APR (Annual Percentage Rate) – The cost of borrowing money every year, expressed as a percentage rate.

Asset – An item with economic value, such as stock or real estate.  

Benefit – Something an employer, the government or an insurance company provides that’s often used only for a particular purpose, such as food or medical costs. 

Collateral – An asset that secures a loan or other debt a lender can take if you don't repay the money you borrow. For example, if you get a home loan, the bank's collateral is typically your house. 

Compound interest – When you earn interest on both the money you save and the interest you earn.

Credit – Borrowing money, or having the right to borrow money to buy something. Usually, it means you’re using a credit card, but it might also mean you got a loan.

Credit card statement – A summary of how you've used your credit card for a billing period. 

Credit limit – A limit set by the credit card company on how much you can charge on the card. You can use your credit card to make purchases up to your credit limit. 

Credit score – Numbers created by mathematical formulas that use key pieces of your credit history to calculate your score at a moment in time. 

Debt – Money you owe another person or a business. 

Direct deposit – Money electronically sent to your bank account, credit union account or prepaid card. 

Gross income – Total pay before taxes and other deductions are withheld. 

Income – Money earned or received. This includes wages or salaries, tips, commissions, contracted pay, government transfer payments, dividends on investments, tax refunds, gifts and inheritances. 

Income tax – Federal, state and local taxes on income, both earned (salaries, wages, tips, commissions) and unearned (interest, dividends). Includes both personal and business income taxes. Not all states have income taxes.

Interest – A fee charged by a lender, and paid by a borrower, for the use of money. A bank or credit union may also pay you interest if you deposit money in certain types of accounts.

Interest rate – A percentage of a sum borrowed that is charged by a lender or merchant for letting you use its money. A bank or credit union may also pay you an interest rate if you deposit money in certain types of accounts.

Liability – Something that is a disadvantage, like money owed, debt or obligation according to law. 

Mortgage – A loan used to buy a home or to borrow money against the value of a home you already own.

Overdraft – An overdraft occurs when you don’t have enough money in your account to cover a transaction, but the bank pays the transaction anyway by allowing your account to have a negative balance.

Premium – The amount of money paid annually or monthly for an insurance policy. 

Principal – In the lending context, principal is the amount of money you originally received from the creditor and agreed to pay back on the loan with interest. In the investment context, it is the amount of money you contribute with the expectation of receiving income.

W-2 – A form, also known as the Wage and Tax Statement, an employer is required to send to each employee and the Internal Revenue Service (IRS) at the end of the year. A W-2 reports employees' annual wages and the amount of taxes withheld from their paychecks.

Withholding – Money employers withhold from employees’ paychecks for taxes.