What does that word mean?

Words about money can be confusing. Use the glossary to find out what those words mean.


Arrears is an amount of money that was owed on a particular date, which has not been paid back.


ATM stands for Automatic Teller Machine. You’ll usually find them outside banks or inside shopping centres. To use one, you need your debit card and your PIN. You can check how much money you have in your account and take cash out. ATMs sometimes charge you a fee to use them, although it’s usually free if you use your own bank’s ATMs.

Australian Business Number (ABN)

An ABN is a unique 11 digit number that a business gets when it’s registered with the government.


The balance is the amount of money in an account. The balance will go up and down when you add money or take money out.


For the purposes of investing in the share market, a broker is a person or company who arranges the purchase of shares or other investment product, usually for a fee or a commission.


A budget is a plan to make sure you only spend what you can afford. It usually divides up the amounts you need to pay your bills, what you can spend day to day, and how much you’ll need to save for things you want in the future.

Compound interest

This is how your money grows when it’s in a savings or superannuation account. It is when you earn interest on both the money you’ve saved and the interest you’ve earned while it’s been in the account.


Credit is money that you borrow and promise to pay back. Banks and similar companies offer credit, and it comes in different forms like credit cards, personal loans and home loans (mortgages).

Debit card

A debit card is a card that you use to pay for things with the money in your bank account. Debit means to take out money from an account.


Debt is money you owe a person or a company. It can be manageable like a home loan that you know you will pay off over many years or can get out of control like a credit card bill that you’re only paying the minimum repayments on.


A deduction reduces the income you pay tax on. In some cases, you can claim things you bought for work over the last financial year. This might be uniforms, travel costs, equipment, tools or stationery.


A deposit is when you put money in your bank account and the balance goes up.

Direct debit

A direct debit is when money comes out of your bank account automatically to pay a bill. These kinds of transactions are common for things like monthly phone bills and gym memberships. The money comes out automatically, so you don’t have to remember to pay them.


A dividend is a payment made by a company to its shareholders. The payment is a share of the profits of the company and is based on the number of shares a person holds.

Exchange traded funds

These are a basket of shares which tends to track the performance of a specific index, currency or commodity, such as the ASX 200, the Australian dollar or gold. The difference between an Exchange Traded Fund (ETF) and a managed fund is that ETFs are listed on the share market whereas managed funds are not.


An expense is the money needed or used to buy something.

Financial year

The financial year runs from 1 July to 30 June. Whenever you are working out how much income you have earned in a year or how much tax you need to pay, you use the financial year, not the calendar year.

Gross pay

The amount of pay you have earned before tax is taken out.


ID means ‘identification’ or can stand for ‘identity document’. When it comes to money it means official documents that prove who you are. This can include proof of age cards, driver’s licences, passports, Medicare cards and birth certificates.


An incentive is something that encourages someone to do something. When it comes to banks, they want you to do business with them so they’ll offer you things you might want. Often this is an interest rate on a savings account which will mean you’ll save more money through compound interest.


Income is the money you get from working a job. When your income reaches a certain amount, you have to pay tax on your income to the government.


Interest is the amount of money paid in return for using someone else’s money. Banks will pay you interest for putting your money in one of their savings accounts. But if you borrow money from a bank as a loan, you have to pay them the interest. Interest is based on either a ‘fixed’ interest rate that you agree to when you open the account or take out a loan, or a ‘variable’ rate that changes over time.

Interest rate

The way the bank decides how much interest to add or that you owe, is based on an interest rate. For repayments on mortgages, it’s under 5%, but for credit cards it can be around 20%. Most savings accounts have an interest rate applied that helps you grow your money.


This means that for a certain amount of time, a company won’t charge you interest on your purchase. That means you can pay off the item over time. Once that time ends you will have to pay a large amount of interest on whatever is left, and you can end up paying more than you expected. The price of the item often includes extra fees.


Investing is when you put money into something and hope that it grows. Investments that adults often make include buying houses to rent out to people and buying shares in companies or in valuable goods like gold.

Managed funds

This is where your money is combined with the money of other investors and used by a fund manager to buy investments such as shares. The difference between an Exchange Traded Fund (ETF) and a managed fund is that ETFs are listed on the share market whereas managed funds are not.


Houses are a large purchase and most people need to save for a number of years before they purchase one. Banks have special loans called mortgages that help people buy houses and pay the bank back, with interest, in regular amounts over an extended time.

Net pay

The amount of pay you will receive (gross pay, less the amount of tax you have to pay). 


Overtime is work performed outside the ordinary hours.

Pay period

This is the period of time that you have worked that you are being paid for.

Pay rate

Your pay rate is the amount of pay you receive for each hour you work. Ordinary rates are usually what is paid on week days or standard times for your business. Penalty rates are usually higher and paid for certain reasons (for example, you work on a Sunday or public holiday, or outside your ordinary hours (overtime).

Personal loan

This type of loan lets you pay for large expenses like cars, holidays and home renovations. You usually have to pay it back, with interest, in a shorter amount of time than you would a mortgage.


PIN stands for Personal Identification Number. This number is usually 4-digits long and is like a password for your debit card. You’ll need it to use ATMs and to use your card to pay for things over a certain amount in shops. Never tell anyone your PIN, don’t write it down or say it aloud in public. If someone finds out your PIN and gets your card, they can take money out of your bank account.


A fee you pay usually monthly or yearly to get an insurance policy.

Product Disclosure Statements

Product Disclosure Statements (PDS) must be provided for all investment products. They have information on the terms and conditions of a product, including key features, fees, commissions, benefits and complaints handling procedures.


A repayment is an amount of money you give a bank or loan company to pay them back the money you borrowed.


A share is part ownership of a company. Shares are also known as equities or stocks. Shareholders are entitled to dividends which represent their portion of the company's profits.

Speculative investment

An investment that has a chance of making an extraordinary profit but also has a high chance of losing most or all of an investor's initial investment.


Superannuation (super) is the money put aside for you by your boss in an account for your future. It’s the money you will have access to when you retire. You can also contribute to your super yourself to help it grow even faster.


Tax is taken out of the money you earn doing work. It goes to the government to pay for the things that keep the community running, like roads, schools and hospitals. The amount of tax taken out is based on how much you earn. 

Tax time

Tax time is when you submit a tax return form to the Australian Taxation Office (ATO). You report how much income you made during the year and any deductions you want to claim. The ATO assesses whether you have a tax bill to pay or whether they need to give you some money back.


A bank transaction is a record of money going in and out of your bank account. This can include the money your boss pays you going in, or the money you spent buying food going to the business you bought it from.


A transfer is money moving between bank accounts. It can be when you move money from your everyday account into your savings account, or when you send someone money using their bank details or PayID.


A withdrawal is when you take money out of a bank account and the balance goes down.