An expense ratio is the annual cost of owning an investment fund, expressed as a percentage of assets. It represents the portion of the fund used to cover management and operating expenses.

A dividend is a payment made by a company to its shareholders, typically from profits. Dividends are usually paid in cash and distributed on a regular schedule.

An ETF, or exchange-traded fund, is an investment vehicle that holds a diversified basket of securities and trades on an exchange like a stock.

A mutual fund is an investment vehicle that pools money from many investors to purchase a diversified portfolio of stocks, bonds, or other securities. Investors own shares of the fund rather than the underlying investments directly.

A taxable investment account, often called a brokerage account, is an investment account that does not receive special tax treatment. Interest, dividends, and realized capital gains are generally taxable in the year they occur.

A budget is a plan for how your income will be used over a given period of time. It outlines where money comes in, where it goes out, and how much is intentionally directed toward priorities like saving, investing, and spending.

Luxury creep is the gradual increase in spending as income or net worth rises, often without a deliberate decision.

A cash reserve is money held in accessible, low-risk accounts to cover unexpected expenses and near-term spending. Many households use the term interchangeably with emergency fund.

Net worth is the difference between what you own and what you owe. It is calculated by subtracting liabilities from assets.

An emergency fund is money set aside to cover unexpected expenses or income disruptions. It provides short-term liquidity so surprises can be handled without debt or disrupting long-term plans.

Cash flow is the movement of money into and out of a household over a given period of time. It reflects how income is earned, how expenses are paid, and whether there is a surplus or shortfall.