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5.01

13th Stack

TermDefinition
Compound interest Earning interest on interest.
Consumption The purchase of goods and services.
Do it yourself When you complete a task yourself rather than paying someone else.
Emergency savings Cash set aside to cover the cost of unexpected events.
Interest Price paid for using someone else's money.
Interest rate Percentage rate used to calculate interest.
Liquidity How quickly and easily assets can be accessed and converted into cash.
Pay yourself first Saving for the future by putting money aside before paying regular monthly bills or using income for discretionary purchases.
Principal The original amount of money saved or invested.
Saving Accumulation of excess funds by intentionally spending less than you earn.
Savings Portion of income not spent on consumption.
Time value of money Money available at the present time (today) is worth more than the same amount if received in the future.
Created by: ZLittle97
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