We’re typically drowning in jargon in the money world. What does this stuff really mean? Here are some alternative definitions to find a signal amid the noise out there.

Fees     

Cheeky little costs that add to the true price of something... typically hidden behind the scenes. You end up with less in your pocket if you pay more of these, so it literally pays to keep an eye on fees

Credit score      

Lenders try to figure out whether you will pay them back, so they look at a score for you based on how well you've paid bills or repaid loans in the past. If your credit score is high, you’ll get the best deals.

Car loan             

The privilege of paying more and more for something that's worth less and less! The trick is to look at your borrowing costs and make sure those wheels are worth it.

Gross vs net pay             

The amount your payslip says you earn and you’d like to bring home (gross), as opposed to what you actually do (net). But it’s not about how much you make – it’s about how much you keep and how you grow it.

Interest

The cost of using money. If you're a borrower, it's your worst enemy if it gets out of control. But if you're a lender or an investor, it's your best friend, so you want to stay on its good side!

Compound interest       

Interest earning its own interest and returning back to your pocket. It’s a beautiful thing – supercharging your savings and getting you to a better place moneywise.

Saving 

A losing proposition: if you're just saving, you're rolling backwards -- thanks to fees, taxes, inflation (and governments printing money). The remedy is to be taking your savings and investing it in things that spin off an income or grow in value (or both!).

Returns

What you get back in your pocket from investing. These can shrink to nothing and can even go negative because of fees, taxes, inflation and market plunges. But the idea with investing is to get positive returns – and many investors do, especially over the long term.

KiwiSaver government contribution      

The government gives you up to $521 each year, just for putting money into your KiwiSaver. Too many people leave this on the table. It’s basically free money for your future!

Net worth         

What you own minus what you owe. It's the way to tell if you're getting ahead financially. The goal is to get yours trending up as much as possible so you can reach your future goals.

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