Personal finance glossary

The terms that show up in real US financial documents, defined for someone who has just met them — and linked to the calculator where each one does something.

Written and maintained by Víctor Gil VázquezData last verified: 08/30/2026

105 terms, written for the moment you actually need them: you are looking at a loan note, a pay stub, or a plan summary, and one word is doing more work than you expected.

Where a term has a specific legal meaning in the US that differs from its everyday sense, the definition says so — that gap is usually the reason you are here. Each entry links to the calculator or article where the term stops being a definition and starts changing a number.

Taxes

Above-the-line deduction: A deduction taken to arrive at adjusted gross income, available whether or not you itemize. Half of self-employment tax, HSA contributions, and self-employed health insurance premiums all qualify. Because they reduce AGI itself, they can also improve eligibility for other benefits that phase out with AGI.; Self-Employment Tax Calculator
Adjusted gross income (AGI): Your total income minus a specific set of adjustments taken before deductions — things like the deductible half of self-employment tax, student loan interest, and HSA contributions. AGI matters far beyond your tax bill: it is the figure that determines eligibility for many credits, deductions, and income-driven student loan payments.; Federal Income Tax Calculator
Capital gain: Profit on the sale of an asset — the sale price minus your basis. Held more than a year it is a long-term gain, taxed at preferential rates of 0%, 15%, or 20%. Held a year or less it is short-term and taxed as ordinary income.; Capital Gains Tax on Home Sale Calculator
Chained CPI: An inflation measure that accounts for consumers substituting between goods as relative prices change, so it rises slightly more slowly than standard CPI. Since 2017 the IRS uses it to index tax brackets, which means bracket thresholds creep upward more slowly than they would have under the older measure.; What Is the CPI?
Cost basis: What you paid for an asset, adjusted for things that change it — reinvested dividends, capital improvements to a property, return-of-capital distributions. Basis is subtracted from the sale price to compute the gain, so failing to track it means paying tax twice on the same dollars.; Capital Gains Tax on a Home Sale
Effective tax rate: Total tax divided by total income — what you actually paid as a share of what you earned. It is always lower than your marginal rate in a progressive system, because the lower brackets tax the first portions of your income at lower rates.; Federal Income Tax Calculator
Estimated tax: Quarterly payments covering income that has no withholding — freelance income, investment income, rental income. Generally required when you expect to owe $1,000 or more, and skipping them adds an underpayment penalty computed like interest on the shortfall.; Self-Employment Tax Calculator
Form W-4: The form telling your employer how much federal tax to withhold. It has had no allowances since 2020 — it now asks directly about multiple jobs, dependents, and other income. Updating it is the fix for withholding that is consistently too high or too low.; How to Read Your Pay Stub
Itemized deductions: The alternative to the standard deduction: adding up specific deductible expenses — state and local taxes up to the SALT cap, mortgage interest, charitable gifts, large medical costs — and deducting the total instead. Only worth doing when the total exceeds the standard deduction.; Standard Deduction vs. Itemizing in 2026
Marginal tax rate: The rate applied to your next dollar of income — the bracket you are currently in. It is not the rate you pay on everything you earn, which is the single most common misunderstanding in US taxes. A single filer with $150,000 of taxable income has a 24% marginal rate and a substantially lower effective rate.; The 2026 Tax Brackets, in Plain English
Net investment income tax (NIIT): An additional 3.8% tax on investment income above $200,000 of modified adjusted gross income for single filers, $250,000 married filing jointly. The thresholds are set in statute and have never been indexed for inflation.
Phase-out: The income range over which a credit or deduction shrinks and eventually disappears. Inside a phase-out your effective marginal rate is higher than your bracket suggests, because each extra dollar of income both gets taxed and reduces a benefit.; Child Tax Credit Calculator
Safe harbor: A payment threshold that protects you from the underpayment penalty regardless of how the year turns out. Paying at least 90% of the current year's tax, or 100% of the prior year's total (110% if prior-year AGI exceeded $150,000), generally satisfies it. The prior-year figure is the practical one for volatile income, because it is known in January.
SALT cap: The federal limit on deducting state and local taxes, which includes state income tax and property tax. The 2017 tax law capped it at $10,000; the 2025 OBBBA raised it substantially with a phase-out at higher incomes and a scheduled reversion later in the decade.; Property Tax Calculator
Section 121 exclusion: The exclusion of up to $250,000 of gain ($500,000 married filing jointly) on the sale of a primary residence, provided you owned and lived in it at least two of the five years before the sale. The amounts are fixed in statute and not inflation-indexed, so they cover a shrinking share of long-tenured gains.; Capital Gains Tax on Home Sale Calculator
Standard deduction: A flat amount subtracted from income before brackets apply, available without documenting anything. For 2026 it is $16,100 for single filers and $32,200 for married filing jointly. Since it was roughly doubled in 2017, most filers take it rather than itemizing — which quietly made the mortgage interest and charitable deductions worthless to the majority of households.; Standard Deduction vs. Itemizing in 2026
Tax credit: A dollar-for-dollar reduction of your tax bill, applied after the bracket math. A $2,000 credit saves $2,000 regardless of your bracket, which makes credits far more valuable than deductions of the same size. A refundable credit can produce a refund even when it exceeds your tax; a non-refundable one only reduces tax to zero.; Child Tax Credit Calculator
Tax deduction: A reduction in taxable income, applied before the bracket math. A $2,000 deduction saves $2,000 times your marginal rate — $440 in the 22% bracket. This is why a credit and a deduction of the same headline size are not comparable.
Use tax: The counterpart to sales tax, owed by the buyer when a seller does not collect — typically on out-of-state purchases. Rarely enforced against individuals on small items, but routinely applied to vehicles bought in one state and registered in another.; Sales Tax Calculator
Withholding: Tax your employer removes from each paycheck and sends to the government on your behalf. It is an estimate produced from your Form W-4, not your actual tax, which is why refunds and balances due exist at all.; Why Your Paycheck Withholding Isn't Your Final Tax Bill

