholder to receive the account's holdings.
A plan that outlines what money you expect to earn or receive—your income—and how you will save it or spend it—your expenses—for a given period of time. Also known as a spending plan.
A plan created to identify and consider factors like cost, features and choices to prepare to make a purchase. Examples include comparing car loan options or researching home prices and mortgage interest rates.
Interest calculated on both the original amount saved, called principal, and the interest that accumulates over time. This “interest on interest” effect helps money grow faster than with simple interest.
Initial cash payment made when something is bought on credit, such as a home or vehicle. The down payment reduces the amount of money that is borrowed.
A cash reserve that's specifically set aside for unplanned expenses or financial emergencies. Examples include car repairs, home repairs, medical bills or a loss of income.
Putting money into assets—like stocks, bonds or retirement accounts—with the goal of growing wealth over time.
Amount of pay you receive from your workplace after taxes and all other deductions are taken out.
Money you have set aside to be used for future emergencies or to make specific purchases.
