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Tax Withholding
To Have and Withhold
Tax withholding is money your employer takes out of your paycheck each pay period. Your employer then sends that money to the federal and state governments to pay your income taxes on your behalf.
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Emergency Fund
Cash Cushion
An emergency fund is your stash of just-in-case money. Along with your insurance coverage, it’s a vital...
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Risk Tolerance
Appetite for Destruction
Risk tolerance describes how much risk you can (or should) be taking on with your investments. Investing...
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Roth IRAs
Road to Retirement
A Roth IRA, or Individual Retirement Account, is one of the most common types of retirement savings...
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Credit Report
Good Marks
Your credit report is a detailed history of your past use of credit. It’s a bit like...
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How to Save More Money
Keep the Change
Like many good habits, saving more money is easier said than done. Once you’ve gotten into a...
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Cash Alternatives
Cash In
Cash alternatives are investment types that you can consider as alternatives to simply holding money in your...
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Getting Out of Credit Card Debt
Pay the Piper
Credit card debt can be overwhelming. As interest accrues, your balances may keep increasing even if you’re...
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Active vs. Index Investing
Pick Sides
Active and index investing are two different ways of choosing individual investments. With active investing, investors try...
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FICO vs. VantageScore
Settle the Score
FICO and VantageScore are two of the most common credit scoring models. Contrary to popular belief, you...
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Estate Tax
Death and Taxes
An estate tax is an amount that may be paid from your assets to the government after...
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Growth vs. Value Investing
Moves Like Buffett
Growth and value investing are two different approaches to investing in stocks. Growth investors aim to invest...
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P/E Ratio
At Any Price
The price-to-earnings ratio (or P/E ratio) is a way to evaluate whether a company’s stock is cheap,...
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Term vs. Permanent Life Insurance
Life Sentence
Term and permanent policies are the two main types of life insurance. With both types of policies,...
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Quantitative Easing
Easy Money
Quantitative easing is when the Fed (or another country’s central bank) buys up large amounts of bonds....
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Technical Analysis
Off the Charts
Technical analysis means using stock price charts to try to predict future stock price movements. It involves...
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HMO vs. PPO
Bill of Health
HMOs and PPOs are two different types of health insurance plans. HMO (or Health Maintenance Organization) plans...
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Sticking to a Budget
In It to Win It
Budgeting can be a lot like dieting. You start out with big hopes for dramatic changes in...
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Paying Off Student Loans
Take a Load Off
It might seem like there’s only one way to pay down your student loans (namely: slowly, painfully,...
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Paying For Retirement
Into the Sunset
Retirement may seem like an abstract, far-off goal (unless you’re already independently wealthy or a 401(k) ninja,...
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Invisible Hand
Helping Hand
The “invisible hand” is an economic theory developed by Adam Smith. It proposes that when people act...
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Game Theory
Roll the Dice
Game theory is an economic model for predicting people’s decisions in tricky situations.
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Financial Aid
Lean on Me
Financial aid can refer to any of a number of types of assistance that help students afford...
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Filing for Unemployment
Pink Slip
Unemployment insurance is a government program that gives you money if you lose your job. Sometimes, life...
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ESG Investing
Do the Right Thing
ESG investing means investing in companies that do good (or at least don’t actively do harm). With...
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Credit
Permanent Record
Credit is, simply put, your financial reputation. Your credit history describes your record as a borrower, including...
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Business Plan
Best-Laid Plans
A business plan is a document that outlines your vision for your business. It describes your big-picture...
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Paying Down Debt
Get Low
Paying down debt can make you more financially secure and give you more flexibility when deciding what...
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Venture Capital
Nothing Ventured, Nothing Gained
Venture capital (or “VC” for short) is a type of financing for startup companies. Venture capitalists invest...
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Target-Date Funds
Bullseye on Retirement
A target-date fund is an investment fund that’s based on your expected retirement date. These mutual funds...
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Fiscal vs. Monetary Policy
Tax and Spend
Fiscal and monetary policy are two tools the U.S. government can use to help the economy stay...
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Market Capitalization
Size it Up
Market capitalization (or just “market cap”) is a measure of a company’s total value. If you ever...
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Recession Shapes
Give Me a V
A recession is an economic downturn that lasts for at least several months and ripples throughout the...
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Medicare
Free for All
Medicare is a health insurance program for retirees that is sponsored by the federal government. It is...
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Campaign Finance
Follow the Money
Campaign finance describes the way political candidates raise and spend money to run for office.
