Financial Vocabulary

#1

Income

Example sentences

1. Maya earns income from her full-time job.
2. The family records its income every month.
3. A steady income helps people plan their spending.

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#2

Gross income

Example sentences

1. His gross income was $4,000 before taxes.
2. The bank asked for her annual gross income.
3. Gross income includes all pay before deductions.

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#3

Net income

Example sentences

1. Her net income is lower after taxes are taken out.
2. The company reported higher net income this year.
3. He uses his net income to plan his monthly budget.

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#4

Disposable income

Example sentences

1. Her disposable income increased after her tax bill fell.
2. The family uses disposable income for food and housing.
3. Higher disposable income can support more spending.

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#5

Discretionary income

Example sentences

1. He uses some discretionary income for travel.
2. Her discretionary income is small after paying rent.
3. People can save part of their discretionary income.

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#6

Expense

Example sentences

1. Rent is a major monthly expense for the family.
2. She wrote every expense in a notebook.
3. The business reduced an unnecessary expense.

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#7

Fixed expense

Example sentences

1. The apartment rent is a fixed expense.
2. A fixed expense usually stays the same each month.
3. He pays every fixed expense before buying extras.

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#8

Variable expense

Example sentences

1. The electricity bill is a variable expense.
2. A variable expense can change from month to month.
3. She controls each variable expense to save money.

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#9

Budget

Example sentences

1. The family made a budget for food and rent.
2. Her budget limits how much she can spend.
3. A clear budget can prevent money problems.

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#10

Cash flow

Example sentences

1. The shop has positive cash flow this month.
2. Poor cash flow made it hard to pay suppliers.
3. The manager checks cash flow every Friday.

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#11

Savings

Example sentences

1. She keeps her savings in a bank account.
2. Their savings helped them buy a car.
3. Regular savings can provide financial security.

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#12

Emergency fund

Example sentences

1. He used his emergency fund to repair the car.
2. The family adds $100 to its emergency fund each month.
3. An emergency fund can cover unexpected costs.

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#13

Net worth

Example sentences

1. Her net worth grew after she paid off debt.
2. Net worth equals assets minus liabilities.
3. The adviser calculated the family's net worth.

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#14

Asset

Example sentences

1. The house is the family's largest asset.
2. A business may buy an asset such as a truck.
3. An asset can have financial value.

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#15

Liability

Example sentences

1. The bank loan is a liability for the company.
2. She listed every liability on the form.
3. Paying debt can reduce a person's liability.

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#16

Financial goal

Example sentences

1. Buying a home is her main financial goal.
2. He set a financial goal to save $5,000.
3. A clear financial goal can guide daily choices.

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#17

Opportunity cost

Example sentences

1. The opportunity cost of buying a car was less money for travel.
2. She considered the opportunity cost before leaving her job.
3. Every financial choice may have an opportunity cost.

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#18

Purchasing power

Example sentences

1. Inflation reduced the purchasing power of his salary.
2. Higher wages can improve purchasing power.
3. The same $100 has less purchasing power than before.

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#19

Inflation

Example sentences

1. Inflation made food and fuel more expensive.
2. The central bank is trying to control inflation.
3. High inflation can reduce the value of savings.

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#20

Deflation

Example sentences

1. Deflation caused prices to fall across the economy.
2. During deflation, people may delay large purchases.
3. Long periods of deflation can hurt businesses.

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