Housing & Mortgages

Adjustable-rate mortgage (ARM): A mortgage whose rate is fixed for an initial period then adjusts periodically. Written as 5/1 or 7/6 — the first number is years fixed, the second how often it adjusts afterward. Your rate at each adjustment is a published index plus a fixed margin, subject to caps.; Fixed-Rate vs. Adjustable-Rate Mortgages
Amortization: The schedule by which a loan is repaid through equal payments split between interest and principal. Interest is front-loaded: early payments are mostly interest, which is why extra principal payments made early are worth far more than the same amount paid later.; Extra Payment Calculator
ARM caps: The limits on how far an adjustable rate can move, written as three numbers such as 2/2/5: the maximum change at the first adjustment, at each subsequent adjustment, and over the life of the loan. The payment at the lifetime cap is the number to check before signing — it is the worst case the contract permits.; Fixed-Rate vs. Adjustable-Rate Mortgages
Cash-on-cash return: Annual cash flow after debt service, divided by the cash actually invested. The metric that includes the mortgage, and the one that reveals whether leverage is helping — it only does when net yield exceeds the borrowing rate.; Rental Property ROI Calculator
Cash-out refinance: Replacing your mortgage with a larger one and taking the difference in cash. Prices above a rate-and-term refinance because lenders treat it as higher risk, and it resets your amortization schedule from the beginning.; HELOC vs. Home Equity Loan vs. Cash-Out Refi
Closing costs: The fees due at the completion of a real estate transaction — origination, appraisal, title search and insurance, recording, transfer taxes, and prepaid escrow items. Commonly 2% to 5% of the purchase price for a buyer, in cash, separate from the down payment.; Closing Costs: The Line-by-Line Breakdown
Debt-to-income ratio (DTI): Monthly debt payments as a share of gross monthly income. The front-end ratio counts housing only; the back-end ratio counts all debt. The conventional 28/36 guideline caps them at 28% and 36%, though automated underwriting approves higher with compensating factors.; How Much Income You Need for a Mortgage
Depreciation recapture: Tax owed at sale on the depreciation you claimed — or could have claimed — on a rental property, generally at up to 25%. Depreciation is a deferral with a bill attached, not a permanent exemption.; Rental Property ROI Calculator
Discount points: Prepaid interest that buys a lower rate. One point costs 1% of the loan amount. Whether it pays depends entirely on how long you keep the loan — divide the cost by the monthly saving to get the break-even in months.; Refinance Break-Even Calculator
Effective property tax rate: Annual property tax as a percentage of home value — the comparable measure across jurisdictions, since millage rates and assessment ratios differ everywhere. The US national average is roughly 0.99%, with state averages running from about 0.27% to over 2.1%.; Property Tax Calculator
Escrow account: An account your servicer maintains, collecting roughly one twelfth of your annual property tax and insurance with each payment and paying those bills on your behalf. It is why your monthly payment changes when a tax assessment or insurance premium changes, even on a fixed-rate loan.; Mortgage Calculator
Gross rental yield: Annual rent divided by purchase price. A screening number that deliberately ignores every cost of ownership — useful for sorting a long list, misleading for evaluating a specific property.; Rental Property ROI Calculator
HELOC: A home equity line of credit — a revolving line secured by your home, usually with a variable rate tied to prime. A draw period of interest-only payments is followed by a repayment period where payments often double or more.; HELOC Calculator
Homestead exemption: A reduction in the assessed value of a primary residence for property tax purposes, offered by most states. Rules and amounts vary widely, and additional exemptions commonly exist for people over 65, veterans, and those with disabilities.; Property Tax Calculator
Loan-to-value ratio (LTV): The loan amount divided by the property value. It drives whether PMI is required and is one of the largest inputs to your interest rate — crossing an LTV pricing band can change a quote meaningfully.; How Much House Can I Afford?
Net rental yield: Annual rent minus operating expenses, divided by total acquisition cost. Excludes the mortgage, because it measures the property rather than your financing. For a typical US single-family rental it commonly lands near half the gross figure.; Gross vs. Net Rental Yield
PITI: Principal, Interest, Taxes, and Insurance — the four components of a typical escrowed mortgage payment. Quoting a "mortgage payment" as principal and interest alone understates the real monthly cost by hundreds of dollars in most markets.; Mortgage Calculator
Price-to-rent ratio: Home price divided by annual rent for a comparable property. Low ratios favor buying, high ratios favor renting. It varies enormously between US metros, which is why national rent-versus-buy conclusions are close to meaningless.; Rent vs. Buy Calculator
Private mortgage insurance (PMI): Insurance protecting the lender, required on most conventional loans with less than 20% down. You pay it and receive nothing from it. Under the Homeowners Protection Act it must be cancelled automatically at 78% of original value and on request at 80%.; PMI: How to Get Rid of It Sooner
Recast: Reamortizing a mortgage after a large principal payment, spreading the reduced balance over the remaining term to lower the monthly payment. Different from a refinance: same loan, same rate, usually a modest fee. Servicers default to keeping the payment and shortening the term unless you ask.; Extra Payment Calculator

