MoneyU Glossary of Terms


MoneyU Glossary of Terms


Browse the glossary using this index

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P

Past Due

The status of an account when the minimum payment has not been received by the due date.

Pay Yourself First (PYF)

Disciplined saving or setting aside money as a regular part of the budget for later spending or investing.

Payable On Death

Designation on assets such as bank accounts that indicates who is to receive the asset upon the death of the principal. Often designated as POD or TOD (transfer on death).

Payment method

The means of settling a financial obligation, such as by cash, check, credit card, debit card, smart card, or stored value card.

Payroll deductions

Amounts subtracted from gross income that are withheld by an employer for items such as taxes and employee benefits.

Pension Plan

A type of retirement plan, usually tax exempt, wherein an employer makes contributions toward a pool of funds set aside for an employee's future benefit. The pool of funds is then invested on the employee's behalf, allowing the employee to receive benefits upon retirement. There are two main types of pension plans: defined-benefit plans and defined-contribution plans.

Periodic Rate

The interest rate described in relation to a specific amount of time. For example, the monthly periodic rate is the cost of credit per month; the daily periodic rate is the cost of credit per day.

Permanent Life Insurance

A term for a variety of plans that combine a death benefit similar to a term life insurance plan with tax-sheltered savings arrangements. Permanent life insurance policies are meant to be held and paid into for your entire life. Therefore, it costs more to set up the policy. (Also called cash value insurance.)

Personal Budget

A planning tool that lays out in simple and concise terms how much you earn and spend each month. For example, you may decide to spend $1,000 and save $200 from your monthly after-tax income of $1,200. You can do a personal budget for the entire household. As part of the budgeting process, you want to save for several months of emergency, or rainy day, expenses. These are funds you can live on for three to six months in the event of an emergency. Part of setting up a personal budget is using it to compare to your actual spending. If you actually spend $1,100 a month and save only $100, you either need to discipline your spending, or adjust your budget to more realistic circumstances.

Personal Cash Flow

The difference in cash inflows and outflows over a period of time. Calculating your personal cash flow is an essential part of personal budgeting. Cash inflows include salary and other sources of cash-based income. Non-cash compensation is excluded, and you should deduct any contributions to a retirement account. Cash outflows include bill payments, including mortgage or rent, living expenses, utilities, and repayment of debt. Personal cash flow is usually measured over a monthly period.

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