When your balance goes below zero, the bank may apply an overdraft fee—the charge you pay for spending more money than you have in your account. This fee is the penalty tied to overdrawing, a service the bank provides when it covers the shortfall. A deposit is simply adding money to your account, which would raise your balance. A withdrawal is taking money out, an action that can lead to overdrawing but isn’t the fee itself. A balance is just how much money you currently have. Some accounts offer overdraft protection or can decline transactions to avoid the fee, but the overdraft fee is the specific charge for overdrawing.

A loan is when you receive money now and promise to pay it back later, usually with extra money called interest. The amount you borrow is the principal, and the interest is the cost of borrowing. The total you repay equals the principal plus the interest, and you repay it according to an agreed schedule or contract that lists the due dates and the terms. This setup explains why a loan is about paying back money you borrowed, not a gift or an automatic increase in value. It’s not just money you borrow without an agreement, and it’s not an investment that grows on its own. For a simple example, borrowing $100 at 5% interest would lead to $105 owed if you kept the loan for a year without making payments along the way.

A financial goal is a specific target for saving or earning money within a certain time frame. This kind of goal is concrete and time-bound, so you know exactly how much to save and by when you want to reach it. It helps guide your spending decisions and gives you a way to measure your progress toward that target. The other ideas describe money-management tools or items (like planning how you spend money now, borrowing money, or where you store money), but they aren’t the end target themselves. For example, aiming to save a specific amount by a specific date—in this case, saving $500 by the end of three months—illustrates a financial goal.

The main idea here is naming money you owe to someone else. When you borrow money or owe payments, that amount is called debt. It’s the exact word for what you owe. Wages are money you earn for working, not what you owe. An expense is money you spend to buy something or a cost you must pay, which is money going out, not the amount you owe. Credit can mean the ability to borrow or the balance on a charge account, but it isn’t the word for money you owe itself. Debt best fits the idea of money that is owed.