Terms to get familiar with
Learning these words and concepts now instead of later in life will be a big help to you in your future
GrowinBizKids discovered that children like to learn these words and really don't have much trouble with comprehending most that we cover over the duration of time we spend with each student.
Below are some of those words to help you get started.
Some Key Terms kids learn taking part in a growinbizkids program
| Term | Description |
|---|---|
allowance |
an amount of money parents give kids to help them learn to manage money. The amount is usually given weekly. Sometimes an allowance is tied to completing responsibilities — household chores or jobs for the family |
annual fee |
A yearly fee you have to pay to have a credit card |
annual report |
The write-ups and financial statements given every year to investors and inquiring members of the public concerning a corporation's business |
asset |
A resource of money value, including cash, accounts receivable, inventory, real estate, machinery, collectibles, and securities |
ATM Card |
A plastic card that is used to pay for purchases and deposit or withdraw money from an ATM machine |
bank |
A bank is a financial organization where people deposit their money to keep it safe. |
balance |
Total amount of money in your account |
balance sheet |
A firm's financial statement that provides a picture of its assets, debts, and net worth at a specific time |
bankruptcy |
A term that describes the legal process governed by the U.S. bankruptcy code for companies unable to meet financial obligations |
bills |
A debt that you owe. |
bounce |
When a check you write cannot be paid because there is not enough money in your account |
broke |
When you have no money |
broker |
a licensed professional who advises people about investments; also helps people buy and sell stocks, bonds, mutual funds, etc. The broker earns a fee for this help, called a commission, usually a percentage of the transaction |
budget |
a plan you create for controlling spending and encouraging saving |
capital gain |
|
capital loss |
A decrease from the purchase price to the selling price of common stock or any other capital asset; a loss from the sale of investments or property |
cash |
Actual dollars and cents |
central bank |
The main bank of a country. The bank that the government uses. |
charge |
to borrow money (from a store, service provider, or credit card company) to make a purchase. If you do not pay the debt off in full within the card issuer's grace period (usually 25-28 days), you will pay interest on the amount you owe. |
charged (as on a crdit card) |
To use a credit card instead of cash to buy something. You agree to pay for it later. |
check |
A piece of paper that you write out to pay for debts. The money is then withdrawn from your bank account for payment. |
check register |
A little book where you keep track of deposits and withdrawals to your checking account |
checking account |
A bank account where you can get money out easily |
collectibles |
objects such as art, jewelry, baseball cards, and antiques that people buy in the hope that the objects' value will increase. |
commission |
A broker's fee is given for assisting in buying or selling securities |
common stock |
Shares in a company that represent part ownership of that company |
compound interest |
interest on an investment, like a savings account, that is calculated not only on the money you originally invested, but also on any interest the investment has already earned |
corporation |
An association of individuals, under authority of law, whose powers and liabilities are distinct from those of its individual members |
counterfeiters |
People who make fake money |
credit |
a loan that enables people to buy something now and to pay for it in the future |
credit history |
a record of your borrowing and paying habits. Credit reporting companies track your history and supply this information to credit card companies, credit unions, and other lenders |
credit rating |
|
currency |
Dollars and cents in circulation |
current assets |
Assets that can be converted to cash within a year |
current liabilities |
Liabilities that must be paid within a year |
debit card |
This plastic card looks like a credit card, but it is used to withdraw money from a savings or checking account. When you use a debit card at Automatic Teller Machines or in stores to make purchases, money is immediately withdrawn from your account. You cannot withdraw more money than you have in the account |
debt |
money or goods you owe |
default |
A term that denotes the failure to pay the principal or interest on a financial obligation. |
deposit |
Put money in a bank |
depreciation |
The decrease in value due to wear and tear, decay, decline in price, e.g., a new car purchased at $20,000 depreciates to $5,000 in five years |
depression |
|
discount |
to reduce from an original price or an item's full worth |
dividend |
a payment made by a company to a stockholder to share in the company's profits |
earned income |
