Understanding money is a skill that everyone can start learning early. Financial literacy for students is the perfect place to begin. Whether you’re just getting your first allowance or planning how to save for something big, knowing key money vocabulary helps you make smart choices.
This guide to financial literacy for beginners gives you the key vocabulary to talk about earning, saving, budgeting, and even borrowing with confidence. Each term is explained in plain language so you can quickly grasp what it means and how to use it in real situations.
By learning these financial vocabulary words now, you’ll build a strong foundation for smart money habits; skills that will help you make wise choices at school, at home, and later when you’re ready for bigger financial goals. Start exploring these essential financial literacy basics vocabulary words today, and set yourself up for a future where you stay in control of your money instead of letting it control you.
Financial Literacy Basics Vocabulary with Meaning
Below is a list of financial literacy vocabulary words with meaning in plain English so they are easy to understand.
- Earnings / Income / Paycheck
Money you get for doing a job or other work.
- Wages / Salary / Hourly rate
The money you earn for work; wages/hourly rate is paid for each hour, salary is a fixed amount per year.
- Allowance
Money your parents or guardians give you regularly, often for chores.
- Gross income
The total money you earn before anything is taken out.
- Net income / Take-home pay
The money you actually get after taxes or other deductions.
- Budget
A plan for how to use your money for saving and spending.
- Expense / Expenditure
Money you spend on things like food, clothes, or games.
- Needs vs. Wants
Needs are things you must have (like food, shelter); wants are nice extras (like new shoes when old ones still fit).
- Savings / Emergency fund
Money you set aside and don’t spend, so you have it later or for an unexpected cost.
- Goal setting
Choosing something you want to reach, like saving $50 for a book or game.
- Interest (earned on savings)
Extra money a bank gives you for keeping your money there.
- Checking account
A bank account you use for everyday spending and paying bills.
- Savings account
A bank account meant for keeping and growing your savings.
- Deposit / Withdrawal
Deposit is putting money into the bank; withdrawal is taking money out.
- Balance
How much money is currently in your account.
- Debit card
A card that lets you pay directly from your bank account.
- Online banking / Mobile banking
Using a computer or phone to check or move your money.
- Credit card
A card that lets you borrow money to pay now and promise to pay it back later.
- Loan / Borrowing
Money you take from someone (like a bank) that you agree to pay back.
- Debt
Money you still owe.
- Interest rate (on a loan or credit card)
The extra percentage of money you pay for borrowing.
- Credit score / Credit history
A number and record showing how well you pay back borrowed money.
- Minimum payment
The smallest amount you must pay on a credit card each month.
- Budget plan / Spending plan
A detailed list of how much you will spend and save each week or month.
- Investing / Investment
Using your money to try to grow it, such as buying a small piece of a company (stock).
- Compound interest
Earning interest on both your savings and the interest that has already been added.
- Financial goal
Something you plan to achieve with money, like saving for a bike.
- Fraud / Identity theft
When someone steals your personal information or money.
- Security / Privacy / PIN
Ways to keep your money safe, like a secret number for your bank card.
Financial Literacy Phrases
Here is a list of financial literacy phrases with meaning:
- Pay yourself first
Save some money before you spend on anything else.
- Live within your means
Spend only what you can afford, not more than you earn.
- Make a rainy-day fund
Save extra money in case something unexpected happens.
- Compare shop / Shop around
Look at prices in different places before buying.
- Track your spending
Write down or check how you use your money so you know where it goes.
- Bring home the bacon
Earn money to support yourself or your family.
- Nest egg
Money saved for the future, often for retirement or a big goal.
- Seed money
The first money used to start a business or project.
- Make ends meet
Earn enough to cover all your basic expenses.
- Cash in on
Take advantage of a situation to make money.
- Live paycheck to paycheck
Spend all the money you earn each pay period, with none left over.
- Blow your budget
Spend more than you planned.
- Stretch your dollar
Make your money go further; get the most value.
- Shop till you drop
Shop for a long time or spend a lot.
- Buy now, pay later
Get something today and agree to pay for it in the future.
- Break even
Your income equals your expenses; you don’t make or lose money.
- On a shoestring
Living or working with very little money.
- Tighten your belt
Spend less because you have less money.
- Cut corners
Spend less time or money, sometimes by skipping quality.
- Money doesn’t grow on trees
A reminder that money is limited and must be earned.
- A penny saved is a penny earned
Saving money is as good as earning it.
- Save for a rainy day
Put money aside for emergencies or surprises.
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