Loans & Credit

APR: Annual percentage rate — the interest rate plus origination fees and other finance charges, annualized across the loan term. Required to be disclosed under the Truth in Lending Act precisely so that offers with different fee structures can be compared.; What's the Difference Between Interest Rate and APR?
APY: Annual percentage yield — the savings-side counterpart to APR. It accounts for compounding rather than fees, which is why a 5% APY deposit and a 5% APR loan are not describing the same arithmetic.
Credit utilization: Your revolving balances as a percentage of your total credit limits. One of the largest inputs to a credit score, and one of the few that responds within a month — paying a balance down before the statement date can move a score quickly.; What Lenders See When They Pull Your Credit
Debt avalanche: Paying minimums on everything and directing extra money to the highest-rate debt first. Mathematically optimal — it minimizes total interest — but slower to produce a visible win than the snowball.; Debt Payoff Calculator
Debt snowball: Paying minimums on everything and directing extra money to the smallest balance first. Costs more in interest than the avalanche and finishes more plans in practice, because clearing an account entirely is a stronger motivator than a slightly lower interest total.; Debt Payoff Calculator
Hard inquiry: A credit check tied to an application, visible to other lenders and mildly negative for a score. Multiple inquiries for the same loan type within a short window — commonly 14 to 45 days — count as one, specifically so comparison shopping is not penalized.; What Lenders See When They Pull Your Credit
Income-driven repayment (IDR): Federal student loan plans that set payments from income rather than balance. Older plans use discretionary income — AGI minus a multiple of the poverty guideline — while RAP applies a percentage to full AGI in income bands.; Student Loan RAP Calculator
Minimum payment: The smallest amount a credit card issuer will accept, typically a small percentage of the balance plus interest and fees. Because it shrinks as the balance does, paying only the minimum stretches repayment over years and can more than double what you pay.; Paying the Minimum on Your Credit Card
Money factor: The finance charge on a car lease, quoted as a small decimal rather than a rate. Multiply by 2,400 for the approximate APR — a money factor of 0.00250 is about 6%. Dealers are not required to present it as a percentage.; Buying, Financing, or Leasing a Car
Negative equity: Owing more on an asset than it is worth, also called being underwater. Common on long auto loans with small down payments, because depreciation outpaces principal reduction in the early years.; True Cost of Car Ownership Calculator
Origination fee: A lender charge for making the loan, commonly 1% to 8% on personal loans. Usually deducted from the disbursement, so a $10,000 loan with a 5% fee puts $9,500 in your account while you owe interest on $10,000.; Personal Loan Calculator
Precomputed interest: A loan structure where total interest is calculated up front for the full term and built into the balance. Paying early saves much less than on a simple-interest loan, which makes it functionally similar to a prepayment penalty without being called one.
Prepayment penalty: A fee for paying a loan off early. On mortgages these are heavily restricted — permitted only on certain fixed-rate qualified mortgages, capped, and limited to the first three years, and prohibited on FHA, VA, and USDA loans. Auto and personal loans vary by contract and state.; Does Paying Off Your Loan Early Actually Pay Off?
Repayment Assistance Plan (RAP): The income-driven repayment plan created by the 2025 OBBBA, effective July 1, 2026, and the only IDR option for federal loans disbursed on or after that date. Payments run from a $10 monthly floor to 10% of AGI, less $50 per dependent, and the government covers any unpaid interest so the balance always shrinks.; RAP Replaced Your Student Loan Plan. Now What?
Residual value: What a lender projects a leased vehicle will be worth at lease end. Set by the lender and not negotiable, and the reason a high-residual car leases cheaply even at a high sticker price — you are only financing the depreciation.; True Cost of Car Ownership Calculator
Simple interest loan: A loan where interest accrues on the outstanding balance each period, so paying down principal early genuinely reduces future interest. Most US mortgages and many auto loans work this way.; Extra Payment Calculator
Soft inquiry: A credit check that does not affect your score — prequalification offers, your own credit checks, and account reviews by existing creditors. Most lenders now prequalify with a soft pull, which means shopping rates costs nothing.