wages paid in exchange for work |
economy |
How our country uses the products, natural resources, and services the we produce |
employer |
Your boss |
entrepreneur |
a person who assumes the risk to start a business with the idea of making a profit |
expenses |
Things that you buy or spend your money on, both needs and wants |
exports |
Products shipped outside the country |
financial |
Having to do with money |
fixed |
not changing. Fixed interest rates never change during the time of the investment or loan |
fixed assets |
Any long-term asset, such as a building, tract of land, or patent that will not be converted to cash within a year |
fixed expenses |
expenses which stay basically the same from month to month, such as housing and transportation |
full-time |
Generally means working 40 hours a week |
giving |
Giving money, time, or services to a cause |
grace period |
the time, usually about 25-28 days, which you have to pay a bill or a loan in full. If you pay within the grace period, you do not have to pay a finance charge |
hackers |
People who 'break into' computers to get personal information from them, like passwords, logins, and account numbers. |
import |
Bringing products into a country |
inflation |
When prices on lots of things go up at the same time |
interest |
Money earned or charged to you for having money in a bank or borrowing from the bank |
income statement |
|
income tax |
Money that wage earners pay the government to run the country. The amount of the tax depends upon how much you earn. |
insufficient funds |
A phrase that means you did not have enough money to cover an expense. Usually checks that bounce are returned stamped with the phrase, "insufficient funds." The amount of the check was larger than the balance in the checking account. |
insure |
To protect yourself from loss. You pay premiums (payments) to an insurance company who, in turn, agrees to pay for losses to your property (house, car, jewelry, etc.) or your person (in case of injury). You can buy insurance that protects you even when you cause a loss to other people. For example, you cause a car accident |
investor |
A person who puts their money into an investment |
interest |
Payment from a financial institution for allowing it to use a person’s money |
interest rate |
the price paid for the use of someone else's money expressed as an annual percentage rate, such as 6.5%. |
invest |
to put your money into CDs, money market accounts, mutual funds, savings accounts, bonds, stocks or objects that you hope will grow in value and earn you more money. |
lay off |
When companies need to eliminate jobs of people who are doing good work. This puts the people out of work and affects the economy. |
liabilities |
The claims of those who have loaned to a company; debts |
lien |
A right given to a lender over a borrower's property or money when the borrower cannot pay a debt. |
liquidity |
How quickly an asset (any item of value that you own) can be turned into cash. In other words, you don't have to wait until a certain date or pay a penalty to withdraw your money. |
loan |
Money or an object that is lent, usually with the understanding that the loan will be paid back, usually with interest. |
long-term debt |
A debt owed over a relatively long period of time |
minimum amount |
The least amount that you can pay for the month on a credit card |
minimum balance |
The least amount that you can have in an account before you are charged extra fees |
minimum wage |
The least amount of money that the federal government says you should be paid for each hour that you work |
negotiate |
To bargain with someone to get the highest pay for the amount of work that you do or the best deal for something you have. |
net income |
|
net worth |
Value found by subtracting all liabilities from all assets |
non-profit |
Organizations that are set up to not make a profit |
online |
On the internet |
opportunity cost |
The next best alternative that is given up when a choice is made |
operating costs and expenses |
The costs and expenses necessary to operate a company; includes manufacturing, marketing, research and development operating costs |
operating income |
The income derived after subtracting operating costs and expenses from net sales |
oral contract |
A verbal deal that you make |
payment |
Giving a check or cash for a product or service |
percentage |
A way of measuring. The number 100 (which stands for the whole amount) is usually divided into 100 smaller, but equal, parts, each called a percent. So a percentage usually refers to a certain number of parts within the whole. Therefore, 6% is 6 units out of 100% (the whole). If you have invested $100, and you earn 8% interest on the money, you will earn 8 parts of the whole, or $8. A percentage explains a number in relation to the whole |
private corporation |
A corporation which does not offer stock for public sale (Private corporations are not required by law to provide information about their financial conditions |
profit |
