Plain-language definitions for the terms used across Fiscal Primer, from APR to yield.
A–F
APR (Annual Percentage Rate) — the yearly cost of borrowing, including interest and certain fees, expressed as a percentage.
Budget — a plan for how income will be spent, saved, and used to repay debt over a set period.
Compound Interest — interest earned not only on the original amount, but also on interest already added.
Deductible — the amount you pay out of pocket before insurance coverage begins to pay a claim.
ETF (Exchange-Traded Fund) — a fund that holds a basket of assets and trades on an exchange like a stock.
I–R
IRA (Individual Retirement Account) — a tax-advantaged account for saving for retirement.
401(k) — an employer-sponsored retirement savings plan, often with an employer matching contribution.
Index Fund — a fund designed to track the performance of a market index, rather than to pick individual winners.
Interest Rate — the cost of borrowing money, or the return earned on savings, usually stated per year.
Principal — the original amount borrowed, or invested, before interest.
Premium — the amount paid, usually monthly, to keep an insurance policy in force.
S–Y
Social Security — a U.S. federal program providing retirement, disability, and survivor benefits.
Stock — a share of ownership in a company.
Bond — a loan made to a company or government in exchange for interest payments and repayment of principal.
Yield — the income return on an investment, usually expressed as a percentage of its price.
Definitions are simplified for education. For a specific decision, check the governing documents and primary sources.