Finplan helps you understand your money better
Financial dictionary
Understand financial terms in plain language. Explore definitions about budgeting, accounts, net worth and currencies, from A to Z.
Start with the essentials
Four concepts to help you understand your money.
Explore the terms
60 terms found
A
- Account statement
- A record of account activity over a period. It shows money coming in and going out, with information that helps reconcile the balance.
- Accounts and transactions
- Asset
- A good or right with economic value that can contribute to a person’s wealth.
- Planning and net worth
- Assets and wealth
- The collection of goods, rights, money and other valuables owned by a person or family.
- Planning and net worth
- Available balance
- The amount that can be used immediately after considering transactions, holds, pending activity and other commitments.
- Accounts and transactions
B
- Balance
- The amount recorded in an account at a particular time, taking its opening balance and transactions into account. It may differ from the amount immediately available to spend.
- Accounts and transactions
- Bank account
- An account held at a financial institution to store, receive, move or track money.
- Accounts and transactions
- Base currency
- The currency chosen as a reference for showing amounts, balances and wealth in a financial record.
- Currencies and exchange
- Budget
- A plan for expected income and expenses over a period. It helps allocate money to needs, commitments and goals.
- Everyday finances
C
- Cash flow
- The movement of money in and out over a period. It shows when money is received and when it is needed for payments.
- Planning and net worth
- Checking account
- A bank account used for everyday activity, such as receiving money, making payments, withdrawing cash and transferring funds.
- Accounts and transactions
- Compound interest
- A way of calculating interest in which accumulated amounts become part of the base for future returns or charges.
- Cards and credit
- Cost of living abroad
- An estimate of the amount needed to maintain a given standard of living in another country or city.
- Currencies and exchange
- Credit card
- A payment method that lets you buy now and pay later within a limit set by the institution.
- Cards and credit
- Credit card bill
- A statement that gathers card purchases and charges from a billing cycle and shows the amount due.
- Cards and credit
- Credit limit
- The maximum amount made available for purchases and other credit transactions during a period.
- Cards and credit
- Currency
- A medium of exchange used to express prices, make payments and store value within an economy.
- Currencies and exchange
- Currency conversion
- Calculation of the equivalent value of an amount in another currency using an exchange rate. A conversion for reference does not move money.
- Currencies and exchange
D
- Debit card
- A payment method that deducts the purchase amount directly from the available balance in an account.
- Cards and credit
- Debt
- An amount or financial obligation that a person or family still needs to pay to another person, company or institution.
- Everyday finances
- Discretionary expense
- An expense that is not essential to meet basic needs and can be reduced or postponed according to the budget.
- Everyday finances
- Diversification
- Distributing money across different assets, accounts or sources to reduce dependence on a single result.
- Planning and net worth
- Due date
- The deadline for paying an obligation without being late or incurring the applicable charges.
- Accounts and transactions
E
- Emergency fund
- Money set aside for unexpected expenses or periods of lost income. Its purpose is to provide financial security when something unplanned happens.
- Planning and net worth
- Essential expense
- An expense related to a basic need or important commitment, such as housing, food, health care and transportation.
- Everyday finances
- Exchange rate
- The price of one currency expressed in another. It indicates, for example, how many dollars are needed to buy one euro, before any fees and taxes.
- Currencies and exchange
- Exchange spread
- The difference added by an institution between a market reference rate and the rate actually applied to a currency transaction.
- Currencies and exchange
- Expense
- A cost incurred for goods, services or obligations, such as groceries, rent or transport. It can be fixed or vary over time.
- Everyday finances
- Extra income
- Money received in addition to a main source of income, such as occasional work, commissions, sales or one-time services.
- Everyday finances
F
- Family budget
- A plan for the income, expenses and financial goals of a family or group that shares responsibilities.
- Everyday finances
- Financial control
- Organized tracking of income, expenses, balances and commitments to understand your financial position and make better decisions.
- Everyday finances
- Financial goal
- A money-related objective defined with an amount and a deadline, such as building a reserve, taking a trip or paying off debt.
- Everyday finances
- Financial planning
- The process of setting goals and organizing how money will be used to reach them over time.
- Everyday finances
- Fixed expense
- An expense that usually repeats at a similar amount and predictable intervals, such as rent, tuition or health insurance.
- Everyday finances
- Foreign currency balance
- An amount held or recorded in a currency different from the main financial reference currency.
- Currencies and exchange
I
- Income
- Money earned from sources such as wages, services or rent. Moving money between your own accounts does not create new income.
- Everyday finances
- Inflation
- A general increase in the prices of goods and services over time that reduces the purchasing power of money.
- Planning and net worth
- Installment
- A way to split the payment of a purchase or debt into several installments, with or without interest.
- Cards and credit
- Interest
- The amount charged for using someone else’s money or earned for lending or investing capital over time.
- Cards and credit
- International remittance
- Money sent from one country to another, usually subject to exchange rates, fees, taxes and transaction rules.
- Currencies and exchange
- IOF
- A Brazilian tax on financial transactions that may apply to certain credit, foreign exchange, insurance and investment operations.
- Currencies and exchange
L
M
- Multicurrency account
- An account offered by an institution that lets you hold balances in different currencies. Available currencies and transaction conditions depend on the service.
- Currencies and exchange
N
- Net worth
- The value of a person’s assets minus their debts. It represents what would remain if all obligations were paid off.
- Planning and net worth
O
- Opening balance
- The amount held in an account when a period or financial record begins.
- Accounts and transactions
P
- Payment
- Money paid to settle a purchase, bill, debt or another financial obligation.
- Accounts and transactions
- Pending transaction
- A recorded or detected movement that is still waiting for confirmation before it is considered complete.
- Accounts and transactions
- Personal finance
- The decisions and practices used to manage a person’s income, spending, debts, savings and goals.
- Everyday finances
- Profitability
- The return earned by money invested or by an asset over a given period.
- Planning and net worth
- Purchasing power
- The amount of goods and services that a given sum of money can buy during a period.
- Planning and net worth
R
- Recurring expense
- An expense that repeats on a planned schedule, such as a subscription or monthly bill.
- Everyday finances
- Recurring income
- Money received on a planned schedule, such as wages, retirement income, rent or a contracted payment.
- Accounts and transactions
- Revolving credit
- Credit used when the full credit card bill is not paid by its due date, generating charges.
- Cards and credit
- Risk
- The possibility that a financial result will differ from what was expected, including losses or changes in value.
- Planning and net worth
S
- Savings account
- An account intended for holding money that may earn interest according to the financial institution’s rules.
- Accounts and transactions
- Simple interest
- A way of calculating interest in which the rate is always applied to the initial amount.
- Cards and credit
- Spending category
- A classification used to group similar expenses and understand how money is being used.
- Accounts and transactions
- Subcategory
- A more detailed division of a category that identifies the source of an income or expense more precisely.
- Accounts and transactions
T
- Transfer
- Movement of money from one account to another. Between your own accounts, it does not itself change total net worth, excluding fees and exchange-rate effects.
- Accounts and transactions
V
- Variable expense
- An expense whose amount changes from one period to another, such as food, transport, leisure or energy use.
- Everyday finances
Financial meanings, made simple
A dictionary to turn to whenever a question comes up. Each term has a straightforward definition that explains its meaning in financial life. Browse by letter, search for a word or choose a topic.
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