Financial Glossary
Plain-English definitions of terms you'll see in calculators, guides, and every financial decision you make.
APR (Annual Percentage Rate)
The yearly interest rate charged on a loan or credit, including fees — the true cost of borrowing.
Compound Interest
Interest calculated on both principal and previously earned interest — the engine of wealth building.
Emergency Fund
A cash reserve set aside for unexpected expenses — typically 3–6 months of living costs.
Amortization
The process of paying off a debt in regular installments over time, where early payments are mostly interest.
Net Worth
Your total assets minus total liabilities — the single most important personal finance number.
Debt-to-Income Ratio (DTI)
Your monthly debt payments divided by gross monthly income — a key metric lenders use to evaluate you.