Introduction:

In this second of two online exercises on essential financial English vocabulary, we will continue to look at the basic verbs and vocabulary that are used in English to talk about finance and using/managing money. In this part, we will look at more examples of basic/essential vocabulary. Although this exercise uses an example of how somebody uses and manages their money in a non-business situation, this vocabulary can also be used with the same meaning in business situations too.

Click here to go to the first part of this 'Essential financial English vocabulary exercise'


Exercise: More finance & money

In the following conversation between two work colleagues (Peter and Juan), Peter continues to explain to Juan how he uses and manages his money in his private/personal life.

From the context, try to guess what the meaning of the words/phrases in bold are. Then do the quiz at the end to check if you are right.

Juan:'Could I ask you how much money you earn from working here? How much money you are paid in your salary?'

Peter:'Each year I earn about £70,000. But that is my gross salary. That is before the government removes taxes, the money the government takes from people to pay for its services. So after taxes have been removed, my net salary (the money that I obtain at the end) is about £54,000.'

Juan:'It's not a lot of money to live on in London!'

Peter:'Yes, I know. But I invested some money in the past. I bought some stocks and shares in companies. So, every year I earn another £6,000 from them. So my total income, the money I receive each year, is £60,000.'

Juan:'So, what do you do with your income? What do you spend it on?'

Peter:'I spend my money like most people, on food, bills, clothes, holidays etc... I also have some debts. I have credit cards, loans and a mortgage from the bank. I owe the bank a lot of money, money which I borrowed from them in the past to buy things. So, I repay £6,000 to the bank each year.'

Juan:'Do you save a lot of money? Put money into a bank account?'

Peter:'Yes. I try to save £2,000 each month in the bank.'

Juan:'Do you have a car?'

Peter:'I can drive a car, but I don't own a car. With my income, it's too expensive to have a car in London. You have to buy the car and then you have to pay for petrol, parking, insurance etc... I can't afford to have a car in London.'


Now do the QUIZ below to make sure you understand the meaning of this vocabulary.



Quiz: Essential financial English vocabulary part 2

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.

1. The money that people pay to the government from their salary and for things they buy, is called    
         

Taxes:
(noun) 'taxes' or 'tax' (which is the singular form/noun) is the money that people pay to the government. There are two main types of 'taxes'. The first type is 'direct taxes', which is money people/businesses pay directly from their income (salary, investments, earnings, profit etc...) and on property (when buying property/houses and for owning property/ houses). The second type is 'indirect taxes', which is the extra money people/businesses pay when they buy things/goods from a shop, restaurant, company etc... (e.g. VAT (Value Added Tax) or Sales tax). In Spanish: "impuestos".

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Taxes:

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2. When you keep/put your money into a bank account for the future, you    
         

Save:
(verb) The infinitive is 'to save'. It has many different meanings. In this context 'to save' means to keep money you have, so you can use it if you want or need to in the future. Normally, people 'save' their money in a bank (often in a 'savings account'). For example, 'she saves €100 a month'. 'save' can also mean a reduction in cost/price of services or products. It is often used with this meaning in advertisements and shops to tell potential customers that there is an offer/reduction in price. 'save' tells you how much less money you will have to pay to buy the product or service e.g. 'buy before Friday and save €100'. In Spanish: "ahorrar".

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Save:

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3. A verb that is used to say how much money you 'receive'/'are paid' for working, is    
         

Earn:
(verb) The infinitive is 'to earn'. Basically, it is used to say how much money you make from your job. For example, 'last year, I earned €35,000'. There are many other verbs that can be used with the same meaning as 'earn', e.g. 'make', 'to be paid', 'get' and 'receive'. In Spanish: "ganar".

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Earn:

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4. A verb that means to take money from a bank that you have to give/pay it back, is    
         

Borrowed:
(verb) The infinitive is 'to borrow'. This means when you either take money or an object/thing from somebody that you have to return to them in the future. You 'borrow' money from a bank when you have a loan or mortgage. You have to repay the bank the money in the future. You can also 'borrow' things from people, like a pen or car. For example, 'can I borrow your phone to make a call?'. The opposite of 'to borrow', is 'to lend'. This is when you give somebody money or an object/thing that you want them to return to you in the future. When you have a loan from a bank, you 'borrow' the money and the bank 'lends' you the money. In Spanish: "pedir prestado".

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Borrowed:

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5. A word that means that the amount of money in a salary/wage is before taxes have been removed, is    
         

Gross:
(adjective) 'gross' is used before 'salary' or 'wage' to mean that the figure or amount of the salary/wage is before any taxes have been removed/deducted, e.g. 'your gross monthly salary will be $3024'. 'gross' is also used with the same meaning before 'profit'. To say that the amount or figure of the salary/wage or profit is after taxes have been removed/deducted, 'net' is used instead of 'gross', e,g, 'the net monthly salary will be $2453'. In Spanish: "bruto".

