English Vocabulary for Personal Finances – assets, equity, collateral...
At a glance
- Length
- 16 min
- Channel
- Adam’s English Lessons · engVid
- Video from
- Mar 2025
- Rating
- ⭐⭐ Great video · 2/2
- Best for
- English learners managing money or preparing to speak with financial advisors.
Understanding Personal Finance Vocabulary in English
This lesson covers the essential financial terminology you need to understand before speaking with a financial advisor or managing your own money. Whether you're saving for the future, planning to borrow, or investing, knowing these terms in English will help you make informed decisions about your finances and communicate clearly with banks, advisors, and lenders.
The video is designed for English learners who want to build confidence discussing money matters—from everyday budgeting to more complex concepts like equity and collateral. You don't need a finance background; the focus is purely on vocabulary and what each term means in practical contexts.
Key Moments
Core Financial Terms You'll Learn
- Bankruptcy is a legal status when you cannot pay your debts and must declare to lenders that you have no money to repay them.
- Budget is your plan for how much money you will earn and spend over a set period.
- Disposable income is the money left over after you've paid all your necessary expenses and taxes.
- Assets and liabilities are the things you own (assets) versus the money you owe (liabilities).
- Collateral is property or something of value you pledge to a lender as security for a loan.
- Credit rating is a score that shows lenders how reliable you are at repaying borrowed money.
What to Expect from This Financial Vocabulary Lesson
The video walks through money management language in a logical order, starting with concepts that help you avoid financial trouble (like bankruptcy and budgeting) and moving toward more advanced terms used when borrowing or investing. You'll encounter words tied to income, spending habits, debt, taxes, and the different ways people build and protect their wealth. The instructor emphasizes that learning vocabulary is only the first step—understanding your own financial situation and doing your own research are equally important. Each term is explained in plain English with context so you can see how it's used in real financial conversations.
Common Questions About Personal Finance Vocabulary
What's the difference between a fixed income and disposable income?
Fixed income is money you receive regularly and can count on, such as a salary or pension. Disposable income is what remains after you've paid your required expenses (rent, utilities, taxes) and is the money you can actually choose how to spend.
Why is avoiding bankruptcy so important?
Bankruptcy damages your financial history for years. Once you've filed for bankruptcy, banks and companies become unwilling to lend you money, sell you a house, or provide credit unless you pay in full upfront, making it much harder to manage future financial needs.
What does it mean to "default" on a loan?
To default means you fail to make the required payments on a loan by the agreed deadline. This is a serious breach of your agreement with the lender and can result in legal action, damage to your credit rating, and loss of collateral.
How do assets, liabilities, and equity relate to each other?
Your assets are anything of value that you own. Your liabilities are debts you owe. Your equity is the difference between them—essentially, what you truly own after subtracting what you owe. For example, if a house is worth $300,000 and you owe $200,000 on the mortgage, your equity is $100,000.
What role does a credit rating play in borrowing money?
Your credit rating reflects how responsibly you've borrowed and repaid money in the past. A higher rating makes lenders trust you more, which means they're more likely to approve loans and may offer you better interest rates. A lower rating makes borrowing harder and more expensive.
Key Terms
- File for bankruptcy
- To formally declare to the government and lenders that you cannot pay your debts.
- Stretch your dollar
- To get the maximum value or benefit from each unit of currency you earn.
- Default
- To fail to make a required payment on a loan or debt by the agreed date.
- Collateral
- Property or valuable items you offer to a lender as a guarantee that you will repay a loan.Credit ratingA score that measures how reliably you have borrowed and repaid money in the past.
- Line of credit
- An agreement with a lender that allows you to borrow money up to a set limit whenever you need it.
- Mortgage
- A long-term loan used to buy a house, where the house itself serves as collateral.
Sources: File for bankruptcy · Stretch your dollar · Default · Collateral · Line of credit · Mortgage — definitions cross-referenced with Wikipedia
Video by Adam’s English Lessons · engVid on YouTube. If you enjoyed it, please subscribe to their channel and show your support for the great video.
Description
Money, money, money. Money management is a serious issue that everyone should learn about. To do this in English requires knowing some of the technical and everyday language involved, including words like collateral, debt, assets, equity, and more. In this English lesson, we look at some of the main vocabulary to help you make good choices with your money. https://www.engvid.com/english-vocabulary-for-personal-finances/
Learn more money and finance-related vocabulary with these videos:
Speak Like a Native Shopper: English Vocabulary for Shopping, Sales...and SCAMS! https://youtu.be/rE7CrdKLCgQ
Learn English Vocabulary: Buying a Car https://youtu.be/pLq9KzUdSbM
In this lesson:
0:00 Vocabulary for Personal Finances
1:14 bankruptcy
1:57 budget
2:12 fixed income
2:47 disposable income
3:18 impulse buy
3:49 debt
4:13 loan
4:36 tax & tax return
4:59 default
5:29 assets & liabilities
6:35 investment portfolio
6:55 term deposit
7:34 capital gains & losses
8:11 retirement savings
9:27 equity
10:13 collateral
10:47 credit rating/score
11:37 line of credit
11:57 insurance – deductible, copay, premium
13:23 mortgage, interest, property tax
TRANSCRIPT
Hi. Welcome back to www.engvid.com. I'm Adam. In today's video, I want to help you basically take care of your money. Okay? Very, very important topic today. So, what we're going to look at are some things, some terms, and some expressions that you need to understand before you speak to a financial advisor. Okay? And that's what we're going to look at here. A financial advisor is a person who supposedly knows how you should spend your money, save your money, invest your money. Basically, how to keep yourself comfortable and safe for the long term, in the future. Okay? Because it's becoming more and more expensive to live in big cities, especially, and you need to know how far you can stretch your dollar. Stretch your dollar basically means how much value you can get out of every dollar that you earn. Okay?
So, we have some terms here. Now, again, just a quick warning. All I'm doing here is giving you some vocabulary, but it's up to you to do the research and to know your personal situation very well so that you know how to basically take care of your money and take care of your future. Okay?
So, the main focus here is what we want to do is we want to avoid bankruptcy. Bankruptcy, when you file for bankruptcy... File for bankruptcy means you're telling the government or you're telling the bank or you're telling the people that you owe money to that you don't have any money. Okay? Now, a lot of people use bankruptcy as a last resort, as a last option when they just can't make payments on their bills. Bankruptcy is a very bad thing to have on your financial history because companies or banks won't lend you money, they won't sell you a house, they won't sell you a car unless you pay the full amount. So, you want to try to avoid bankruptcy as much as possible.
So, where does that begin? It begins by creating a budget. So, the "dg" just sounds like a "j", budget, and the "e" sounds like an "i". So, what you're doing with a budget is you're taking your fixed income, this is the amount of money that you're going to get every week or every month, and it's not going to change. For example, if you work at a company and that's the only income you have, then every month your income will be exactly the same. It is fixed. So, you take this fixed income and you have to cut it into pieces of how you're going to spend it. You're going to pay taxes, you're going to pay your insurance bill, you're going to pay your rent if you're renting, or your mortgage payments if you bought a house.
You're going to pay all your bills, and then when you're finished paying all the things that you have to pay, what is left for you to spend on food or entertainment or travel is called your "disposable income". "Disposable" means you can use it. You can use it for anything, basically. It's not necessary for you to pay any
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