The money you've earned after you subtract a) any money you had to spend to make the product or perform the service. B) any taxes that had to be paid on your earnings |
public corporation |
A corporation which offers stock for public sale (Public corporations are required by law to provide information about their financial condition, operations, and such.) |
prospectus |
The written statement disclosing the terms of a mutual fund or the offering of securities |
raise |
Getting more money in your pay for doing the same work you usually do |
real estate |
Property in the form of land or buildings |
register (savings) |
A small booklet where you can write deposits and withdrawals from your account |
return |
The amount of money a saver receives from a savings account or fund. The return is usually talked about as a percentage, such as "This account returns 7.37%." |
return on equity (ROE |
The value found by dividing the company's net income by its net assets (ROE measures the amount a company earns on investments). |
risk/return trade-off |
The compromise made between high- and low-risk investments (High-risk investments generally generate more earnings, while low-risk ones generate a lower rate of return.) |
risk |
The chance that an original investment might lose value |
routing number |
A number on the bottom of your check that tells other banks where your bank account is |
salary |
A fixed amount that you are paid each year |
save |
To put money in a bank and hold it there without spending it |
Savings account |
An account held at a financial institution that helps the investor accumulate and save money while earning interest. The investor is able to take money out of the savings account at any time without any penalty. |
scarcity |
A lack of something, like money, natural resources, etc. Scarcity forces you to make choices about how you use or treat whatever is scarce. |
secure sites |
Internet web sites that are protected against hackers. There is usually a small, closed lock in the upper (or lower) toolbar to show you that the site is safe. |
share |
a unit of ownership in an investment or a company |
share holder |
someone who owns stock in a company. |
social security tax |
a tax used to fund a program of the US government that gives money to elderly people. The elderly receive funds because the federal government has deducted money from each of their paychecks during the course of their working lives. The money taken out of their paychecks has been deposited into the Social Security fund. Employers, too, deposited money to this fund on behalf of each employee. When people reach a certain age, they become eligible to receive Social Security payments. The government mails checks each month. These payments help the elderly live, now that they are no longer working full-time. The money they receive is drawn out of the Social Security fund, where it has been earning interest for many years. |
sole proprietor |
a business owned by a single person |
spending |
When you buy something |
standard of living |
the level of material well-being of an individual or group |
statement |
A monthly list of the deposits, withdrawals, or any activity in a bank account |
stock |
a certificate representing a share of ownership in a company |
stockbroker |
A broker who buys and sells stocks and other securities for his customers, charging commission |
stockholder |
A holder or owner of shares of stock; also referred to as shareholder |
stock market |
An organized way for 1) people to buy and sell stocks and 2) corporations to raise money. There are three widely known stock exchanges: The New York Stock Exchange, the American Stock Exchange, and the National Association of Securities Dealers Automated Quotation System (you hear it called NASDAQ on the news). |
taxes |
Money that is owed to a government |
total assets |
The sum found by adding property, building, and equipment asset values to current asset values |
total liabilities |
The liabilities found by adding current liabilities to long-term debts |
transaction |
Any movement of money in your bank account, like deposit or withdrawal |
unearned income |
Money you make that is not the result of your labor, such as interest from a savings account or other kind of investment. |
US bond |
A kind of investment in which you lend money to the government for a certain amount of time and at a certain interest rate. You are paid interest according to the terms of your bond. At the end of the agreed-on time, the borrower (the government) returns to you the amount you originally lent |
variable expenses |
Kinds of spending that can be controlled and typically change from month to month. For example, groceries can be a variable expense. You can choose to buy expensive food, (steak, lobster, lamb chops, or shrimp) or inexpensive food (chicken legs, turkey, hamburger). With variable expenses, you have choices |
vault |
A heavily armored room in a bank where the bank keeps the money |
wages |
Pay you receive for work that you do that is based on an hourly amount of money |
withdrawal |
Taking out money from an account |
