DECA FInance Cluster Roleplay Vocabs

Helpful finance vocabs to boost your financial knowledge and for you to name drop in your DECA FInance Cluster Roleplay, not applicable to the Finance Cluster Exam. (Last Updated 2025)

Personal finance

the financial decisions an individual or family must make to earn, budget, save, spend, and give $ over time

Credit

the granting of a loan and the creation of debt; any form of deferred payment (more on that later)

Interest

the additional cost a loaner charges for borrowing their money

Net worth

a person’s financial worth calculated through their assets minus their liabilities

Asset

anything owned by an individual (money, investments)

Liabilities

financial debts or obligations

Net income

what a person earns after payroll taxes/other deductions are taken out, aka “take-home” pay

Time value of money

money has greater value now than it will in the future due to its earning potential

Budget

written plan for money that tracks the ins and outs of where cash is flowing

Fixed Expense

remains constant each month (ex. Rent)

Variable Expense

varies in dollar amount from month to month, but you can at least expect some amount (ex. Groceries)

Intermittent Expense

occurs at various times throughout the year and tends to be in large, lump sums (ex. Car services)

Discretionary/Nonessential Expense

things you don’t need, stuff just for fun (ex. Buying stuff at a mall)

Zero-based budget

income – expenses = 0

Cash flow statements

records that summarize all the inflow and outflow of cash during certain periods

Irregular income

income that comes in at different times, amounts or both (ex. Birthday money)

Commission

earnings based on a percentage of the sales made

Murphy’s Law

if something can go wrong, it will -> plan for it

Emergency Fund

savings account set up specifically to be used to cover financial emergencies

Interest Rate

the percentage of principal charged by the lender for use of its money

Compound Growth

the average growth rate for an investment over time, often expressed as an annual figure

Accrued Interest

the amount of interest charged on a debt but not yet collected; interest accumulates from the date a loan is issued

Principal

the initial amount of money invested or borrowed

Rate of Return/Return on Investment

the measure of an investment’s profit or loss

Inflation

the persistent rise in the cost of goods/services over time

Debt

money owed to another person or company

Secured Credit

people with limited or damaged credit have to put down a security deposit to use as collateral

Unsecured Credit

No limits on credit and no deposit/collateral needed

Revolving Credit

how most normal credit cards work -> make a purchase and then you make a payment later that goes towards paying back the principal debt and the interest (buy now, pay for it later)

Installment Credit

credit that puts you on a schedule of payments to pay something off over a period (ex. Student loans, home mortgages)

Collateral

something that has value offered as security on a debt; if the debt isn’t repaid, the item is forfeited to the lender (ex. Down payment on a car or home)

Lien

legal claim/right for a lender to own an asset from a debtor until the debt/loan is repaid

Appreciating Asset

an asset that increases in value over time

Depreciating Asset

an asset that decreases in value over time

Equity

the increase in value of a home over time; the difference between the amount owned and what the home could be sold for

Predatory Lending

a lender who uses deceptive, unfair, or fraudulent practices on borrowers who are desperate

Payday Loans

Short term unsecured loan with high interest rates

Title Loans

Using vehicle title as collateral -> vehicles become a lien

Pawn Shops

shops where people can trade items for loans -> items are used as collateral

Default

failure to repay a loan on time

FICO score/credit score

a statistical 3-digit number used to represent a consumer’s creditworthiness

Credit Bureau

a company that collects credit rating info and makes it available to creditors

Obligation

binding course of action when somebody has to repay debt

Cash Advance

loans you take with a credit card like an ATM withdrawal w/ interest

Merchant fees

charged to states whenever you buy something from them with a credit card, and prices usually have 2-3% built in to offset the fee

Debit card

closest thing to cash because it withdraws directly from your checking account -> you only spend what you currently have

Term

the amount of time, in months, that you’ll be making payments

Negative Equity

when an asset’s value falls below what is owned on it

Impulse Buying

buying anything w/o planning to do so in advance

Consumerism

the theory that spending money/consuming goods is beneficial for the economy

Buyer’s Remorse

the guilt/regret/uneasiness after making a purchase

Mobile Pay

a type of digital payment made or received w/ a mobile device

Digital Payment

a completely electronic transaction between a buyer and seller, replacing the use of cash/checks/physically swiping or inserting a card

