What do these money terms mean?
Every money term this site uses, in plain English. Each one links to a short definition and an example worked out with the site's own math, plus a list of every page that uses it. Terms are linked automatically the first time they appear on a page.
401(k)
A retirement savings account offered through an employer, funded from each paycheck.
APR (annual percentage rate)
The yearly interest rate a lender or card quotes, before compounding.
APY (annual percentage yield)
What a rate adds up to over a year once interest earns interest.
Balance transfer
Moving a card balance to a different card, often for a lower rate for a while.
Buy now, pay later (BNPL)
Splitting a purchase into a few payments, often with no interest if paid on time.
Cap cost (capitalized cost)
The price a lease is figured from, after any money paid up front.
Cash advance
Borrowing cash against a credit card, usually at a higher rate with a fee.
Compounding
Earning, or owing, interest on interest, so growth speeds up over time.
Deferred interest
A "no interest if paid in full" offer that charges all the skipped interest if any balance is left.
Depreciation
An item, like a car, losing value as it ages.
Not used on a page yet
Direct rollover
Moving retirement money from one account to another without cashing it out.
Early withdrawal penalty
An extra tax for taking money out of a retirement account too soon.
Equity
What's yours: something's value minus what's still owed on it.
Not used on a page yet
Hardship withdrawal
Taking money out of a 401(k) while still working, for a serious, immediate need.
Inflation
Prices rising over time, so each dollar buys a little less.
Installment
One of a set of scheduled payments that together pay off a purchase or loan.
Interest
The price of borrowing money, or the reward for lending or saving it.
Late fee
A charge added when a scheduled payment is missed or arrives after its due date.
Marginal tax rate (tax bracket)
The tax rate on the last, highest slice of income.
Not used on a page yet
Minimum payment
The smallest amount a card requires each month to stay in good standing.
Money factor
A lease's interest rate, written as a small decimal. Multiply by 2,400 for the APR.
Payday loan
A small, short-term loan due on the next payday, with high fees.
Principal
The amount borrowed, before any interest.
Not used on a page yet
Promotional rate (0% intro APR)
A low or 0% rate that lasts for a set time, then rises.
Residual value
What a leased car is expected to be worth when the lease ends.
Rollover (payday loan)
Paying only the fee on a payday loan to push its due date back, for another fee.
Not used on a page yet
Today's dollars
Future amounts adjusted for inflation, so they compare to what money buys now.
Vested
The part of an employer retirement account that is fully yours to keep.
Withholding (W-4)
Tax taken out of each paycheck. The W-4 form sets how much.