Personal finance
Here's a detailed list of vocabulary related to personal finance for the IELTS band score 4.5-6.0:
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Budget:
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A plan for managing income and expenses over a specific period.
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Income:
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Money earned from various sources, such as salary, wages, or investments.
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Expenses:
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The money spent on goods, services, and bills.
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Savings:
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Money set aside for future use or emergencies.
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Investment:
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Putting money into assets or ventures with the expectation of earning a profit.
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Debt:
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Money owed to creditors or lenders.
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Credit Card:
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A plastic card that allows users to make purchases on credit.
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Interest:
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The cost of borrowing money or the return on investment.
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Loan:
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Money borrowed from a lender, which must be repaid with interest.
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Mortgage:
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A loan used to buy real estate, typically repaid over a long period.
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Interest Rate:
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The percentage charged on a loan or earned on an investment.
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Credit Score:
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A numerical representation of a person's creditworthiness.
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Credit Report:
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A detailed record of a person's credit history and financial transactions.
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Assets:
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Things of value that a person owns, such as property, stocks, or savings.
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Liabilities:
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Debts or financial obligations that a person owes.
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Net Worth:
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The difference between a person's assets and liabilities.
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Insurance:
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A contract that provides financial protection against risks or losses.
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Retirement:
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The period when a person stops working and lives off their savings and investments.
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Pension:
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A regular payment received during retirement from an employer or government.
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401(k):
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A retirement savings plan offered by employers, where employees can contribute a portion of their salary.
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Stock:
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Ownership shares in a corporation.
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Dividend:
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A portion of a company's profits distributed to its shareholders.
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Inflation:
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The increase in the general price level of goods and services over time.
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Interest Compounding:
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Earning interest on both the principal amount and the previously earned interest.
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Diversification:
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Spreading investments across different assets to reduce risk.
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Emergency Fund:
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Savings set aside to cover unexpected expenses or emergencies.
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Bankruptcy:
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A legal process when a person or business cannot repay their debts.
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Financial Planner:
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A professional who helps individuals manage their finances and plan for the future.
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Tax:
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A mandatory contribution to the government based on income or purchases.
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Tax Deduction:
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Expenses that can be subtracted from taxable income, reducing the tax burden.
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Tax Return:
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A document filed with the government reporting income and taxes owed.
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Estate Planning:
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Making arrangements for the distribution of assets after a person's death.
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Living Will:
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A legal document that outlines a person's wishes regarding medical treatment in case of incapacitation.
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Fixed Expenses:
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Regular and predictable expenses that remain constant each month.
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Variable Expenses:
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Expenses that fluctuate each month, such as groceries or entertainment.
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Compound Interest:
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Interest earned on the initial principal and also on the accumulated interest.
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401(k) Matching:
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Employer contribution to an employee's 401(k) retirement plan.
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Financial Literacy:
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The knowledge and understanding of financial concepts and practices.
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Net Income:
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The amount of money left after deducting taxes and other deductions from gross income.
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Net Loss:
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When expenses exceed revenue or income.
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Understanding these personal finance terms will help you manage your finances more effectively and enhance your language skills for the IELTS exam. Good luck with your studies!
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