US Financial Wellness Glossary
Plain-English definitions for the financial terms that appear across the app — from your pay stub to your retirement plan. Use this as a quick reference whenever a term feels unclear.
Pay and Income
Gross pay
Your total earnings before any deductions — taxes, benefits, or retirement contributions.
Net pay
Take-home pay after all deductions. This is the amount deposited into your bank account.
W-2
A year-end form your employer sends showing total wages paid and amounts withheld during the calendar year.
W-4
A form you fill out for your employer that guides how much is withheld from each paycheck. Update it after life changes.
1099
A form reporting income from self-employment, freelance work, or investment accounts — not covered by employer withholding.
Direct deposit
Electronic transfer of your net pay straight into your bank account each pay period.
Pay period
The date range your pay stub covers. US pay cycles are usually weekly, biweekly (every two weeks), or semi-monthly (twice a month).
YTD (Year-to-date)
Running totals since January 1st — used on pay stubs to show cumulative gross pay, deductions, and net pay for the year so far.
Retirement Savings
401(k)
An employer-sponsored retirement savings plan. Contributions are deducted from your paycheck each period. Many employers match a portion.
IRA (Individual Retirement Account)
A retirement savings account you open yourself, separate from your employer. Has annual contribution limits.
Roth IRA / Roth 401(k)
A retirement account funded with money you have already been paid, so qualified withdrawals in retirement come out free of federal income tax.
Employer match
Free retirement money your employer adds when you contribute to your 401(k). Contributing at least enough to get the full match is a fundamental financial wellness step.
Vesting
The schedule by which employer contributions become fully yours. You may need to stay employed for a set number of years before keeping the full match.
Benefits and Healthcare
Open enrollment
The annual window — usually in autumn — when you can change your employer benefit elections for the coming year.
Deductible
The amount you pay out of pocket for covered services before your health insurance starts paying.
Copay
A fixed fee you pay for a specific service (e.g. $25 for a GP visit) after meeting your deductible.
Coinsurance
Your share of costs after the deductible — typically a percentage (e.g. you pay 20%, the plan pays 80%).
Out-of-pocket maximum
The most you will pay for covered services in a plan year. After hitting this, the insurer covers 100%.
HSA (Health Savings Account)
A savings account paired with a high-deductible health plan. Funds roll over year to year and can be used for qualified medical expenses.
FSA (Flexible Spending Account)
An employer benefit account for healthcare or dependent care costs. Unlike an HSA, FSA funds typically do not roll over — use them or lose them.
HDHP (High-Deductible Health Plan)
A health plan with lower premiums but a higher deductible. Required to open an HSA.
Credit and Borrowing
FICO score
The most widely used US credit score, ranging from 300 to 850. Lenders use it to assess how likely you are to repay a loan.
Credit bureau
An agency that collects and maintains credit history. The three major US bureaus are Equifax, Experian, and TransUnion.
Credit utilization
The percentage of your available revolving credit that you are using. Keeping it below 30% generally supports a healthy score.
APR (Annual Percentage Rate)
The yearly cost of borrowing, including interest and fees. Use APR to compare loan and credit card offers.
APY (Annual Percentage Yield)
The effective annual return on a savings or investment account, including the effect of compounding.
DTI (Debt-to-Income ratio)
Your total monthly debt payments divided by gross monthly income. Lenders use this to assess affordability; a DTI under 43% is typically required for a mortgage.
LTV (Loan-to-Value ratio)
The loan amount as a percentage of the property value. A lower LTV often means better mortgage terms.
Financial Planning Basics
Emergency fund
Savings set aside to cover 3–6 months of essential living costs. Held in an accessible account, not invested.
Net worth
What you own (assets) minus what you owe (liabilities). A useful snapshot of overall financial position.
ACH transfer
Automated Clearing House — the US electronic payment network used for direct deposits, bill payments, and bank transfers.
CFPB (Consumer Financial Protection Bureau)
A US government agency that protects consumers in financial markets. Use cfpb.gov to report financial issues or find trusted guidance.
FDIC
Federal Deposit Insurance Corporation. Insures deposits at US banks up to $250,000 per depositor, per bank.
NCUA
National Credit Union Administration. Insures deposits at federally insured credit unions up to $250,000.
Official source
Need a more detailed definition?
The Consumer Financial Protection Bureau (CFPB) maintains authoritative plain-English explanations of financial terms and your rights as a consumer.
CFPB Financial Glossary