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Income Taxes
Pay the Piper
Personal income tax is money the government collects from people based on how much they earned or...
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SBA Loans
Helping Hand
SBA-guaranteed loans (or just “SBA loans”) are business loans backed by the U.S. Small Business Administration (SBA)....
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Volatility
Rocky Road
Volatility describes how much an investment bounces around in price. More volatile investments zigzag in price more...
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Rollovers
Roll With It
A rollover is when you move funds from one retirement account into another, such as from a...
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Partnerships
Passing Through
If you’re starting a business with someone else (or multiple people), the partnership is the most basic...
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Valuing a Company
What’s it Worth?
A company’s value is the dollar figure that it might sell for if a person or another...
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Hard vs. Soft Credit Inquiries
Extra Credit
Banks, lenders, and others use your credit report and scores to determine your creditworthiness. In other words,...
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Incorporating
Limited Liability
A corporation is one type of formal business structure that entrepreneurs can choose to use when starting...
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Estimated Taxes
Four Times the Fun
Estimated taxes are payments to the government that some people have to make four times a year....
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Buying a Home
Happy Homeowner, Happy Life
Buying a house is one of the biggest steps you can take in your life. But it’s...
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Futures
Looking Ahead
A futures contract is an agreement to buy a specific investment at an agreed-upon price on an...
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Forex
Hard Currency
The foreign exchange, or forex, markets are where investors go to buy and sell currencies. Unlike the...
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NFTs
(Not So) Real World
An NFT, or non-fungible token, is a code that says you own a unique digital item.
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FHA Loans
Helping Hand
FHA loans are a type of mortgage loan that’s available to people who might not qualify for...
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Balance Transfers
Shell Game
Balance transfers are a way to move what you owe on one (or more) credit cards and...
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Retirement Savings for Contractors
Squirrel Away
If you’re a contractor, saving for retirement can be much more complicated than it is for employees....
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FSAs vs. HSAs
Health is Wealth
Health care FSAs and HSAs let you save money for out-of-pocket medical expenses (basically the things your...
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Asset Classes
Building Blocks
An asset class is a group of similar kinds of investments. It’s a generalization, not a detailed...
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Financial Advisors
Get Some Help
Financial advisors are experts who can provide financial advice and help you manage your money. Some people...
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Financial Planning
Ducks in a Row
Financial planning describes the process of mastering your money. It means figuring out where you actually are...
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Taxes for Contractors
Welcome to the Gig Economy
A contractor, or freelancer, can be anyone who works for clients on a contract basis rather than...
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E-Filing
Signed, Sealed, Delivered
E-filing means filing your taxes online. You’ll still need all the same documents you’d use to file...
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Asset Allocation
Divide and Conquer
“Asset allocation” is a way of describing what you own in percentage terms. If you’ve got $1,000...
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What Is an ICO?
The Wild West of Finance
An ICO, or Initial Coin Offering, is a way for startups to raise money by inventing and...
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IRA vs. 401(k)
Nest Eggs
IRAs and 401(k)s are two popular types of retirement savings accounts. Most people who work in the...
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Entrepreneurship
Change the World
Entrepreneurship is building a new business from the ground up. It means coming up with an idea...
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Budget
Nickels and Dimes
A budget is a plan you can use to better manage your spending and saving. When you...
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Debt
It All Adds Up
Debt is money that you owe to another person or a financial institution. When you borrow money,...
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Inflation
On the Up and Up
Inflation is when prices of things rise over time. For example, in 1980 you could buy a...
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Credit Cards
Swipe Right
A credit card lets you buy now and pay later, all without the hassle of counting out...
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Banks
Bank on It
Banks are institutions that take deposits, cash checks, and make loans. They are essentially home bases for...
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Tax Deductions
Cut Rate
Tax deductions, such as for donations to charity or interest on student loans, are amounts that you...
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Diversification
Spread Your Bets
Diversification is the practice of dividing your money among lots of different types of investments. It’s the...
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Tariffs
Barriers to Entry
A tariff is a tax charged on goods coming into or out of a country. When a...
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Cryptocurrency
Tales of the Crypto
Cryptocurrency is digital money that can be sent electronically anywhere in the world.
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Rebalancing
Move Your Assets
Know how self-help gurus are always talking about “finding the balance” in your personal life? That same...
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Apple
The Big Apple
Apple was the first business in history to be valued at $1 trillion—the largest value ever recorded...