Investing

CAGR: Compound annual growth rate — the constant annual rate that would take an investment from its starting value to its ending value. It expresses a volatile real-world return as one smooth number, which is useful for comparison and misleading about the ride.; Compound Interest Calculator
Compound interest: Interest calculated on the principal plus the interest already credited, so the base keeps growing. Over one year the difference from simple interest is trivial; over thirty years it is most of the outcome.; Compound Interest Calculator
Dollar-cost averaging: Investing a fixed amount at regular intervals rather than all at once. It reduces the risk of terrible timing at the cost of expected return, since holding cash longer in a market that usually rises has a price. Its main real benefit is behavioral: it keeps you investing through downturns.; Why Contributing Every Month Matters More
DRIP: A dividend reinvestment plan, which automatically buys more shares with each dividend instead of paying cash. In a taxable account the dividend is still taxable in the year paid, so reinvesting defers nothing — but it does raise your cost basis.; What Is DRIP?
Ex-dividend date: The date on which a stock trades without the right to the upcoming dividend. The share price typically drops by roughly the dividend amount that morning, which is why a dividend is a transfer of value rather than free money.; Dividend Calculator
Expense ratio: The annual percentage a fund charges, deducted from returns rather than billed. It compounds against you exactly the way returns compound for you: 0.5% a year over thirty years consumes a meaningful share of the final balance.
Nominal vs. real return: Nominal is the raw percentage earned; real subtracts inflation and measures the change in purchasing power. A 4% nominal return in a 3% inflation year is roughly a 1% real return, and real is the number that determines what you can actually buy.; How Inflation Eats Into Your Savings
Qualified dividend: A dividend taxed at long-term capital gains rates rather than ordinary income rates. Requires a US or qualifying foreign payer and a minimum holding period around the ex-dividend date. REIT distributions are generally not qualified.; Dividend Calculator
Rule of 72: A mental shortcut: divide 72 by an annual percentage return to estimate the years for money to double. At 8%, roughly nine years. Its value is reframing the question from "is 6% or 8% better" to "does my money double every 12 years or every 9".; Compound Interest Explained
Safe withdrawal rate: The percentage of a portfolio that can be withdrawn in year one — then adjusted for inflation annually — without depleting it over a planning horizon. The familiar 4% figure comes from research on 30-year retirements using US historical returns; longer horizons generally call for less.; FIRE Calculator
Sequence-of-returns risk: The risk that poor returns arrive early in retirement rather than late. Withdrawing while a portfolio is down permanently removes shares that would have participated in the recovery, so identical average returns can produce very different outcomes.; The 4% Rule: What It Says and Its Limits
Systematic risk: Market-wide risk — recessions, rate shocks, broad crises — that affects nearly everything at once and cannot be diversified away. It is the risk investors are compensated for bearing.; Diversifying Your Portfolio
TIPS: Treasury Inflation-Protected Securities — government bonds whose principal adjusts with the Consumer Price Index. They protect purchasing power mechanically rather than by expectation, and generally pay a low real return by design.; How Inflation Eats Into Your Savings
Unsystematic risk: Risk specific to one company or industry — a failed product, a lawsuit, a fraud. It can be eliminated for free by holding more things, which is why the market pays nothing for bearing it. Taking risk you are not paid for is the definition of a bad trade.; Diversifying Your Portfolio

