Introduction to Personal Finance Vocabulary

A collection of essential vocabulary terms in personal finance to aid students in understanding key concepts.

Personal Finance

The study of personal and family resources considered important in achieving financial success.

Financial Literacy

Knowledge of facts, concepts, principles, and technological tools that are fundamental to being smart about money.

Financial Well-being

A state of being wherein a person can fully meet current and ongoing financial obligations.

Financial Success

Achievement of financial aspirations that are desired, planned or attempted.

Financially Responsible

Living within your means and prepared for the unexpected or to achieve financial well-being.

Financial Security

A feeling that your financial resources will be adequate to fulfill any needs you have as well as most of your wants.

Financial Happiness

The experience you have when you are satisfied with your money matters.

Consumption

Spending on goods and services.

Savings

Income not spent on current consumption.

Investments

Assets purchased with the goal of providing additional future income from the asset itself.

Standard of Living

Material well-being and peace of mind that individuals or groups desire and seek to attain.

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen.

Budgeting

Understanding how much money you have, where it goes and planning how to allocate those funds best.