How Your Financial Vocabulary Stacks Up

Learning about finance is hard, especially at first. You may be tempted to just nod at all the terms and concepts as if you understand them and hope you pick up the real meanings along the way. No one wants to fake it until they make it with their own money, though.

Global training website the Knowledge Academy recently surveyed more than 1,100 Americans about the depth and breadth of their financial vocabularies. Strong majorities feel confident in defining a savings account or net worth, while slightly slimmer majorities can tell you what a recession or an IRA is. However, ask us about Bitcoin or liquidity and we're a lot more out to sea.

Research has shown that financial literacy plays a big role in how much you're able to enjoy your golden years. As Knowledge Academy spokesman Joseph Scott puts it, "For many, acquiring better knowledge on financial terminology will be essential for them to achieve a higher standard and quality of living." The best way to ensure that you know what you know is to drop any pretense that you know it all already.

If you're alone with a screen and working on personal finances, take a moment to look up any terms or phrases you don't recognize or you aren't entirely sure of. When you're meeting with a money manager or financial adviser, always feel free to ask questions, even if they seem basic or simple. The good ones won't make you feel bad for not being an expert. Start small, but don't let your nervousness get you down: The benefits of talking about money are so much bigger than the risks.