Clear definitions of 24 key concepts — from inflation and compound interest to ERIP and self-employment in Belarus. Each explanation takes about half a minute to read.
Educational material. Not investment advice.
Financial literacy is the ability to manage money wisely — budgeting, saving, investing, using credit, and spotting scams. A financially literate person makes informed decisions about income and spending, builds an emergency fund, and understands how inflation and interest rates affect their savings over time.
Inflation is a sustained rise in the general level of prices, which reduces money's purchasing power. With 10% annual inflation, something that cost 100 rubles costs 110 a year later. That's why cash kept at home loses value, and savings are better protected through deposits or investments.
Compound interest is interest charged not only on the original amount but also on previously earned interest. As a result, savings grow faster over time. For example, 1,000 rubles at 10% a year becomes 1,100 after year one and 1,210 after year two — interest earns interest.
A personal budget is a plan of income and expenses for a set period, usually a month. It shows how much money comes in and where it goes, allocating funds for essentials, savings, and wants. A popular rule is 50/30/20: half for needs, 30% for wants, 20% for savings.
An asset is something that brings in money or can grow in value — a deposit, stocks, or a rental property. A liability is something that takes money away — a loan, an expensive car, an unused subscription. Financial stability improves as you build more assets and fewer liabilities.
Liquidity is how quickly an asset can be turned into cash without losing value. Money in an account is highly liquid; real estate is not — selling it takes weeks or months. High liquidity matters for an emergency fund, so the money is available whenever you need it.
An emergency fund is a reserve of money for income loss, illness, or urgent expenses. Experts usually suggest saving three to six months of typical spending and keeping it easily accessible — in a savings account or a withdrawable deposit. The fund protects you from debt when the unexpected happens.
A bank deposit is money placed in a bank at interest for a set term. The bank pays the depositor a return in exchange for using the funds. Deposits can be fixed-term or on-demand, in Belarusian rubles or foreign currency. It's a simple, low-risk way to protect savings from inflation.
A savings account is a bank account that earns interest while keeping money accessible — you can top it up and withdraw almost anytime. The rate is usually lower than a fixed-term deposit, but flexibility is higher. It's a convenient place to keep an emergency fund.
Diversification is spreading money across different assets to reduce risk. If you put everything into one company and it fails, you lose everything; if funds are split among stocks, bonds, and currencies, a loss in one is offset by others. In short: don't put all your eggs in one basket.
A stock (share) is a security that gives its owner a slice of a company. A shareholder can receive part of the profit as dividends and gain from a rising share price. Prices can also fall, so stocks are considered riskier but potentially more rewarding than a bank deposit.
A bond is a debt security: by buying it, an investor effectively lends money to a government or company and receives fixed interest, with the principal returned at maturity. Bonds are usually less risky than stocks and provide more predictable income, so they anchor the stable part of a portfolio.
Dividends are the portion of a company's profit distributed to its shareholders. The size and frequency depend on the company's decision: some pay quarterly, others don't pay at all, reinvesting profit into growth. For an investor, dividends are passive income on top of any rise in the share price.
An ETF (exchange-traded fund) is a ready-made basket of dozens or hundreds of securities that trades on an exchange like a single stock. By buying one ETF share, an investor instantly gets diversification without picking securities by hand. ETFs are a popular, low-cost way to start investing with a small amount.
Currency risk is the chance of losses from changes in exchange rates. If you earn in Belarusian rubles but save in dollars, rate swings change the real value of your money. You can reduce this risk by holding savings in several currencies and matching your income currency to major future expenses.
A loan (credit) is money a bank lends on the condition that it's repaid with interest by a set date. The true cost comes not only from the rate but also from fees, insurance, and term. Before borrowing, compare the total overpayment and ensure the monthly payment fits comfortably within your income.
A credit history is a record of how a person has taken out and repaid loans. In Belarus it's maintained by the National Bank's Credit Register. A good history with on-time payments improves the odds of approval and a favorable rate, while missed payments damage it and complicate future borrowing.
ERIP (the Single Settlement and Information Space) is a Belarusian system for paying for services: utilities, telecom, taxes, fines, and tuition. A payment is made by the service number in a banking app, kiosk, or at a teller. ERIP unites thousands of providers, so most regular payments in Belarus go through it.
Income tax is a tax on individuals' earnings. In Belarus the standard rate is 13%; certain types of income are taxed at other rates. For wages, the employer usually withholds and remits the tax, so employees receive their pay after tax. Tax deductions exist that reduce the taxable amount.
A self-employed person is an individual who independently provides services or sells their own products and pays a professional-income tax without registering as a sole proprietor. In Belarus, self-employment is set up through the 'Profnalog' app, and the tax is calculated automatically. It's a simple, low-cost way to operate a small business legally.
The Belarusian ruble (code BYN) is the official currency of the Republic of Belarus, divided into 100 kopecks. The current ruble was introduced in 2016 after a 10,000-to-1 redenomination. Its rate against the dollar, euro, and Russian ruble is set through trading on the Belarusian Currency and Stock Exchange.
The refinancing rate is the base interest rate set by the National Bank of the Republic of Belarus. It influences loan and deposit rates across the country: the higher the rate, the costlier loans and the more rewarding deposits. The National Bank adjusts it to manage inflation and the economy.
A financial pyramid (Ponzi scheme) is a fraud where returns to earlier participants are paid from new participants' money, not real activity. Warning signs: guaranteed high returns with no risk, pressure to 'invest now,' and rewards for recruiting friends. When new money dries up, the pyramid collapses and most people lose their funds.
Phishing is a type of fraud where criminals trick you into revealing card details, passwords, or codes by posing as a bank, store, or government service. They use fake websites, emails, and calls. The key rule: never share your CVV, PIN, or one-time SMS codes, and always check the website address before entering data.
