Financial Glossary

Bad Debt - Credit used to purchase items that depreciate in value or are no longer around when the bill arrives, especially if a balance is revolved and interest is paid.

Balance - The amount of money on deposit in a bank account or outstanding on a loan or credit card.

Bank - A for-profit financial institution where consumers can access a variety of services such as checking and savings accounts, credit cards, safe deposit boxes, and loans.

Bankruptcy - The process of petitioning a court to discharge one's debts. There are two types of personal bankruptcy: Chapter 7 (liquidation of assets) and Chapter 13 (debt repayment plan).

Bank Statements - A document that indicates the beginning and ending balance of a bank checking or savings account and transactions (e.g., deposits, checks that have cleared) that have taken place during the statement period.

Basis/Cost Basis - The value assigned to an asset, generally it's purchase price plus the amount of subsequent deposits, that is used to determine a capital gain or capital loss for tax purposes.

Bear Market - The term used to describe a prolonged period of declining stock prices.

Beneficiary - Individual(s) identified to inherit specific property (e.g., beneficiaries are named on an insurance policy and retirement savings plans such as an IRA).

Before-Tax Dollars - Money contributed to a tax-deferred savings plan (e.g., 401(k) and some IRAs) that you do not have to pay income tax on until withdrawal at a future date.

Bond - A debt certificate or IOU issued by a corporation or unit of government. Borrowers are promised interest for loaning their money to the bond issuer and the return of their investment at a specified future date.

Broker/Stock Broker - A professional who executes investors' orders to buy and sell securities and generally provides some financial advice.

Budget - Also known as a spending plan, it is a plan for spending and saving money that balances household income and expenses.

Bull Market - The term used to describe a prolonged period of rising stock prices.

Buy and Hold - A strategy of purchasing securities believed to be of high quality and keeping them for a number of years.

Updated:E.J.B.