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.

Personal finance

The principles and methods that individuals use to acquire and manage income and assets.

Personal Identification Number (PIN)

The number used as an access code to ATMs or debit machines.

Personal Representative

The person who manages the decedent's estate; interchangeable with administrator or executor.

Philanthropy

A personal or corporate interest in helping others, especially through gifts to charities or endowments to institutions.

Points

Fee paid to the lender for the loan. One point equals 1 percent of the loan amount (or $1 for every $100 of loan). Points are usually paid in cash at closing. In some cases, the money needed to pay points can be borrowed, but doing so will increase the loan amount and the total cost.

Portfolio

A collection of securities assembled for an investment goal.

Posting Date

The date that a purchase, cash advance, fee, service charge or payment is recorded on your charge or credit account.

Power Of Attorney (Poa)

A legal document allowing a person to act for another.

Pre-Approved Credit

Credit card or a line of credit that is approved based upon available data without further information supplied by the potential Cardmember.

Predatory lending

Unscrupulous actions carried out by a lender to entice, induce, and/or assist a borrower in taking a loan that carries high fees, a high interest rate, strips the borrower of equity, or places the borrower in a lower credit rated loan to the benefit of the lender.

Preferred Stock

An equity share in the ownership of a company having a higher claim than common stock. There is no guarantee that the money paid for the stock will be returned or that there will be any dividends paid. However, dividends must be paid on preferred stock before they may be paid on common. Preferred stockholders are in line ahead of common stockholders but behind creditors if the company is unable to pay its obligations.

Premiums

Monthly fees to a health insurance firm that provides you with coverage.

Prepayment

When a portion or the entire amount of the principal of a loan is paid before it is due. This will usually reduce the total amount of interest that must be paid.

Present Value

Money, expressed in today's dollars.

Previous Balance

The total balance due at the end of the last billing cycle.

Prime Rate

The interest rate banks charge for loans to their biggest and highest-rated customers. The prime rate changes based on the demand for money and the rate the U.S. Federal Reserve Bank charges to its member banks. It is used as a major economic indicator.

Principal

The amount of money you owe, not including the interest due on it.

Private

Belonging to, restricted to, or intended for an individual person.

Private Mortgage Insurance (PMI)

Protection for the lender against a loss if a borrower defaults on a loan. It is usually required for loans in which the down payment is less than 20 percent of the sales price or, in a refinancing, when the amount financed is greater than 80 percent of the appraised value.

Probate Property

Property that is subject to distribution by the probate process. The table in the Estate Planning section shows property that is subject to probate.

Promissory Note

A promissory note is a binding legal document that a borrower signs to obtain a loan. It lists your rights and responsibilities under the loan agreement, including how and when the loan must be repaid. Rights and responsibilities for credit card accounts are listed in the Cardmember Agreement.

Promissory Notes

A signed agreement promising payment of a sum of money on demand or at a specific time.

Property

The exclusive right to own, possess, enjoy, and dispose of anything of value. All property is either real or personal. Real property consists of land, buildings, and other things permanently attached to the land. Personal property consists of all property that is not real property and is either tangible or intangible. Items of tangible personal property are objects that have value in themselves, such as furniture, jewelry, cars, pets, and computers. Items of intangible personal property represent things of value, such as cash, stocks, bonds, patents, and trademarks.

Property Tax

What you pay on land you own. That applies to whether it's the house you live in or property you own with nothing on it but dirt. The tax is usually charged by your local government, which bases your property tax on what it thinks your property is worth if you decided to sell it. Property taxes are mainly used to repair roads, build schools, remove snow and perform other services in your town.

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