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Revocable vs. Irrevocable Trusts
In Good Hands
A trust is a legal agreement allowing one person to transfer their assets to someone else via...
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Kylie Jenner
Lifestyles of the Rich and Famous
When it comes to money moves, Kylie Jenner knows what’s up. A Forbes profile of the youngest...
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Bitcoin
Not So Silky Road
Bitcoin is the world’s first type of digital money, or cryptocurrency. Unlike traditional paper money, Bitcoin only...
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Bull or Bear Market
Into the Wild
Wall Street may be a bit of a rodeo, but there are no literal bulls or bears....
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529 Plan
Higher Ed, Higher Returns
A 529 plan is a tax-advantaged college savings account sponsored by a state government or education institution....
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Savings
One Penny at a Time
Savings are funds that you put aside and don’t spend. Life can be full of surprises, both...
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Compound Interest
Make Bank
The most powerful force in the universe is compound interest. — Albert Einstein
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Interest
Pay Up
Interest is the cost of borrowing money. For a borrower, interest is the price of taking on...
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GDP
Grossly Underrated
Gross domestic product, or GDP, measures the size of an economy. In essence, it puts a dollar...
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Break-Even Point
Point Break
A company is at its break-even point when its revenue equals its expenses. It is neither making...
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IRR
Crunch the Numbers
The internal rate of return, or IRR, is a measure of an investment’s or a project’s profitability....
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Private Equity
Members Only
Private equity is money invested directly into a private company. Private equity funds pool money from many...
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Financial Statements
State of Affairs
Financial statements are reports a company puts together to measure how it’s doing. Companies create their financial...
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Crowdfunding
Pound the Pavement
Crowdfunding is a way to raise money from many people, thanks to the power of the Internet....
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Robo-Advisor
Autopilot
A robo-advisor is an investment management company that uses a computer program instead of a live human...
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Long Term Care Insurance
Senior Moment
Long-term care insurance is a policy that helps cover the cost of assistance with daily activities if...
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Yield
Make Coin
Yield is the earnings generated by an investment over a specific period of time, expressed as a...
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Municipal Bonds
One for the Road
A municipal bond, or muni bond, is a type of bond issued by a state or local...
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Audit
Just Checking In
An audit can refer to any kind of official inspection of financial statements—usually to make sure that...
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Charitable Remainder Trusts
Big Love
A charitable remainder trust is a financial tool that can provide a steady source of income while...
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Layaway
Bill Me
Layaway lets you spread out payments over time when you buy something. Buyers often use it for...
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Profit and Loss (P&L)
The Bottom Line
A profit and loss statement, or income statement, shows the money a company earned and what it...
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Remittance
Check’s in the Mail
Remittances, also known as remittance transfers or international wires, are when someone in one country sends money...
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Tax Loss Harvesting
Cut Your Losses
Tax loss harvesting is a trading strategy investors can use to try to reduce their taxes. It’s...
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Collateral
Give and Take
Collateral is something that a borrower pledges to a lender to secure certain types of loans. If...
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Overhead
Keep the Lights On
Overhead refers to the expenses a business must pay just to stay open. Also known as “indirect...
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Capital Gains Tax
The Taxman Cometh
If something you own goes up in value and you sell it, then you’ve made a profit....
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Carried Interest
In the Interest Of
Carried interest is a share of a private equity or hedge fund’s profits that is paid to...
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Tax Form 1040
Any Way, Shape, or Form
The IRS’s Form 1040 is the master form that most people use to file their tax returns...
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Wills
For Love or Money
A Last Will and Testament, or “will” for short, is a legal document that lets you transfer...
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Blockchain
Chain Gang
Blockchain is the recordkeeping technology that serves as the foundation for Bitcoin and some other types of...
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Saving for College
Pay Your Dues
Saving for college means setting aside funds for education expenses. It means making a dedicated investment in...
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APR
Another Day, Another Dollar
An annual percentage rate (APR) represents the annual cost of borrowing money, including fees. Because the APR...
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The S&P
Make the Market
The Standard & Poor’s 500 Index—also known as the S&P 500, or just the S&P—is an index...
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Business Insurance
Cover Your Bases
A business insurance policy is a contract between an insurance company and a business. In exchange for...
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Bankruptcy
Lose Your Shirt
Bankruptcy is the legal process for consumers or businesses to get help with their debt. Bankruptcy starts...
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Dividends
Show Me the Money
A dividend is a portion of a company’s profits that is paid to its shareholders in the...
