The word 'Finance' means how you use or manage your money. This is a common topic of conversation both in people's private life and in business, so it's important for non-native speakers of English to understand the basic English vocabulary of finance (which is also called Financial English) because they will use it everyday. An example is the verb 'to buy', which means to give somebody money to obtain/get something. In this first of two online exercises on Essential Financial English Vocabulary, we will look at some of the basic verbs and vocabulary used in English to talk about finance and money. Although this exercise uses an example of how somebody uses and manages their money in a non-business situation, this vocabulary can be used with the same meaning in business situations too.
In the following conversation between two work colleagues (Peter and Juan), Peter explains to Juan how he uses and manages his money in his private/personal life. Focus on the words/phrases in BOLD and think about their meaning.
Juan:'Peter, do you own your house?'
Peter:'Yes, I do. It's mine. I purchased it 5 years ago. And you? Do you own your house?'
Juan:'No, I don't. I rent mine.'
Peter:'If you don't mind me asking, how much money do you pay in rent each month?'
Juan:'I pay £900 each month to the owner of the property. But I want to buy a property, you know a house or an apartment.'
Peter:'I understand. But you should be carefully. When I bought my house, it cost me £450,000. But because of the crisis in the economy. Its value has decreased a lot. So, if I tried to sell it now, I would get a lot less. But at the moment, nobody wants to buy property. Plus, when I bought the house I had to pay for a solicitor (which is a type of lawyer) to organise the legal documents. And solicitors charge a lot of money for doing this service. My solicitor charged me £4,300.'
Juan:'So, what is your house worth now? How much money could you sell it for?'
Peter:'A similar house in my street was sold for £360,000 last month. So I suppose it's now worth between £360,000 to £370,000. So, if I could sell it I would make a loss of about £80,000. But to be honest, I think when I bought the house, I overpaid. 5 years ago, my house wasn't worth £450,000. I should have paid £420,000 for it at most.'
Juan:'My god! You have lost a lot of money.'
Peter:'Yes, I have. But the property I had before my current house, I made a profit when I sold it, a very big profit. When I bought it, I paid £92,000. When I sold it 8 years later, it was worth £230,000. So I made a profit of £138,000.'
Below is a definition/description of each of the words in bold from the above text. Now choose the word/phrase from the question's selection box which you believe answers each question. Only use one word/phrase once. Click on the "Check Answers" button at the bottom of the quiz to check your answers.
When the answer is correct, two icons will appear next to the question. The first is an Additional Information Icon "". Click on this for extra information on the word/phrase and for a translation. The second is a Pronunciation Icon "". Click on this to listen to the pronunciation of the word/phrase and to do a pronunciation speaking test.
Now that you understand the new vocabulary, practice them by creating your own sentences with the new words/phrases.