Annual percentage rate: the yearly cost of borrowing expressed as a percent, including interest and certain fees, so you can compare loans apples to apples.
One one-hundredth of a percent (0.01%). Finance folks use it to talk about small changes — "rates rose 25 basis points" means rates went up a quarter of a percent.
Interest earned on both your original amount and the interest you've already earned. It's the snowball effect that makes money grow faster the longer it's invested.
The drop in an asset's value over time from wear or age — a car losing value each year, for example. Businesses can also deduct depreciation on their taxes.
Optional upfront fees paid to a lender to lower your mortgage rate. One point usually costs 1% of the loan and cuts the rate by about a quarter of a percent.
Flexible spending account: a pre-tax account through work for medical expenses. Most FSAs are "use it or lose it" — unspent money disappears at year end.
Health savings account: a tax-advantaged account for medical costs tied to an HDHP. Contributions are tax-deductible, growth is tax-free, and withdrawals for medical expenses are tax-free.
Individual retirement account. A traditional IRA gives you a tax break now and taxes withdrawals in retirement; a Roth IRA taxes contributions now and lets qualified withdrawals come out tax-free.
The tax rate on your next dollar of income. A raise doesn't get "all taxed higher" — only the dollars that land in the higher bracket are taxed at that rate.
Preferred provider organization: a health plan that pays more when you use in-network doctors but still covers out-of-network care at a higher cost to you.
The original amount borrowed or invested, before interest. On a mortgage, early payments go mostly to interest, with the principal paid down over time.
Replacing an old loan with a new one, usually to get a lower rate or shorter term. Closing costs mean there's a break-even point before you actually save money.
The yearly withdrawal the IRS requires from traditional retirement accounts starting at age 73 or 75 (depending on your birth year), taxed as ordinary income.
Moving money from a traditional IRA or 401(k) into a Roth IRA. You pay income tax on the amount now, but future qualified withdrawals come out tax-free.
Life insurance that covers a set number of years. It's the cheapest way to get a large death benefit, but there's no cash value if you outlive the term.
Income tax your employer takes out of each paycheck and sends to the IRS. Too little withheld means a tax bill in April; too much means a refund of your own money.