Kids' Money Glossary
All kids need to begin learning about money. But, there sure are some confusing terms out there. Here is a simple glossary you can use to help you kids understand money and all the words we grown-ups use when we talk about it!
To help teach your kids about money management see our article on Money Management for Teens.
Activity: changes in the account balance, including deposits, withdrawals, checks cashed, service fees
Advertise: to let people know about a business (marketing) in order to get them to come and buy a product or service.
Amortized Loan: an installment loan that is paid off in multiple equal payments.
Annual Percentage Rate: (APR) the interest rate the bank pays over one year.
Balance: the total principal and interest in your account; in a credit card account, the total of all unpaid principal and interest.
Bills: the amount of money to be paid to a person or business for services or products.
Borrow: to obtain money from someone to use in the present, with the intention of paying it back later.
Bounced Check: a check the bank returns to payee unpaid because the account did not contain enough money to cover it.
Budget: a plan of how much to spend and what it will be spent on.
Business: the offering of a service or product for money.
Client: person who is served or to whom something is sold.
Compound Interest: with a bank account, it is interest that is paid on the principal and any interest earned so far; in a loan, it is interest charged on principal and interest.
Contract: a written agreement between people that describes what will be done, how much will be paid, and the date it will be done by.
Debt: money owed to someone as a result of borrowing (a loan).
Diligence: to work hard, smart, and fast to the best of your ability.
Discount: to offer something at a reduced price
Sale Price, Discount Price: marketing hook used by retailers to encourage sales--may be a low price, or simply a discount from an inflated price.
Fixed Costs: regular, on-going costs that do not depend on the number of customers.
Entrepreneur: someone who starts his or her own business to meet a need he or she sees.
Excellence: to do the best possible job, and then some.
Fee: the price charged for a service.
Finance Charge: the fees lenders charge for the use of their money, including interest, application fees, etc.
Income: money that is received from customers for services or the sale of products.
Installment Loan: a loan that is paid back in several payments, or installments, rather than all at once.
Integrity: to be totally honest, sincere, and fair.
Interest: with a loan, it is a fee lenders charge for the use of their money--also called finance charge; with a bank account, it is a fee banks pay depositors for the use of their money.
Invest: using money wisely in order to have funds for future needs.
ManufacturerSuggested Retail Price (MSRP): what the manufacture claims the product is worth--typically used by retailer as a base for discounts.
Minimum Payment: the least amount of money the creditor expects you to pay; generally, enough to cover the interest, with not much left over to pay down the principal.
NSF: Not Sufficient Funds-a polite way of saying the check bounced-not enough money in the account.
Payee: the person or company you wrote the check to.
Period: the fraction of a term used for computing interest and payments - generally one month.
Planning: to set out a series of steps to follow in order to achieve a goal.
Principal: with a loan, it is the amount of money you owe; with a bank account, it is any money you deposit in the account (as opposed to interest, which the bank pays into your account).
Principle: a standard or rule of conduct and morality by which to live.
Product: something made, found, or bought that can be sold for profit.
Profit: the money left over after paying all bills and expenses.
Real Price: what it actually costs you to buy the product.
Register: in your checkbook, it is a printed form used to record your transactions; at the bank, it is a paper form used to record your account activity: deposits, withdrawals, interest payments.
Resume: a list of your work experience and knowledge.
Responsible: to be reliable; to be trustworthy.
Revolving Credit: an open-ended loan arrangement, such as a credit card, that allows you to borrow and repay money gradually, rather than all at once.
Service: work done for others; the attitude of working for others willingly.
Simple Interest: interest that is paid on the principal only.
Term: the length of a loan.
Tithe: giving 10 percent, or a first part of your income to charity.
Transaction: any change made in your account, such as a deposit or withdrawal.
Variable Costs: costs that vary or change depending on the number of customers.
Volunteer: to work for someone for nothing, to offer your services without receiving payment for work.
Wholesale Price (cost): what the manufacturer charges the retailer-it varies with supply and demand and quantity ordered.
Yield: the amount of interest your investment produces, figured as a percentage of the investment.
