In our latest examination of finance terms, we turn our attention to the letter D. We hope that the series of articles we publish help you understand better some of the financial jargon used when companies and institutions sell their many products in a crowded and competitive market.
We all know a little or a lot about this term. Debt is simply money owed to one or more people or companies. If you have taken out a loan or a mortgage and are still in the process of making repayments, then you are in debt. Debt can be stressful, and a huge burden. But if controlled, it is a normal part of most people’s lives. If you struggle with debt, always seek advice. Stepchange are one such organisation who help those struggling.
Which brings us on nicely to our next topic. How you manage debt is key to whether you should be in debt or not. Debt that spirals out of control can ruin lives. Failure to pay off debt on time can lead to extra charges and thus extra debt. Debt management can also refer to companies that deal with those struggling to deal with debt. Management of debt can include taking certain legal routes to addressing the problem. This can range from an IVA to bankruptcy.
The name given to the individual or company that owes money. The debtor is the party making the repayments therefore.
Fall in the general level of prices of goods and services in the economy. The polar opposite of inflation. Deflation occurs when the inflation rate falls below 0%. Inflation reduces the worth of currency periodically, but deflation raises it. This permits more goods and services to be purchased than before with the same amount of currency.
A savings account from a bank or building society that pays interest on the amount of money held in it. Many of us will have such an account, tat rewards you for storing your money in a certain place.
A payment made by a company to its shareholders. The size of the payment is traditionally determined by the extent of the company’s profits. A common method in paying dividends is to do so twice a year. It should be pointed out that a company does not have to pay a dividend at all.