The words, defined.

Anything widely accepted as payment, so people don't have to barter. It's money's main job: it sits in the middle of two trades that would never have lined up on their own.

e.g. You sell bread for dollars, then use those dollars to buy shoes — without ever needing a shoemaker who happens to want bread.

Something that holds its worth over time, so you can earn it now and spend it later. Money works as a store of value — until high inflation eats it.

A shared 'ruler' for measuring value, so wildly different things can be compared and priced in the same units.

e.g. A backpack is $40, an hour of work is $15 — same units, easy to compare.

Short for 'I owe you' — a promise to pay. A dollar works like an IOU the whole world honors: a claim on roughly a dollar's worth of goods or time.

Trading goods or services directly, with no money in between. It only works when both people happen to want what the other has — which is rare.

The value of the next-best thing you give up when you make a choice. The true cost of anything is what you didn't get to do with the same money or time.

e.g. A two-hour movie costs the ticket price plus the two hours you could have worked, studied, or slept.

How much of something exists and is for sale. When supply is low (scarce), prices tend to rise; when it's high, prices tend to fall.

How much people want something and are willing to pay for it. High demand pushes prices up; low demand pulls them down.

The basic economic problem: there's a limited amount of stuff but unlimited wants. Scarcity is why things have prices and why choices have trade-offs.

The study of individual buyers, sellers, and markets — how single people and businesses make decisions and how prices form in one market.

The study of the whole economy at once — things like inflation, unemployment, and growth that affect everyone, not just one market.

A general rise in prices over time, which is the same as money slowly losing buying power. A little is normal; a lot is dangerous.

e.g. At 3% inflation, $100 today buys what about $97 will buy next year.

How much your money can actually buy. Inflation lowers purchasing power even when the number on the bill stays the same.

The price of borrowing money, or the reward for lending it. Earned on savings, interest works for you; charged on debt, it works against you.

Earning returns on your returns, not just on what you put in. Over years it multiplies money — for you on savings, against you on debt.

e.g. $60/month invested at ~7% becomes roughly $70,000 after 30 years, mostly from time, not deposits.

The original amount of money you save, invest, or borrow — before any interest is added on top.

What you earn before any deductions: hours worked times your wage. The big number on the brochure.

Your take-home pay — what actually lands in your account after taxes and other deductions. Always budget with this number, not gross.

Money your employer removes from each paycheck and sends to the government for taxes, before you ever see it. Over-withholding is why many people get a refund.

Putting money into assets — like small pieces of many businesses — so it can grow over time, instead of sitting still. Riskier than saving short-term, stronger over the long run.

Money and assets that last long enough to change a whole family's path, usually built through compound interest, time, and the discipline to leave it alone.