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Options
Coming Attractions
An option is the right, but not obligation, to buy or sell an investment at a specific...
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Title Insurance
On the House
A “title” is a document listing the legal owner of a piece of property. Title insurance protects...
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Rent vs. Buy
Where the Heart Is
The choice between renting or buying a home may be one of the biggest decisions you make...
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Recession
Feel the Pinch
A recession refers to a time when the economy shrinks instead of grows. More specifically, economists typically...
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EPS
Bang for the Buck
Earnings per share (EPS) is a financial metric that helps investors evaluate a company’s profitability. It’s calculated...
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Estate Planning
Bite the Dust
Estate planning is the process of figuring out what will happen to your stuff after you die....
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Index Funds
Copy That
An index fund is a professionally managed collection of stocks, bonds, or other investments that tries to...
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Foreclosure
Bottom Dollar
Foreclosure is a legal process that lets a lender seize possession of a house or other real...
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FICO
Score Some Points
Although you might hear the phrase “your credit score” tossed around, you actually have multiple credit scores—potentially...
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Car Insurance
Tighten Your (Seat) Belt
Car insurance is an agreement between you and an insurance provider. In exchange for regular payments from...
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Prepaid Card
Top Off
A prepaid card lets you spend money that you’ve already added to the card. It’s similar to...
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Reverse Mortgage
Can’t Take it With You
A reverse mortgage is exactly what it sounds like: instead of paying down a mortgage balance every...
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Deductibles
Cut Rate
A deductible is the amount of money you must spend out of pocket before your insurance company...
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Fixed vs. Variable Costs
At All Costs
Fixed and variable costs are types of expenses that businesses pay in order to operate.
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Convertible Note
Take Note
A convertible note is a type of short-term loan for a business. However, instead of being repaid...
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Equity
Own It
Equity is ownership. You can have equity—or an ownership stake—in any asset, meaning anything of value.
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Tax Refunds
Check’s in the Mail
If you pay more than your fair share in taxes over the course of a year, you’re...
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Liquidity
Cashing Out
Liquidity refers to how easily you can sell an investment or asset at a fair price.
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ROI
Many Happy Returns
Return on investment, or ROI, is a ratio for measuring the profitability of an investment. It puts...
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Improving Credit
Extra Credit
Your credit report and credit scores describe whether you have a good track record of repaying borrowed...
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IPO
Opening Bell
An IPO, or initial public offering, is when a company’s shares start trading on a stock exchange...
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Mutual Funds
Join Forces
A mutual fund is a professionally managed fund that pools lots of investors’ money in order to...
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Interest Rate
At Any Rate
Interest is what a lender charges you to borrow money. It is usually expressed as a percentage...
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Balance Sheet
Cook the Books
A balance sheet is a snapshot of financial health, showing what a company or person owns and...
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Risk vs. Reward
Double Down
All investments come with risk. With financial investments, risk is usually tied to reward. That means investments...
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Bonds
Bonds, James Bonds
Bonds are essentially IOUs. When you buy a bond, you become a lender to whatever entity issued...
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Rule of 72
Crunch the Numbers
The rule of 72 is an easy, back-of-the-napkin way to figure out how long it will take...
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Currency
All About the Benjamins
Currency is anything that people use to store value or trade for goods or services. Currency can...
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Philanthropy
Greater Good
Philanthropy is giving back. It’s paying forward the resources you have—whether your money, or physical goods, or...
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Commodities
Back to Basics
Commodities are raw materials. They are the inputs, or ingredients, that are used to make most of...
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Amortization
Another Day, Another Dollar
Amortization is a way of paying off a debt by spreading payments over a period of time....
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Fiduciary Duty
Your Best Interest
A fiduciary duty is a legal obligation to act in another person’s best interest.
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Economies of Scale
The Bigger, the Better
Economies of scale occur when it’s cheaper to produce a lot of something than it is to...
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Trustee
Handle With Care
A trustee can be an institution or an individual that is given the power to manage and...
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Judgments
By the Book
A judgment is a decision made by a court that’s been entered into the public record (i.e.,...
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Hedge Funds
Hedge Your Bets
Hedge funds are investment funds that pool many investors’ money and then hire one or more professional...
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Refinancing
Cash in Your Chips
Refinancing is getting a new loan to replace an old one. Borrowers usually refinance in order to...
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Loans
Lend a Hand
A loan is when someone gives money to someone else in exchange for future repayment of that...
