Section: Word of the week

← Curating the web to find the most interesting and helpful information about your money.

Financial Advisor

A financial adviser is a professional that possesses the certifications, abilities and experience to help with a number of financial matters. The term's broad definition encompasses a variety of specialities and qualifications. A financial advisor may assist you in deciding how to manage your finances for long-term goals like retirement and your children's education, purchasing a home, or more immediate goals.

Choosing a financial advisor →

Credit Limit

The most you can spend with your credit card is determined by your credit limit. When you first receive a credit card, the issuer sets your limit. You can request a decrease or increase.

What Is a Credit Limit? How It's Determined and How to Increase It →

Credit Utilization Ratio

A comparison of your available credit to how much you have actually utilized. A good credit score can be attributed to a low utilization ratio. The ideal target is to use 30% or less of your available credit.

You can view your personal ratio with our Health Check →

Consumer Price Index (CPI)

A measure of the average change over time in prices paid by consumers, for a basket of consumers goods and services.

Why the Consumer Price Index (CPI) is Important →


An overdraft occurs when you do not have enough money in your bank account to cover a payment or withdrawal. These transactions may include: - Debit purchases - Bill payments and pre-authorized debits - Cheques - Withdrawals - Transfers between bank accounts

Learn more about getting overdraft protection →


The three-digit FICO Score, or a Beacon Score, determines whether your credit is good or bad. Fair Isaac & Company, also known as FICO, is a US-based business that sells Equifax and TransUnion Canada their unique rating system. When you apply for credit, lenders can quickly and reliably learn details about your finances thanks to the FICO Score.

Getting your credit report and credit score →


Typically, interest is paid on deposits to savings accounts. Your savings will increase as a result of the interest you earn on money you save, particularly if you have a higher-interest savings account. Simple interest - is paid on some investments and does not take into account the interest that has been added to the account; rather, it calculates interest just on the original amount. These investments often have a slightly higher interest rate. Compound interest - is the interest on savings calculated on both the initial principal and the accumulated interest from previous periods. Compound interest is the norm for savings accounts.

See an example of how simple and compound interest differ →


Governments and businesses both issue bonds as a form of investment. In exchange for a predetermined rate of return, you lend money to these organizations when you purchase a bond. Although historically yielding less than stocks, bonds are thought to be a safer kind of investment.

How to Buy Bonds in Canada →

Essential Expenses

These are expenses that are necessary. Another way to identify these expenses is to determine if they are 'needs' rather than 'wants'. Essential expenses might include: - Rent/Mortgage - Groceries - Utilities - Medical Expenses Unlike, restaurants, and entertainment, that are 'wants' or non-essential expenses and do not need to be made.

Follow every dollar - Track and analyze your non-essential expenses →


Credit is money that you may borrow from someone (like a bank or credit card company). You must consent to repaying them on a predetermined timeline, typically with interest, by signing an agreement. The four basic types of credit: - Revolving credit - Charge credit - Instalment credit - Service credit Each serves a different purpose and works in a different way.

Learn more about credit and why credit scores are important →


Any debt that lowers your financial worth is referred to as a liability, whereas owning an asset would raise it.

Learn more about specific liability types and examples →


An asset is anything you own that increases your financial value, whereas a liability is money you owe that would decrease your financial value. Assets include a laptop, bike, car, house, and bank accounts.

Learn more about specific asset types and examples →

Financial Literacy

Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing. The earlier you start, the better off you will be, because education is the key to success when it comes to money.

Financial Literacy: What It Is, and Why It Is So Important →

Non-Essential Expenses

These are expenses that are not necessary. Another way to identify these expenses is to determine if they are 'wants' rather than 'needs'. Non-essential expenses might consist of: - Coffee - Entertainment - Subscription services (Netflix, Disney+, etc.) - Meal delivery services (Uber Eats, DoorDash, etc.) These are unlike rent, mortgage, and food which are 'needs' or expenses that must be met.

Follow every dollar - Track and analyze your non-essential expenses →

Cost of Borrowing

The total cost for you to borrow money. This includes the principal amount of the loan, interest, fees and any other costs associated with the loan.

Keep track of all your debt and the true cost of borrowing →

Emergency Fund

This is money that's set aside as a financial safety net. Depending on how much you have saved, an emergency fund could cover long-term expenses if you lose your job or with short-term unexpected events.

Start tracking your emergency fund today →

Credit Score

"Your credit score is a three-digit number that comes from the information in your credit report. It shows how well you manage credit and how risky it would be for a lender to lend you money. Your credit score is calculated using a formula based on your credit report. Note that you: - get points if you use your credit responsibly - lose points if you have trouble managing your credit Your credit score will change over time as your credit report is updated."

Learn more about your credit score →

ETFs: Exchange-Traded Funds

"An ETF is essentially a basket of investments such as stocks or bonds. In this sense they’re similar to mutual funds, but unlike mutual funds, shares of ETFs can be traded throughout the day on an exchange, much like an individual stock."

Learn about the benefits of ETFs →

Net Worth

Your net worth is simply the difference between your assets (what you own) and liabilities (what you owe).

See your net worth and take the pulse of your overall financial health →

Annual Percentage Rate (APR)

APR stands for Annual Percentage Rate. It's the yearly interest rate you pay on a loan or credit card. However, a credit card's advertised APR isn't the true interest rate because it compounds daily.

Learn how to calculate the effective APR to find a credit card's true interest rate →

Compound Interest

Compound interest is the interest on savings calculated on both the initial principal and the accumulated interest from previous periods.

Discover the magic of compounding and why it's important to increasing wealth →

Deposit Insurance

Deposit insurance protects your savings if your financial institution fails. The Canada Deposit Insurance Corporation (CDIC) automatically insures your eligible deposits. This applies to deposits held at CDIC member institutions in Canada.

Find out if your financial institution is a member of CDIC →


Inflation is a persistent rise in the average level of prices over time.

Price check: Inflation in Canada →

GIC (Guaranteed Investment Certificate)

"Guaranteed Investment Certificates (GICs) and term deposits are secured investments. This means that you get back the amount you invest at the end of your term. The key difference between a GIC and a term deposit is the length of the term. Term deposits generally have shorter terms than GICs."

Learn about the key details before buying a GIC →