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 and money (which is also called Financial English) because you will commonly hear or have to use it when speaking in English.

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.

After you have done this exercise, go to the the second part to learn more essential financial English vocabulary exercise. In addition, you can also improve your knowledge of the English vocabulary (more advanced than in this exercise) used for banking or the stock market or insurance in our online exercises on these financial topics.

Exercise: Finance & money

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.

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:'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 careful. 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.'



Quiz:

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" button at the bottom of the quiz to check your answers.

When the answer is correct, two icons will appear next to the answer. The icon contains extra information about the word/phrase. In the icon, you can listen to the pronunciation of the word/phrase.

1. A house, building or apartment, are all types of

         

Property:
(noun) 'property' in this context is a commonly used financial/business word that means any type of building (e.g. houses, offices, factories etc...) or land. For example 'this property, which also has a garden, is for sale for £134,000'. 'property' is also used in English to mean that something (e.g. a building, car, TV etc...) is owned/belongs to somebody. For example, 'the books and dvds are my property, they are mine'. When you use 'property' with this meaning, you use the verb 'to be' followed by the possessive form of the person/company who the thing(s) belong to in front of 'property', e.g. 'they are his property' or 'the house is Simon's property'. In Spanish: "propiedad".

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2. The opposite of the verb 'to buy', is

         

Sell:
(verb) The infinitive is 'to sell'. This means to give somebody a product or service for money, e.g. 'the shop sells all types of coffee'. The noun of 'to sell' is 'sale' or 'sales'. Companies often use 'sales' when they want to talk about how many products or services they are selling in a period of time (e.g. a year, month, week etc...). For example, 'our sales have been €34,623 this weekend' or 'sales are down compared to last year'. 'sales' is also used in shops/stores to mean a period of time when they reduce the price of some products. 'sales' in this context are very common after Christmas. In Spanish: "vender".

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3. A verb that means to 'give' money to somebody to buy a product or service, is

         

Pay:
(verb) The infinitive is 'to pay'. It has a similar meaning to the verb 'to spend'. But whereas 'to pay' means to give money to somebody for a specific product(s) or service (e.g. 'I paid £40 for these trousers' or 'I'm going to pay for the books'), the verb 'to spend' is not normally used to say how much money you 'paid' for a specific product(s) or service, but how much you 'paid' in general (e.g. 'I spent €100 at the restaurant' or 'I spend $200 a week on food and drink'). With 'to pay', if you want to say what you bought, you use the preposition 'for' in front of the name of the product or service, e.g. 'I paid €100 for the picture' or 'I'll pay for it'. In Spanish: "pagar".

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4. An adjective which means the amount of money that you should get/obtain (what its value is) if you sold something, is

         

Worth:
(adjective) 'to be worth' has the same meaning as 'is valued at'. It means the amount of money you should get in theory if you sold an object (e.g. a house, a car, a book, a business etc...). For example, 'how much is your car worth now' 'I bought it for €24,000 two years ago, but now it's worth about €18,000'. The noun of 'worth' is 'value'. If you want to say how much money the 'value' of something is, you use a possessive in front of the noun (e.g. 'its', 'the company's' etc..) then 'value', followed by the verb 'to be' and the amount of money. For example 'the house's value is €300,000'. In Spanish: "valer".

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5. A different way of saying 'buy', is

         

Purchased:
(verb) The infinitive is 'to purchase'. This means to obtain a product or service from somebody by giving/paying them money, e.g. 'where did you purchase your shoes from?'. 'to purchase' is just a formal way of saying 'to buy', but 'to buy' is more commonly used. The noun is 'purchase', which means the thing/object you have bought, e.g. 'if you are unhappy with your purchase, please return it'. In Spanish: "adquirir/comprar".

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6. When you spend more money on something you have bought than you should have, is

         

Overpaid:
(verb) The infinitive is 'to overpay'. In this context it means when you buy a product or service and you pay too much money for it (you pay more money than it's actually worth). For example, 'my brother bought the car for £12,000. I think he overpaid, you shouldn't pay more than £10,000 for that type of car'. The opposite of this verb (to buy something and pay less than it's actually worth) is the noun 'bargin', e.g. 'your new house is a bargin, you're paying €20,000 less than the market value'. You can also use ' it's good value' with the same meaning. In Spanish: "pagar demasiado".

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7. A noun which means the amount of money that you should get/obtain (how much it is worth) if you sold something, is

         

Value:
(noun) This commonly used noun has the same meaning as 'to be worth'. It means the amount of money you should get in theory if you sold an object (e.g. a house, a car, a book, a business etc...). For example, 'the company's value is about €1.2 billion'. When you want to say how much money the 'value' of something is, you use a possessive in front of the noun (e.g. 'its', 'the company's' etc..) then 'value', followed by the verb 'to be' and the amount of money. For example 'the house's value is €300,000'. When 'value' is used in the phrase 'it's good value', it means that you buy something and pay less money than its actual value or it's worth. In Spanish: "valor".

