MoneyU Glossary of Terms

MoneyU Glossary of Terms

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Money you make for working a job.

Sales Tax

What your state or local government charges you when you buy a good or service. It's typically a percentage of the cost you pay. While an income tax charges the money you earn, the sales tax charges money you've spent. States that charge sales tax typically charge 4 to 7 percent of the item's cost.


Accumulating funds by delaying or foregoing consumption.

Savings Account

With savings accounts you can make withdrawals, but you do not have the flexibility of checks. Various fees, such as minimum balance fees, may be charged on savings accounts.

Savings Bond

A promise by the U.S. government to repay principal and a return in the future. The return may be based on government note rates or on the rate of inflation plus a small fixed rate. Savings bonds are available for as little as $25.


An economic condition created by an excess of human wants over the resources necessary to sat┬¡isfy them; an inability to satisfy all of everyoneÔÇÖs wants.

Secured Card

A credit card that is guaranteed by a cash deposit held in a special savings account or certificate of deposit. The deposit must remain in the account until the credit line is closed or the issuer decides security is no longer necessary. The credit line on the card is usually equal to the amount of the deposit. If the Cardmember defaults on the card, the issuer will apply the deposit toward the outstanding balance.

Secured Debt

Debt for which repayment is guaranteed through collateral property of equal or greater value than the amount of the loan. If you do not repay the loan, the issuer may take possession of the collateral. Collateral may be an asset such as a car or a home or, in the case of a secured credit card, a cash deposit held by the issuer. For example, a mortgage is a secured debt in which the home is collateral. If the person fails to repay the loan, the bank may take the home as payment.


Savings, bonds, insurance policies, jewelry, property or other items that are pledged to pay off a loan or other debt if payments are not made according to the agreement. (Also called Collateral.)


Twice a year.

SET Protocol

Secure Electronic Transaction protocol, an encryption technology designed to allow secure electronic transactions between card issuers, merchants and consumers. Unsecured information sent over the Internet can be intercepted. When making purchases online, you should consider a secure browser that complies with industry standards, such as secure sockets layer (SSL) or secure hypertext transfer protocol (S-HTTP). These often are included with Internet connection services.


Same as grantor.

Share Purchase Plans

An arrangement in which you can buy stock directly from a corporation, usually at a lower cost and for lower amounts than through a brokerage firm. If the stock pays a dividend, reinvestment is offered. This is similar to a DRIP, but this arrangement allows you to buy your first share directly.

Shipping and Handling

The costs of processing and transporting a product to a customer.

Signs of Trouble

Situations or events that suggest you may be having financial difficulty. For example, a sign of trouble could be that you use your credit card to pay for groceries because you have no money in your checking or savings account. Other signs of trouble include paying only the minimum due on your credit cards, using one credit card to pay the monthly minimum on another card and routinely having "maxed out" credit cards.

Simple interest

Interest calculated periodically on loan principal or investment principal only, not on previously earned interest.

Smart Card

A card containing a Central Processing Unit (CPU) that stores and secures information and makes decisions, as required by the card issuer's specific application needs.

Social security

The federal governmentÔÇÖs basic program for providing income when earnings are reduced or stopped because of retirement, or disability. Income is also provided to families when the working parent(s) dies and underage children are a part of the family.

Social Security Taxes

Social Security taxes are paid to Old Age Survivors and Disability Insurance (OASDI) and Medicare. For 2006, employee and employer each pay 7.65% of the first $94,200 of the employee's salary as Social Security taxes. For any additional income, employee and employer each pay 1.45% to Medicare. Self-employed persons pay 15.3% of their first $94,200 in salary to Social Security taxes in 2006. For higher incomes, they pay 2.9% to Medicare.

Spending Plan

A budget you use to track your income and expenses.

Springing Power Of Attorney

A power of attorney that takes effect at a predetermined time or at a particular event (such as disability).

State Unemployment and Disability (SUI/SDI)

Certain states require employees to contribute to this program, which pays benefits to people who are unemployed or currently unable to perform their job.

Step-Up CD

A certificate of deposit that benefits the investor if interest rates go up. You are allowed to adjust the rate on your CD (to a higher market rate) one time during the CD's term.


An investment that represents shares of ownership of the assets and earnings of a corporation.


Securities representing equity ownership in a corporation.


The quantities of an item that producers are willing and able to make available for sale at various prices over a given time period.

Systematic Risk

Risk that the overall market will decline as prices and interest rates change.

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