Personal Finance

A family of IRS tax forms used to report various types of income other than wages, salaries, and tips.

An employer-sponsored retirement savings plan with tax advantages, often including employer matching contributions.

A tax-advantaged retirement plan for employees of public schools, non-profits, and certain ministers, similar to a 401(k).

A tax-advantaged savings plan designed to help families save for future education expenses.

The process of gradually paying off a mortgage through scheduled payments that cover both principal and interest over the loan term.

An insurance product that provides guaranteed periodic payments, often used for retirement income.

Legal strategies and structures designed to shield personal and business assets from potential creditors, lawsuits, and financial risks.

A contract between a vehicle owner and an insurance company providing financial protection against physical damage, liability, and medical costs from car accidents.

A strategy allowing high-income earners who exceed Roth IRA income limits to contribute indirectly by converting traditional IRA contributions.

A legal process that provides individuals or businesses relief from overwhelming debt through court-supervised restructuring or liquidation.

A person or entity designated to receive assets, benefits, or proceeds from a financial account, insurance policy, trust, or estate.

The process of creating a plan for how to allocate income toward expenses, savings, and investments — the foundational skill that enables every other financial goal.

Tax on profits from selling investments. Short-term gains (held <1 year) taxed as income; long-term gains taxed at lower rates.

Additional retirement contributions allowed for individuals aged 50 and older, beyond standard annual limits.

A time deposit offered by banks that pays a fixed interest rate in exchange for keeping funds deposited for a specific term.

Fees and expenses paid at the finalization of a real estate transaction, beyond the property's purchase price.

Interest calculated on both the initial principal and accumulated interest from previous periods.

A savings strategy that maximizes the compounding effect by consistently contributing and reinvesting earned interest.

A single loan used to pay off multiple debts, simplifying payments and potentially reducing interest costs.

A person who agrees to repay a loan if the primary borrower defaults, sharing legal responsibility for the debt.

A numerical rating (typically 300-850) that represents a person's creditworthiness based on their credit history.

The percentage of available revolving credit currently being used, a major factor in credit score calculations.

A financial account managed by an adult on behalf of a minor, with assets transferring to the child at the age of majority.

A debt repayment strategy that prioritizes paying off debts with the highest interest rates first to minimize total interest paid.

A debt repayment strategy that prioritizes paying off the smallest balances first to build momentum through quick wins.

A financial metric comparing monthly debt payments to gross monthly income, used by lenders to assess borrowing capacity.

Insurance that replaces a portion of income if the policyholder becomes unable to work due to illness or injury.

A specific monetary amount that triggers a financial action, regulatory requirement, or eligibility change.

An upfront cash payment made when purchasing a large asset, representing a percentage of the total purchase price.

A dedicated savings reserve covering 3-6 months of essential expenses for unexpected financial emergencies.

A financial arrangement where a neutral third party holds funds or documents until specific conditions are met.

The process of arranging for the management and transfer of assets during life and after death.

The federal form used to determine eligibility for financial aid including grants, loans, and work-study programs.

The most widely used credit scoring model, created by Fair Isaac Corporation, ranging from 300 to 850.

A legal standard requiring financial advisors to act in their clients' best interest rather than their own.

A professional who provides guidance on financial planning, investments, tax strategies, and wealth management.

A lifestyle movement focused on extreme savings and investment to achieve financial independence and optional early retirement.

The distinction between loan interest rates that remain constant (fixed) versus those that fluctuate with market conditions (variable).

A temporary agreement allowing a borrower to pause or reduce loan payments during financial hardship.

The planned change in asset allocation over time, typically shifting from stocks to bonds as you approach or enter retirement.

A set timeframe after a due date during which payment can be made without penalty or interest charges.

A contract that covers a portion of medical expenses in exchange for regular premium payments.

A triple tax-advantaged account for medical expenses available to those with high-deductible health plans (HDHPs).

A revolving credit line secured by home equity that allows borrowing as needed up to a set limit.

The portion of a home's value that the owner actually owns, calculated as market value minus outstanding mortgage balance.

The fraudulent acquisition and use of someone's personal information for financial gain or other criminal purposes.

An insurance product offering returns linked to a market index with a guaranteed minimum, protecting against losses.

A personal tax-advantaged retirement account that anyone with earned income can open, available as Traditional or Roth.

A trust that cannot be modified, amended, or terminated by the grantor after it is established.

Individual tax-deductible expenses that can be listed separately instead of taking the standard deduction.

A form of property co-ownership where two or more parties hold equal shares with automatic right of survivorship.

An investment approach that staggers certificate of deposit maturity dates to balance yield and liquidity.

A contract that pays a death benefit to designated beneficiaries upon the insured person's death.

A legal document specifying medical treatment preferences if a person becomes unable to communicate their wishes.

The tax rate applied to the last dollar of income earned, determined by the taxpayer's tax bracket.

A loan secured by real property used to purchase a home, typically repaid over 15 to 30 years.

The actual amount of money received in a paycheck after all deductions including taxes, insurance, and retirement contributions.

A budgeting philosophy that prioritizes saving and investing before spending on other expenses.

A retirement plan where an employer guarantees regular payments to retired employees based on salary history and years of service.

A legal document granting another person authority to make financial, legal, or medical decisions on your behalf.

A lender's conditional commitment to provide a specific loan amount based on verified financial information.

A withdrawal from a tax-advantaged retirement account that meets IRS requirements and avoids penalties.

Replacing an existing loan with a new one, typically to obtain a lower interest rate, different term, or access equity.

The minimum amount that must be withdrawn annually from tax-deferred retirement accounts starting at age 73.

Mandatory annual withdrawals from retirement accounts starting at age 73, calculated based on life expectancy tables.

A retirement account funded with after-tax dollars that grows and can be withdrawn completely tax-free in retirement.

The percentage of portfolio you can withdraw annually in retirement with high confidence of not running out of money.

The percentage of income directed toward savings and investments rather than consumption.

A Simplified Employee Pension IRA allowing self-employed individuals and small business owners to contribute up to 25% of income.

The risk that the timing of poor investment returns early in retirement can permanently damage portfolio longevity.

A dedicated savings account for a planned future expense, funded through regular contributions.

A federal program providing retirement income, disability benefits, and survivor benefits funded through payroll taxes.

A fixed dollar amount that reduces taxable income for taxpayers who do not itemize deductions.

A loan designed to help pay for higher education expenses including tuition, room, board, and related costs.

An income range taxed at a specific rate within the progressive federal income tax system.

A dollar-for-dollar reduction in the amount of tax owed, more valuable than an equivalent tax deduction.

An investment or account where taxes on earnings are postponed until funds are withdrawn, typically in retirement.

Life insurance that provides coverage for a specific period (10-30 years) at a fixed premium with no cash value.

A tax-advantaged individual retirement account where contributions may be tax-deductible and earnings grow tax-deferred.

A legal entity that holds and manages assets for the benefit of designated beneficiaries according to specific terms.

A supplemental liability policy that provides coverage beyond the limits of home, auto, and other primary insurance policies.

An insurance product with investment sub-accounts where returns and payouts vary based on market performance.

The process by which an employee earns ownership rights to employer-contributed retirement benefits over time.

An annual tax document from employers reporting an employee's wages, taxes withheld, and benefits information.

A comprehensive financial advisory service combining investment management, tax planning, estate planning, and other strategies.

Permanent life insurance providing lifelong coverage with a guaranteed death benefit and a tax-advantaged cash value component.

A budgeting method where every dollar of income is assigned a specific purpose, so income minus expenses equals zero.