A–Z of money

The timing and movement of money coming in and going out. A positive monthly total can still hide a shortage before payday.

Interest calculated on a balance that includes previously added interest. The result depends on the rate and how often compounding happens.

Money set aside for unexpected costs or an interruption to income. Also called a cash buffer or emergency reserve.

A broad increase in prices over time, which reduces what a given amount of money can buy.

How readily an asset can be turned into spendable money. Being easy to sell does not mean its value cannot fall.

An amount expressed in money without adjusting for changes in purchasing power.

What an amount of money can buy. It changes when the prices of goods and services change.

A charge that repeats, for example each month or year. It may be fixed or calculated as a percentage.

Income available after deductions such as tax. Use the amount you actually receive when building a spending plan.

The length of time before you expect to need the money for a particular purpose.