03 | Personal Finance

Today you will learn 5 new English words related to "Personal Finance"

Author

SEWT Team
May 07, 2025

Understanding “personal finance” is crucial for ESL learners like you, as it empowers you to navigate daily life and achieve financial stability in English-speaking environments. From budgeting and banking to understanding taxes and credit, these skills are essential for managing money effectively. Learning this vocabulary is important because financial literacy ultimately contributes to greater independence and overall well-being in your new community. So, let’s jump right in!

5 TERMS

  1. Budget (Noun / Verb): A plan for managing income and expenses over a specific period, or to allocate financial resources.

  2. Debt (Noun): Money owed to another party, often resulting from borrowing.

  3. Interest (Noun): The cost of borrowing money, usually expressed as a percentage of the principal, or earnings on investments.

  4. Invest (Verb): To allocate money or resources to an asset, such as stocks or real estate, with the expectation of earning a return.

  5. Savings (Noun): Money set aside for future use, typically in a bank account or other secure form.

EXAMPLE SENTENCES

  1. Budget

    • Setting a monthly budget is crucial to ensure you don’t overspend.

    • She decided to budget her expenses carefully to save for a new car.

    • By sticking to their budget, they managed to save a significant amount for their vacation.

  2. Debt

    • He was overwhelmed by his credit card debt and decided to seek financial counseling.

    • Paying off student debt can take many years, depending on the loan amount.

    • The company struggled with high levels of debt and needed to restructure its finances.

  3. Interest 

    • The bank charges 5% interest on personal loans.

    • He earned interest on his savings account, which helped his money grow over time.

    • Paying off high-interest debt quickly can save you a lot of money in the long run.

  4. Invest

    • She plans to invest in the stock market to build her wealth over time.

    • Many people invest in retirement accounts like 401(k)s for their future.

    • It’s important to diversify how you invest to reduce financial risk.

  5. Savings

    • e started putting a portion of his income into savings each month for emergencies.

    • They used their savings to make a down payment on a house.

    • Building a healthy savings account is key to financial security.

EXAMPLE PARAGRAPH

Managing personal finance effectively involves several key components. Creating a realistic budget is the foundation, allowing you to track your income and expenses and identify areas where you can save. Building up savings provides a financial cushion for unexpected events and allows you to pursue future goals. For longer-term growth, it's wise to consider how to invest your money, taking advantage of the power of compound interest. Conversely, it's crucial to manage debt responsibly, as high-interest debt can significantly hinder your financial progress. By carefully balancing these elements – budgeting, saving, investing, and managing debt – you can achieve greater financial stability and security.

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