Money Dictionary
Clear explanations without jargon or pressure.
A
APRAnnual Percentage Rate
The yearly cost of borrowing money.
For example: Carry a $1,000 balance for a year at 20% APR and you pay roughly $200 in interest, a bit more once interest starts charging on interest.
Why it matters: Carrying a balance gets expensive fast.
Avalanche MethodDebt repayment strategy
Pay minimums on everything, attack the highest interest rate debt first.
For example: You have a 29.99% store card and a 20.99% credit card. Avalanche targets the store card first, then the credit card; regardless of the balances.
Why it matters: Mathematically optimal. Minimises total interest paid and gets you debt-free faster than any other approach.
C
Compound Interest
Returns that earn returns.
For example: Growth stacks on top of growth over time.
Why it matters: Time is the cheat code.
CPIConsumer Price Inflation
The official measure of how much prices are rising across a standard basket of goods and services.
For example: Canada's CPI rose 2.4% year-over-year in March 2026, meaning that basket cost 2.4% more than it did in March 2025.
Why it matters: CPI is how inflation gets reported. It drives Bank of Canada rate decisions, which flow through to your mortgage rate, your savings account rate, and your investment returns.
No article yetCredit Utilization
How much of your credit limit you're using.
For example: $300 used on a $1,000 limit = 30%.
Why it matters: Lower utilization usually helps your score.
CUSMACanada-United States-Mexico Agreement
The free trade deal that lets most Canadian goods cross into the US without paying extra tariffs.
For example: A Canadian auto part that meets CUSMA's rules of origin skips the 10% US import tariff. One that doesn't pays it.
Why it matters: Right now, CUSMA compliance is the difference between a 0% and a 10% tariff for most Canadian exporters. It directly affects what things cost at the store.
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E
EIEmployment Insurance
The federal program that pays temporary income to people who lose their job through no fault of their own, funded by premiums deducted from workers' pay plus a larger contribution from their employers.
For example: To get EI regular benefits you need between 420 and 700 hours of insurable work in your qualifying period, depending on the unemployment rate where you live, and you have to be ready, willing and able to work and actively looking for it.
Why it matters: EI pays up to 55% of your average insurable weekly earnings, to a maximum of $729 a week in 2026. The hours and availability rules are hard to meet while you're in school full-time, so it's no substitute for an emergency fund.
Emergency Fund
Money you set aside to pay for unexpected expenses, kept somewhere you can reach quickly without a penalty.
For example: Your laptop dies in November. The emergency fund pays for the replacement, so it doesn't go on a credit card balance you can't clear.
Why it matters: The Financial Consumer Agency of Canada suggests working toward 3 to 6 months of regular expenses. If your income arrives in lumps, a smaller buffer that bridges the gap between deposits is a more reachable first target.
ETFExchange-Traded Fund
A basket of investments you buy like a stock.
For example: 1 ETF can hold hundreds of companies.
Why it matters: Easy diversification without picking winners.
G
GDPGross Domestic Product
The total dollar value of everything an economy produces in a given period: goods, services, all of it.
For example: Canada's GDP contracted 0.1% on an annualized basis in Q1 2026, meaning the economy produced slightly less than the quarter before.
Why it matters: GDP is the scoreboard for the whole economy. When it shrinks, businesses get cautious, hiring slows, and the effects trickle down; including to the job market you're trying to enter.
No article yetGICGuaranteed Investment Certificate
A “lock-it-in” investment where you lend money to a bank for a set time, and get your deposit back guaranteed, plus interest.
For example: Put $1,000 into a 1-year GIC at 3% → after 1 year you get about $1,030 (before tax, if it’s in a non-registered account).
Why it matters: A GIC gives you predictable, low-risk growth but the trade-off is reduced access to your money until it matures.
Grace Period
The window between your credit card statement date and your payment due date where no interest is charged on purchases.
For example: Your statement closes May 1st. You have until at least May 22nd to pay the balance in full and owe zero interest on anything you bought that cycle.
Why it matters: Pay in full before the grace period ends and a credit card costs you nothing in interest. Carry a balance past it and you start accruing at 19.99%+.
Grant vs. Bursary vs. LoanStudent aid
Grants and bursaries are money you keep. A student loan is money you repay once you're done school.
For example: The Canada Student Grant for Full-Time Students pays up to $4,200 a year for 2026 to 2027 and is assessed from your provincial aid application. A bursary comes from your school instead and is awarded on financial need. A scholarship is also money you keep, but it's awarded for academic or other achievement rather than need.