Retirement

Catch-up contribution: Additional contributions permitted from age 50 — $8,000 for workplace plans in 2026, $1,100 for IRAs. A higher $11,250 workplace tier applies at ages 60 through 63, and it replaces rather than stacks with the age-50 amount.; 401(k) Limits Went Up in 2026
Cost-of-living adjustment (COLA): The annual increase applied to Social Security benefits, set from the CPI-W measure of inflation. The 2026 COLA is 2.8%. The increase in the Medicare Part B premium is deducted from it, which is why the raise you feel is smaller than the one announced.; What a COLA Really Buys
Elective deferral limit: The cap on employee contributions to workplace plans — $24,500 for 2026, shared across 401(k), 403(b), governmental 457(b), and the federal TSP. Employer match does not count against it; it counts against a separate, much higher combined limit.; Retirement Savings Calculator
Employer match: Money your employer contributes based on your own contributions, commonly a percentage of the first several percent of pay. A 50% match is a 50% return the moment it lands, which is why it outranks every other use of the same dollar.; Retirement Savings Calculator
Full retirement age (FRA): The age at which you receive 100% of your calculated Social Security benefit — 67 for those born in 1960 or later. Claiming earlier permanently reduces the benefit; delaying past FRA increases it until 70.; Social Security Calculator
HSA: A health savings account — the only account offering a deduction going in, tax-free growth, and tax-free withdrawals for qualified medical expenses. Requires a qualifying high-deductible health plan. After 65, non-medical withdrawals are taxable but not penalized, which makes it function as a second retirement account.; HSA Calculator
Required minimum distribution (RMD): The amount the IRS requires you to withdraw annually from traditional retirement accounts starting in your seventies, computed from the prior December 31 balance and a life expectancy table. Roth IRAs have none during the owner's lifetime.; RMD Calculator
Roth conversion ladder: Converting traditional retirement money to Roth in stages, paying tax at conversion, then withdrawing each converted amount penalty-free after a five-year waiting period. A common way for early retirees to reach retirement money before 59 and a half.; FIRE Calculator
Rule of 55: An exception allowing penalty-free 401(k) withdrawals from the plan of an employer you separated from during or after the year you turn 55. It applies to that plan only, not to IRAs or to plans from earlier employers.; 401(k)/IRA vs. a Taxable Index Fund
Traditional vs. Roth: Traditional contributions are pre-tax and withdrawals are taxed as ordinary income; Roth contributions are after-tax and qualified withdrawals are entirely tax-free. The choice largely comes down to whether your tax rate is higher now or expected to be higher later.; Roth vs. Traditional Calculator
Vesting: The schedule on which employer contributions become permanently yours. Your own contributions are always immediately vested; matched funds may require a period of service, and leaving early can forfeit the unvested portion.

