Direct Payment
A secure and confidential method of payment (for example monthly credit card) directly to the institution, using electronic fund transfer (EFT).
Discounted Rate Mortgage
A type of mortgage, usually offered to new customers, in which the interest rate is reduced for a fixed period of time.
Disposable Income
Income available after a person pays taxes, loans and buys basic goods and services.
Divest
Selling off, usually in relation to the parts of a company that are not performing well or no longer fit in with the company’s wider plans.
Dividends
Money that a company pays to its shareholders from its profits.
Donor
A person who gives something of value to a fund or an organization.
Durable Power of Attorney
A durable power of attorney differs from a traditional power of attorney in that it continues the agency relationship beyond the incapacity of the principal.
Electronic Banking
A term describing different ways to manage money without talking to a person, for example by using an ATM card or the internet.
Embezzlement
Theft or misappropriation of funds placed in one’s trust or belonging to one’s employer.
Endorsement
Writing on a document, for example the signature on a check.
Endowment
A transfer of money or property to a charity for a specific purpose.
Equity
The difference between the value of a person’s property and the amount of mortgage they still have to pay.
Escheat
The power of a state to acquire title to property for which there is no owner. The most common reason that an escheat takes place is that an individual dies intestate, meaning without a valid will indicating who is to inherit his or her property, and without relatives who are legally entitled to inherit in the absence of a will.
Estate Planning
Estate planning is the process of anticipating and arranging, during a person’s life, for the disposal of their estate. Estate planning can be used to eliminate uncertainties over the administration of a probate and to maximize the value of the estate by reducing taxes and other expenses.
Executor
A person who carries out the instructions in a will.
Expenditure
Money that a person or organization spends.
Expense Reimbursement
A method for paying employees back when they spend their own money on business-related expenses. The IRS requires an authorized plan in place before a reimbursement is made.
Federal Income Tax
The involuntary fee levied on individuals’ income by the federal government. All wages are subject to Federal Income Tax, however ministers do not have to pay Federal Income Tax on properly authorized and validated housing allowance.
Felony
A category of crimes that are often classified as the most serious types of offenses.
FICA (Federal Insurance Contributions Act)
Commonly known as “social security tax” ½ is paid by the employer and ½ is deducted from the employee’s pay.
Financial Adviser
Somebody who studies a person’s earnings, savings and spending and gives advice on how to manage or invest their money.
Financial Service Provider
All firms that sell financial products. This includes banks, insurance companies, credit unions, and equity/stock brokerage firms.
Financial Statement
An organization’s statement that includes the annual accounts, budget reports and balance sheet.
Financial Statements
Financial statements for businesses usually include income statements, balance sheets, statements of retained earnings and cash flows. It is standard practice for businesses to present financial statements that adhere to generally accepted accounting principles (GAAP) to maintain continuity of information and presentation across international borders.
Financial/Fiscal Year
The 12 months covered by a set of annual financial statements.
Fixed Assets
An asset that a organization intends to use for several years, such as buildings and equipment.
Fixed Cost
A cost that does not change with an increase or decrease in the amount of goods or services produced by a company or the activity of an organization. Fixed costs are expenses that have to be paid by an organization, independent of any activity or change in income.
Fixed Interest Rate
An interest rate that stays the same for a fixed time, no matter how other interest rates may go up or down.
Fixed Rate Mortgage
A type of mortgage for which a person pays a set amount of interest, so no matter how interest rates go up or down, the same monthly repayment is made.
Foreclosure
Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as collateral for the loan.
Fund Accounting
An accounting system emphasizing accountability rather than profitability, used by nonprofit organizations. In this system, a fund is a self-balancing set of accounts, segregated for specific purposes.
GAAP (Generally Accepted Accounting Practices)
A collection of rules and procedures that define accepted accounting practice; it includes broad guidelines as well as detailed procedures.
Gross Negligence
A legal concept that means serious carelessness.
Gross Pay
Total pay before income taxes, FICA tax, pension, or any other deduction is made.
Guaranteed Interest Rate
An interest rate that a person can be sure they will receive on a particular savings account.
Guardian
A person who looks after and is legally responsible for someone unable to manage their own affairs, especially an incompetent or disabled person or a child whose parents have died.
Hedge Fund
A private investment fund that is open to a limited range of investors and is allowed to make more risky and short-term investments than other funds to earn as much as possible.
Heir
A person legally entitled to the property of another on that person’s death.
Home Insurance
A type of insurance that covers either the property or its contents from theft, fire, flooding or other damage.
Housing Allowance
A designated portion of a pastor’s salary (officially designated in advance of payment) for the amount actually used to provide or rent a home, not to exceed the fair market rental value of the home (including furnishings, utilities, garage, etc.).
Indemnify
Protect or insure somebody against being sued for their actions.
Indemnity
A promise to compensate someone else for loss or damage or protection from legal responsibility from a person’s actions.
Indictment
A formal charge or accusation of a serious crime.
Inflation
An increase in prices, which decreases the purchasing power of money.
Infraction
A violation or infringement of a law, agreement, or set of rules.
Insolvent
A person’s or organization’s position when they cannot pay debts when they are due for repayment.
Interest Rate
The percentage that a person receives on their savings or pays on their loan.
Intestate
Not having made a will before one dies.
Invest
To allocate money (or sometimes another resource, such as time) in the expectation of some benefit in the future. In finance, the expected future benefit from investment is a return that may consist of capital gain and/or investment income, including dividends, interest, rental income, etc.
Investment Portfolio
Includes transactions in equity securities, such as common stock, and debt securities, such as banknotes, bonds, and debentures. Portfolio investments are passive investments, as they do not entail active management or control of the issuing company.
Irrevocable Living Trust
A trust that can’t be revoked and that takes effect during the life of the grantor. Usually made to transfer wealth, protect assets, or reduce taxes.
Joint Account
A bank account held by more than one person.
Joint Tenancy
A type of shared ownership of property, where each owner has an undivided interest in the property. This type of ownership creates a right of survivorship, which means that when one owner dies, the other owners absorb the deceased owner’s interest.
Junk Bond
A stock that is issued by a company with a poor financial record to help it repay its debts and that carries a higher risk than other bonds but offers higher returns.
Legacy
Money or property left in a will.
Liabilities
Debts that a person or organization owes.
Lien
A right to keep something owned by someone who owes a debt until the person has repaid the debt.
Liquidity
The ability to convert an asset to cash easily and quickly with little or no loss of value.
Living Will
A written statement detailing a person’s desires regarding their medical treatment in circumstances in which they are no longer able to express informed consent. (See also Advance Directive.)
Malpractice
Improper, illegal, or negligent professional activity or treatment by someone considered a professional (physician, lawyer, public official, minister, or counselor).