Why it matters: Your OSAP total mixes grants and loans on one screen, and school bursaries sit outside it entirely. Knowing which is which tells you what you'll owe after graduation, and what money you may still need to apply for separately.
H
HISAHigh-Interest Savings Account
A savings account that can pay a higher interest rate than a regular savings account, without locking your money in for a set term.
For example: The advertised rate is often conditional. Some online accounts pay their top rate only with a recurring direct deposit, and a lower base rate to everyone else.
Why it matters: It's a common home for an emergency fund, because the money earns interest and stays reachable. HISA deposits at a CDIC member institution can be protected up to $100,000 per insured category; HISA ETFs and HISA mutual funds are not.
I
Inflation
When the general price level rises and your dollar buys less than it used to.
For example: If inflation runs at 3% and your savings account earns 2%, you are effectively losing purchasing power every year even though your balance is going up.
Why it matters: Inflation is the invisible tax on cash. It's why leaving everything in a chequing account long-term is actually a losing strategy.
L
Liquidity
Textbook definition: The ease and speed with which an asset can be converted into cash.
For example: Cash is fully liquid, something like a PS5 has cash value, but needs to be sold first.
Why it matters: Your emergency fund should be liquid; investments or “stuff” can take time to cash out.
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N
NSFNon-Sufficient Funds
Not enough money for a payment.
For example: Rent tries to pull, account is short → bounce + fee (RBC charges $45).
Why it matters: Fees stack + can trigger more failed payments.
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O
OSAPOntario Student Assistance Program
Ontario's financial aid program for college and university students, paid as a mix of grants you keep and a loan you repay.
For example: One OSAP application considers you for both grants and a loan. If you don't want the loan, you can decline it after your application is approved.
Why it matters: The total on your OSAP screen is two kinds of money. From August 1, 2026, more of the provincial portion arrives as loans rather than grants, so the split decides how much you'll owe after school.
R
RAPRepayment Assistance Plan
A federal student loan program that can lower your monthly payment, or pause it at $0 for six months at a time, based on your family income and family size.
For example: You finish school, your payment is $220/month, but you’re only working part-time. RAP can reduce that payment to something manageable while you get stable income.
Why it matters: It can prevent missed payments (and credit damage) while you’re in that “new grad / broke student” phase.
Rebalancing
Adjusting your portfolio back to its original target mix.
For example: Your plan is 50% Canadian, 50% international. Canada outperforms and drifts to 60/40. Rebalancing sells some Canadian and buys international to get back to 50/50.
Why it matters: Without it, your portfolio slowly becomes riskier than you want. All-in-one ETFs like XEQT do this automatically.
S
Snowball MethodDebt Repayment Strategy
Pay minimums on everything, attack the smallest balance first.
For example: You have $400 on a store card and $3,000 on a credit card. Snowball clears the $400 first for a fast win, then redirects that payment to the credit card.
Why it matters: Less efficient than avalanche mathematically, but the momentum from fully clearing a debt keeps a lot of people on track long enough to finish.
T
Tariff
A tax a government puts on imported goods (sometimes exports), usually to make foreign products more expensive.
For example: A 10% tariff is imposed to a $100 imported item, the importer may pay $10 extra, and the price in stores can rise.
Why it matters: Tariffs can push up prices (inflation pressure), affect what companies earn, and even influence jobs in certain industries.
No article yetTechnical Recession
Two consecutive quarters of negative GDP growth, the most common definition of a recession, even though it's not an official one.
For example: Canada posted -1.0% annualized GDP growth in Q4 2025, then -0.1% in Q1 2026. Two quarters in a row = technical recession, even if the decline was tiny.
Why it matters: The word technical is doing a lot of work in that phrase. It means the criteria on paper were met, but economists still argue about whether the economic damage is actually recession-level. It matters because the label affects business confidence, hiring decisions, and whether the Bank of Canada cuts rates.
No article yetTFSATax-Free Savings Account
A registered account where contributions and the interest, dividends or capital gains they earn are generally tax-free, even when you withdraw.
For example: The TFSA dollar limit for 2026 is $7,000. If you withdraw $1,500 in March, that $1,500 of room only comes back on January 1 of the next year, so putting it back in June without other unused room is an over-contribution.
Why it matters: It can hold cash, GICs, bonds, mutual funds, stocks and ETFs, and anyone 18 or older with a valid SIN who is a Canadian resident can open one. Over-contributions are taxed at 1% a month for as long as the excess stays in.
V
Volatility
How much a price goes up and down over time.
For example: Stock A moves between $90–$110 in a month (high volatility). A savings account stays at $100 (low volatility).
Why it matters: More volatility = bigger swings (riskier short-term), so match it to your time horizon.