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8. When you sell something for less money than what you bought it for, you

         

Make a loss:
(phrase) This phrase is commonly used in financial/business English. It basically means to lose money (which is called a 'loss'). It is commonly used in two slightly different ways. The first is when either a person or company sells something for less money (e.g. a property for €340,000) than it cost to either buy or make (e.g. €380,000). They 'make a loss' on the sale. The second, is when a company's general/overall earnings/revenue (i.e. the money it makes/earns from sales) is less than the money that they spend on costs and expenses (e.g. rent, wages, production costs etc...) for a period of time (e.g. a year, 6 months etc...). For example, 'the company made a loss of $5.7 million last year'. For both uses of the phrase, if you want to say how much money the 'loss' is, you use the preposition 'of' after the phrase and the amount of money, e.g. 'I made a loss of €1200 on the sale'. In Spanish: "sufrir pérdidas".

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9. A verb that means that something is yours/your possession, is

         

Own:
(verb) The infinitive is 'to own'. This means that an object/thing is your possession, e.g. 'I own this company, it is mine'. The verb 'own' is normally used to talk about objects/things which are of high value (houses, companies, lands, cars etc...). The noun for this verb is 'owner' and has the same meaning, e.g. 'who is the owner of house?' 'I'm the owner of the house'. In Spanish: "ser dueño de/tener".

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10. When you sell something for more money than what you bought it for, you

         

Made a profit:
(phrase) 'to make a profit' is commonly used in financial/business English. It basically means to make or earn money (which is called a 'profit'). It is commonly used in two slightly different ways. The first is when either a person or company sells something for more money (e.g. a property for €380,000) than it cost to either buy or make (e.g. €340,000). They 'make a profit' on the sale. The second, is when a company's general/overall earnings/revenue (i.e. the money it makes/earns from sales) is more than the money that they spend on costs and expenses (e.g. rent, wages, production costs etc...) for a period of time (e.g. a year, 6 months etc...). For example, 'the company made a profit of $5.7 million last year'. For both uses of the phrase, if you want to say how much money the 'profit' is, you use the preposition 'of' after the phrase and the amount of money, e.g. 'I made a profit of €1200 on the sale'. In Spanish: "obtener beneficios/ganancias".

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11. When you pay money to live in a house that another person owns, is

         

Rent:
(verb) The infinitive is 'to rent'. This means to pay money to use an object/thing that somebody else (a person or a company) is the owner of. 'renting' is very common with houses, where you live in a house that another person owns and you pay them money each month to live there. Two other verbs that have a similar meaning to 'rent' are 'hire' and 'lease'. 'to hire' is used when you 'rent' machinery or vehicles (e.g. a car, industrial machines etc...) and 'to lease' is used when you 'rent' a commercial property or land (e.g. a shop, an office, farmland). Although 'to hire' and 'to lease' are used, most people say 'to rent' instead, e.g. 'we're renting a car when we're on holiday in France'. When you use 'rent' as a noun, it means the quantity you pay 'to rent' something, e.g. 'the rent for the house is €800 each month'. In Spanish: "alquilar".

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12. A word which means the 'quantity of money' an object or service is being sold at, is

         

Cost:
(verb) The infinitive is 'to cost'. This basically means the 'price'. The amount of money you have to pay to use or buy a service or a product/object. For example, 'how much did your TV cost?' or 'it costs about €30 to travel by taxi from the airport to the city centre'. It has a similar meaning to 'charge', but 'charge' is mostly used (but not always) to talk about about how much services (e.g. lawyers, hairdressers, taxi drivers etc...) cost and 'cost' can be used for both services and objects/things. With 'cost' you put the name of the object or service in front of the verb, e.g. 'the book costs $10' or 'it cost $6.50'. With 'charge', you put the name of the person/company who sells the service in front of the verb, e.g. 'taxi drivers charge €30 to travel by taxi from the airport to the city centre' or 'they charged me €7'. In Spanish: "costar".

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13. A verb which means the 'quantity of money you have to pay' to use a service, is

         

Charge:
(verb) The infinitive is 'to charge'. This basically means the 'price'. It is normally used to mean the amount of money you have to pay to use a service (e.g. lawyers, hairdressers, taxi drivers etc...). For example, 'the lawyer charges €38 per hour to talk to his clients'. It can also be used for products/objects, but is not common. It has a similar meaning to 'cost', but 'cost' can be used to talk about about how much money you have to pay for both services and objects/things. With 'cost' you put the name of the object or service in front of the verb, e.g. 'the book costs $10' or 'it cost $6.50'. With 'charge', you put the name of the person/company who sells the service in front of the verb, e.g. 'taxi drivers charge €30 to travel by taxi from the airport to the city centre' or 'they charged me €7'. In Spanish: "cobrar".

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Practice

Now that you understand the meaning of the words/phrases and when to use them, practise using them by creating your own sentences with them in English. Also click on the icon next to each correct answer and listen how each is pronounced correctly.