Paycheck & Work

Additional Medicare Tax: An extra 0.9% on wages above $200,000 for single filers and $250,000 married filing jointly, with no employer match. The thresholds are fixed in statute and have not been indexed since 2013, so more earners cross them every year.
Exempt vs. non-exempt: Whether a role is exempt from the overtime requirements of the Fair Labor Standards Act. Non-exempt employees must receive overtime pay above 40 hours a week; exempt employees, who must meet both salary and duties tests, do not.; Salary to Hourly Calculator
FICA: The combined Social Security and Medicare payroll tax — 6.2% and 1.45% from the employee, matched by the employer. The employer half never appears on your pay stub, which is why self-employment tax looks so much higher than a paycheck deduction.; Paycheck Calculator
Gross pay: Your earnings before any deduction — the number in your offer letter. Budgeting from it rather than from net pay is one of the most common household planning errors.; Paycheck Calculator
Imputed income: The taxable value of a non-cash benefit — employer-paid life insurance above $50,000 of coverage, personal use of a company car, domestic partner health coverage. Added to taxable wages so tax can be withheld, then backed out so cash pay is unaffected.; How to Read Your Pay Stub
Net pay: What actually reaches your bank account after pre-tax deductions, tax withholding, and post-tax deductions. Commonly 65% to 80% of gross, depending on your state, filing status, and benefit elections.; Gross Pay vs. Net Pay
Section 125 plan: A cafeteria plan letting you pay for benefits with pre-tax dollars. Health premiums under one avoid both income tax and FICA, unlike 401(k) contributions, which avoid income tax only.; How to Read Your Pay Stub
Self-employment tax: Both halves of FICA paid by a self-employed person: 15.3% combined, applied to 92.35% of net self-employment earnings. Half of it is deductible as an adjustment to income.; Self-Employment Tax Calculator
Social Security wage base: The annual earnings ceiling above which the 6.2% Social Security tax stops — $184,500 for 2026. It rises each year with average wage growth, and crossing it is why some high earners see their paycheck grow in the autumn.; Paycheck Calculator
Supplemental wages: Bonuses, commissions, and severance, commonly withheld at a flat 22% federal rate up to $1 million a year and 37% above. That is a withholding convention, not a tax rate — the difference from your real bracket is settled on your return.; Bonus Tax Calculator

Banking & Everyday

50/30/20 rule: A budgeting framework allocating take-home pay 50% to needs, 30% to wants, and 20% to saving and debt repayment. A useful starting structure rather than a rule, and one that breaks immediately in very high cost-of-living areas.; Budget Calculator
Consumer Price Index (CPI): The Bureau of Labor Statistics measure of price change for a representative basket of goods and services, published monthly. Several versions exist: CPI-U is the headline figure, CPI-W drives the Social Security COLA, and chained CPI indexes federal tax brackets.; Inflation Calculator
Dynamic currency conversion: The offer at a foreign terminal to charge you in your home currency instead of the local one. Almost always more expensive, because the merchant's processor picks the rate and adds a markup commonly running 3% to 7%. Always decline and pay in local currency.; How to Avoid Currency Exchange Fees
FDIC insurance: Federal deposit insurance covering up to $250,000 per depositor, per insured bank, per ownership category. NCUA share insurance provides equivalent coverage at credit unions. Balances above the limit at one institution should be split.; Emergency Fund Calculator
Foreign transaction fee: A charge your card issuer adds to purchases processed outside the US, commonly around 3%. Separate from the exchange rate, and waived entirely by many travel-oriented cards.; Currency Converter
High-yield savings account: A deposit account paying a rate that tracks short-term interest rates, typically offered online. The right place for money needed within a couple of years: the balance cannot fall, funds are available within a day or two, and it is federally insured.; Where to Keep Your Down Payment Savings
Mid-market rate: The midpoint between buy and sell prices for a currency pair in the wholesale market — the rate shown on financial sites. No consumer service offers exactly this rate; the gap is the spread, and it is often the largest fee you pay even when nothing is labeled a fee.; Currency Converter
Money market fund vs. money market account: Nearly identical names, different products. A money market deposit account is a bank product and is FDIC insured. A money market mutual fund is a security and is not, though government money market funds hold short-term Treasuries and are extremely conservative.; Where to Keep Your Down Payment Savings
Net worth: Total assets minus total liabilities. A snapshot rather than a plan: two households with identical net worth and different savings rates end up in very different places. Note that traditional retirement balances are pre-tax, so a dollar there is worth less than a dollar in a Roth.; Net Worth Calculator
Owners’ equivalent rent: How the CPI measures housing costs for homeowners — an estimate of what they would pay to rent their own home. Because a house is treated as an asset rather than a consumption good, purchase prices never enter the index directly, and this survey-based estimate lags actual market rents.; What Is the CPI?
Regional price parity: A Bureau of Economic Analysis index comparing overall price levels between US regions, with the national average set at 100. Housing drives most of the variation, so a single index number understates how different two places feel for a renter and a homeowner.; Cost of Living Calculator
Sinking fund: Money set aside monthly for a known, irregular expense — annual insurance, car registration, holidays, a roof replacement. Distinct from an emergency fund, which is for the unexpected. Confusing the two is how emergency funds get drained by things that were never emergencies.; Budget Calculator
Treasury bill: Short-term US government debt issued in maturities from four weeks to one year, bought at a discount and redeemed at face value. Interest is exempt from state and local income tax, which meaningfully raises the after-tax yield in high-tax states.; Where to Keep Your Down Payment Savings

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