MoneyU Glossary of Terms

MoneyU Glossary of Terms

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Take Home Pay

The amount of money you earn after all deductions.

Tax credit

An amount that a taxpayer who meets certain criteria can subtract from tax owed. Examples include a credit for earned income below a certain limit and for qualified post-secondary school expenses. (See Tax deduction and Tax exemption.)

Tax deduction

An expense that a taxpayer can subtract from taxable income. Examples include deductions for home mortgage interest and for charitable gifts. (See Tax credit and Tax exemption.)

Tax exemption

Earnings, such as interest from municipal bonds, that are free of certain taxes. (See Tax credit and Tax deduction.)

Tax-Deferred Earnings (Investment)

Earnings on which taxes are not paid until a future date, usually when funds are withdrawn. The TSP and traditional IRAs are examples of vehicles that offer tax-deferred earnings.

Tax-Exempt Earnings

Earnings on which taxes are never paid. Roth IRAs and municipal bonds are examples of vehicles that offer tax-exempt earnings.

Taxable Income

Any money you earn or receive - such as salary, bonuses or interest from investments - that can be taxed by the Federal, state, or local government.


A compulsory payment by individuals/organizations to the government; fees placed on income, prop­erty, or goods to support government programs.

Tenancy By The Entireties

Very similar to joint tenancy with right of survivorship. This form of ownership can exist only between married couples. It is not available in all states. It prevents the creditors of one spouse from taking one-half of the property to settle a debt.

Tenancy In Common

Ownership by more than one person so that when one owner dies, his or her ownership share passes to the person's heirs or beneficiaries, and not automatically to other tenants. Compare to joint tenancy with right of survivorship and tenancy by the entireties.

Term Life Insurance

A life insurance policy that provides a specified benefit upon the insurance holder's death, if the death occurs within a certain specified time period.

Testamentary Trust

A trust that is established by will. Compare to living trust.


The person who writes and signs a will.


Feminine form of testator.

Time value of money

The relationship between time, money, and rate of return (interest), and their effect on earnings growth. The more time, money, and rate of interest, the more money yielded at the end of a period of time.

Totten Trust

A savings account that allows the depositor to open the account as trustee for someone else (no real trust is set up). Account owners may use the funds as they see fit during their lifetime, and then upon their death the account balance is paid to the named beneficiary.


An exchange of one thing in return for another; especially relinquishment of one benefit or advantage for another regarded as more desirable.

Transaction Date

The date a purchase is made or cash is withdrawn. Some companies assess interest from the transaction date, others from the posting date.

Transaction Fee

An extra charge for various credit activities, such as using an ATM or receiving a cash advance.

Transaction, Settlement, Or Closing Costs

Fees associated with taking ownership of property. They may include application fees; title examination, abstract of title, title insurance, and property survey fees; fees for preparing deeds, mortgages, and settlement documents; attorneys' fees; recording fees; and notary, appraisal, and credit report fees. Under the Real Estate Settlement Procedures Act, the borrower receives a good faith estimate of closing costs at the time of application or within three days of application. The good faith estimate lists each expected cost either as an amount or a range.

Transfer On Death

See payable on death.

True Cost

The actual cost of something, as compared to what you think it will cost. For example, the ÔÇ£true costÔÇØ of a car does not just include the price you paid for the car, but also for things like gasoline, maintenance, repairs, auto insurance, etc. ItÔÇÖs important to determine the true cost of an item before you actually purchase it.


The person who receives legal title to the assets in the trust but is legally obligated to hold, manage, and invest the trust assets for the benefit of the beneficiaries. The trustee's duties are set by the trust agreement and by law. Trustees who fail in their fiduciary duties can be sued and may be held liable for their actions and damages.

Truth in Lending Act

The Truth in Lending Act seeks to tell U.S. consumers important information about credit terms that can help them make informed credit choices and should protect them against inaccurate and unfair billing practices. The Truth in Lending Act was amended by, and includes, the Fair Credit Billing Act (see Dispute).

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