Anyone who is starting to get their head around finance will need a guide on the terms that are commonly used. To help you get a better understanding of what you read, we’ll briefly be taking a look at some of the key financial terms you should know.

1. Asset

An asset is anything you own that adds financial value. This is opposed to a liability, which is money you owe. Examples of personal assets include your home, shares etc as well as other property, such as rental homes, commercial properties or a savings account.

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2. Emergency Fund

The term “emergency fund” refers to money put away that people can use during unplanned situations. The purpose of an emergency fund is to improve financial security by creating a safety net that can be used to cover unanticipated expenses.

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3. Gross Income

Gross income for an individual — also known as gross pay when it’s s on a payslip — is the individual’s total pay from their employer before taxes or other deductions.

4. Individual Savings Account (ISA)

ISA stands for an individual savings account. This is a savings account whereby the income earned by the money invested will be free of tax. In the UK, the tax-free limit across all ISA accounts is £20,000 per tax year (April-April). You are able to use that limit across multiple different ISA's that you may hold.

For example, you could put:

• £4,000 into a LISA (read more here)

• £9,000 into a JISA (Junior ISA account)

• £7,000 into a Stocks and Shares ISA (Investment ISA account)

The money in this savings account, including any interest earned, is tax-free.

5. Interest Rate

An interest rate is a percentage charged on the total amount you borrow or paid on the amount you save. If you’re a borrower, the interest rate is the amount you are charged for borrowing money. If you’re a saver, the interest is paid to you – because banks are paying to 'hire' your money.

6. Liability

Liabilities are the amounts you owe to creditors or the people/organisations that lend you money. Typical liabilities include your mortgage, car and educational loans, and credit card debt. In business, liabilities refer to money a company owes its creditors and any claims against its assets.

7. National Insurance

Most employees, employers and self−employed people pay national insurance. You can see your NI contribution on your payslip. The National Insurance Fund is used to pay out benefits such as Jobseeker's Allowance, retirement pensions and Widow's Benefit.

8. Net income

At its most basic, net income defines a persons’ total earnings or profit. Simply put, net income is what you get when you subtract all expenses (including any taxes that you may pay) from revenue. When a persons' net income increases, it’s normally a result of either increased revenue or a decrease in expenses.

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9. Side Hustle

A side hustle is a job that you can work on top of your full-time job. It is a flexible second job that brings in money, but it is also typically something that you are passionate about, that you don’t get to pursue in your main job.

10.  Stocks

Stocks are portions/shares of ownership in a company. Companies sell shares or stocks to raise money for developing products, paying debts and growing their business. When individuals or entities buy a company's stock, they are investing in that company.