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Gross:

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6. A noun that means all the money you have to pay back to people in the future, is    
         

Debts:
(noun) This word means all the money that you have borrowed and have to pay/give back in the future or products and services you have received and haven't paid for. Normally, 'debts' are loans from banks, like mortgages or money used on credit cards. With businesses, 'debts' also means invoices for products and services they have to pay. For example, 'he has borrowed a lot of money, he has a lot of debts'. 'debts' and 'debt' are used with the same meaning. You use 'debts' with the verb 'to have' (e.g. 'the company has very few debts'. You use 'debt' with 'to be in' (e.g. 'they are in debt'). The verb 'to owe' has the same meaning as 'debts', e.g. 'I owe the bank €4,000'. In Spanish: "deudas".

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Debts:

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7. A verb that means that you have put your money into the stock market or have bought a part of a company, is    
         

Invested:
(verb) The infinitive is 'to invest'. This means to buy financial securities (e.g. stocks/shares, bonds etc...) or to buy part of a company. People 'invest' their money to make a profit (earn money). It is different to 'save' (where you put your money in a bank and there is very little risk that you will lose your money) because although you can earn more money when you 'invest', there is a higher risk that you will lose your money. With 'invest', if you want to say where you have 'invested' your money (e.g. Apple shares, a company etc...) you use the preposition 'in' after the verb, e.g. 'I have invested €1,300 in Ford shares'. The noun is 'investment(s)', e.g. 'It's a good investment'. In Spanish: "invertir".

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Invested:

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8. A word that means all the money you receive/are paid from your job, investments, family etc..., is    
         

Income:
(noun) This is a combination of all the money you receive/are paid and can then spend or save. Your 'income' is the total of the money you receive from your salary/wage from work, payments from money you have invested (e.g. stocks/shares, money from renting a property to somebody etc...) and money you receive regularly from family. For example, 'my monthly income is €2,000, €1,800 from work and €200 from my parents'. The opposite of 'income' is 'expenditure', which means the money you spend. In Spanish: "ingresos/rentas".

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Income:

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9. A verb that means the money you have to pay back to people in the future, is    
         

Owe:
(verb) The infinitive is 'to owe'. This verb means all the money that you have borrowed and have to pay/give back in the future or products and services you have received and haven't paid for. The verb 'to owe' can be used for loans you have from banks, like mortgages or money used on credit cards. For businesses, 'owe' is also used for invoices for products and services they have to pay. With 'owe', you normally say who you borrowed the money from after the verb and then the amount of money you still have to pay/give them. For example, 'he has borrowed a lot of money, he owes the bank €4,000 and he owes me €5,000'. The noun 'debts' has the same meaning as 'to owe', e.g. 'he has a lot of debts'. In Spanish: "deber/adeudar".

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Owe:

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10. A verb that means the opposite of 'to save' money, is    
         

Spend:
(verb) The infinitive is 'to spend'. In this context, the verb means the money that you use to buy or pay for products/objects (e.g. in shops) and services (e.g. taxi journeys). For example, 'she spends €200 a month'. If you want to say on what you have 'spent' your money (e.g. a sandwich, a book etc...) you use the preposition 'on' after the verb, e.g. 'I spent £20 on a new book'. If you want to say where you have 'spent' your money (e.g. a shop, a restaurant, a city etc...) you use the preposition 'in' after the verb, e.g. 'I spent €400 in Ireland'. In Spanish: "gastar".

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Spend:

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11. A word that means that the amount of money in a salary/wage is after taxes have been removed, is    
         

Net:
(adjective) 'net' is used before 'salary' or 'wage' to mean that the figure or amount of the salary/wage is after taxes have been removed/deducted, e.g. 'your net monthly salary will be $2453'. 'net' is also used with the same meaning before 'profit'. To say that the amount or figure of the salary/wage or profit is before taxes have been removed/deducted, 'gross' is used instead of 'net', e.g. 'the gross monthly salary will be $3024'. In Spanish: "neto".

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Net:

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12. When you 'don't have enough/sufficient money' to buy something, you    
         

Can't afford:
(phrase) This is a commonly used phrase and means that you don't have the money to buy a product or service. It is like saying that something is too expensive for you to pay for. For example, '€30,000 for the car! I can't afford it. I only earn €25,000 a year'. The opposite of 'can't afford' is 'can afford' and this means that you do have the money to buy or pay for something, e.g. 'I can afford to repay €100 a month for the loan'. In Spanish: "no poder permitirse".

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Can't afford:

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13. A verb that means 'pay back' the money you have borrowed in a loan, is    
         

Repay:
(verb) The infinitive is 'to repay'. It is basically a different way of saying 'give/pay back money' that you have borrowed in a loan. For example, 'I repay €56 a month on the loan' or 'they have repaid the loan'. Although this is normally used for loans from banks, you can also use it when you borrow money from people, e.g. 'she hasn't repaid the money she borrowed from me'. The noun for this verb is 'repayment', e.g. 'I make a repayment for the loan every month'. In Spanish: "devolver/pagar".

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Repay:

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Practice

Now that you understand the new vocabulary, practice them by creating your own sentences with the new words/phrases.