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EBITDA
How You Slice It
EBITDA (pronounced “ee-bit-tah”) stands for “earnings before interest, taxes, depreciation, and amortization.” It’s one measure of a...
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Escrow
In Good Hands
Escrow is an arrangement in which a trusted third party temporarily holds onto some kind of asset,...
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Building Credit
Bit by Bit
Credit is money that’s available to you to borrow whether through a credit card, mortgage, car loan,...
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Profit Margin
Margin of Error
A company’s profit margin measures the portion of its total sales that it gets to keep as...
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Buy vs. Lease a Car
Joy Ride
When you need a car, you have two options: buy or lease. If you buy a car,...
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Investing in Gold
Worth its Weight
Gold is a precious metal that’s used in everything from jewelry and artwork to industrial goods and...
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The Stock Market
Greed Is Good
The stock market is the collection of physical and electronic markets where buyers and sellers come together...
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CDs
On Principal
Certificates of Deposit, or CDs, are low-risk investments that pay interest. You can think of them as...
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Financing a Start-up
Sink or Swim
If you’re trying to get a start-up off the ground, chances are you’ll need some cash to...
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Annuities
Nest Egg
An annuity is a series of regular payments made over a set period of time. Annuities can...
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REITs
Take Stock
A real estate investment trust, or REIT, is a company that owns, manages, or finances real estate....
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Appraisal
For All it’s Worth
An appraisal is an estimate of how much something is worth. People may get appraisals for real...
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Power of Attorney
More Power to You
A power of attorney is a document you can create if you want to give someone else...
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Short Selling
The Big Short
Short selling is a way to bet that a stock will fall in price. Normally, an investor...
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Liability
Much Obliged
A liability is something that will require you (or a company) to spend money or resources in...
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Mortgages
Home Sweet Home
A mortgage is a type of loan that people use to help them buy a house or...
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1099 vs. W-2 Employee
Bring Home the Bacon
1099s and W-2s are both types of tax forms. If you’re a contractor, you should receive one...
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Form W-2
Company Man
The W-2 is a tax form your employer must complete at the start of each year to...
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Insurance
Cover Your Assets
Insurance is financial protection. Along with your emergency fund, insurance makes up your safety net so that...
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Social Security
Safety Net
Social Security is a government program that takes in taxpayer dollars and pays out benefits to older...
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Tax Returns
Not-So-Happy Returns
Most people pay taxes throughout the year. When you file a tax return, you calculate how much...
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The Fed
Making a Federal Case
The Fed is the central bank of the U.S. Its overarching role is to make sure that...
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Trusts
Pennies From Heaven
A trust is a legal document that allows a person (the trustee) to hold the assets of...
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Investing
Piece of the Pie
Investing is putting your money to work in the hopes of earning a return. You probably already...
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Opportunity Cost
Fork in the Road
Opportunity cost is the return or benefit you miss out on by choosing one option over the...
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ETFs
Jack-of-All-Trades
Exchange-traded funds (ETFs) are investment vehicles similar to mutual funds. Like mutual funds, ETFs are professionally managed...
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Student Loans
Old College Try
A student loan can be any kind of borrowed money that’s used to pay for education. Although...
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FAFSA
Aid and Abet
The Free Application for Federal Student Aid, or FAFSA, is a form that college and grad students...
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Paying for College
Higher Education, Higher Costs
Going to college can lead to better jobs and bigger paychecks. But it comes at a high...
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How to Start a Start-up
Go Big or Go Home
Although plenty of start-ups fail, the ones that succeed can do so wildly. Beyond a financial payoff,...
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Stocks
Buy Buy Buy
Stocks are pieces of ownership in companies. If you bought one stock of, say, Amazon, and Amazon...
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Independent Contractor
Free Agent
An independent contractor is someone who is self-employed and works for clients as a nonemployee. Independent contractors...
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Blue Chips
Steady Eddy
A blue chip is a company that is financially sound and well established. These companies usually sell...
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Depreciation
Wear and Tear
Depreciation is a physical asset’s loss of value over time. Just as your once new car is...
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Securities
Market Maker
“Securities” is the term used to describe stocks, bonds, mutual funds, and other types of financial investments....
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Life Insurance
Beyond the Veil
Life insurance is a contract with an insurance company. In exchange for periodic payments, the insurance company...
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Real Estate
Location, Location, Location
Buying real estate—whether on your own or by pooling your resources with other investors—is one possible way...
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