Marketing

the process of communicating the value of a product/service to customers

Brand Recognition

the public’s ability to recall and recognize a brand by its logo, jingle, packaging or name

Product placement

marketing tool that uses ethos to boost its popularity and credibility

Retargeting

keeps a company’s product in front of the target audience wherever they go (exposure effect)

Content marketing

shows products as the key to solving a customer’s issues

Influencer marketing

typically found on social media and allows those w/ large followings to broadcast their products (sponsors)

Snack videos

short, entertaining vids on most social media platforms/mobile games

Native advertising

digital ads disguised as normal social media posts

Identity Theft

the act of fraudulently gaining/using the personal info of somebody else, usually for financial gain

Card Fraud

unauthorized use of debit/credit card numbers and pins or forging of your signature

Opportunity cost

financial opportunity that is lost when you choose to do something/what you give up to choose to do something else

Hard skills

technical skills (typically learned) demonstrated w/ a level of competency requiring IQ (intelligence quotient)

Soft skills

character traits and interpersonal skills requiring EQ (emotional quotient) that guide how you interact with others

Proximity Principle

connecting with people who are doing the career you’re interested in and getting in the right places where your career is happening

Postsecondary Education

all education that takes place after HS, including university, college, community college, certification, or trade school

Private Student Loans

loans made by banks, credit unions, or other organizations with terms/conditions set by the lender including higher/variable interest rates

Federal Student Loans

loans made by the gov w/ terms and conditions set by law; often have a lower, fixed interest rate

Free Application for Federal Student Aid (FAFSA)

the federal application required to receive any financial aid like scholarships, grants, or loans

Grant

financial aid that doesn’t need to be repaid; usually awarded based on financial need

Scholarship

financial aid that usually doesn’t need to be repaid; usually awarded on merit

Work-Study

a program that allows students to work part-time while continuing their studies

Bachelor’s Degree

an undergrad degree from a college/university, usually after completing 4-5 years of study

Associate’s Degree

an undergrad degree from a college/university, usually after completing 2-3 years of study

Bank

a financial institution licensed to receive deposits and provide financial services

Credit Unions

type of bank that usually has lower fees/better interest rates than a traditional bank if you qualify as a member

Unbanked

when someone doesn’t have a bank account

Underbanked

a person has a bank account, but they still rely on alternative financial services

Overdraft fees

penalty charged if account holder spends more than account balance, causing it to drop below 0

Overdraft Protection

option offered by banks to cover overspending on account, but you repay amount of money they put into your account w/ interest

Liquidity

how quickly you can access the money in an account or the value of an asset w/o penalties or fees

Reconciling

validating that all transactions from your bank statements match your records

Balancing

including transactions that haven’t been posted to your account yet

Insurance

an arrangement in which an individual will receive financial protection/reimbursement of losses from an insurer

Policy

the contract between an insurance company and the insured individual

Coverage

the amount of liability protection offered to an individual through an insurance policy

Premium

the amount of money paid for an insurance policy

Grace period

the amount of time after the premium is due in which a policyholder can make a payment without suffering a lapse in coverage

Deductible

the amount of money you will pay out of pocket before the insurance company will make a payment

Claim

a formal request by a policyholder to their insurance company for compensation for a covered loss

Copays

the payments an individual makes each time they get medical service

Out-of-Pocket Maximum

the most a policyholder has to spend for covered services in a year

Uninsured/Underinsured Motorist Protection

protection for you and passengers if you’re hit by an uninsured/underinsured motorist, or if you are the victim of a hit and run

Personal Injury Protection (PIP)

a component of auto insurance that pays for medical expenses, lost wages, and other financial losses of the driver/passengers of the policyholder’s vehicle

Homeowners insurance

protection for losses to a private residence/the possessions within it as well as liability coverage against accidents in the home or on the property (several diff types)

Dwelling coverage

covers the structure of your house/cost to repair the entire house

Liability coverage

protects you from legal liability of property damage or bodily injury

Personal Property overage

covers personal belongings if damaged, destroyed or stolen