5 Four-Letter Words You Should Be Using in Personal Finance

This is a post from Jason over at Redeeming Riches. Jason is a financial planner by day and a personal finance blogger by night. Be sure to subscribe to his posts in a reader or by email.

No, I’m not going to list some new vocabulary words for you to use when your account goes down by 20%. Sorry to disappoint.

Instead, I’m going to share with you five 4-letter words that should be in everyone’s vernacular when it comes to their money and finances.

Take a look at the list and see if you are using these important 4-letter words!

1. Save

This should be a common word used in your household.

How much are we going to save and where are we going to save it are extremely important questions to be asking yourself regularly.

What this recent economic downturn taught us is the importance of having some savings built up in case a major crisis hits (i.e. job loss etc.).

The average savings rate has gone up to about 5% according to the Bureau of Economic Analysis.

This is a good trend especially when you look at the chart to see where the savings rate has been in the last several years – but there’s still major headway that could be made. Make sure that “save” is a regular word you’re using.

2. Give

Giving is a key part of being a good humanitarian.

You’ve heard the old saying, “It’s better to give than to receive”. Why is that? Because when we’re less consumed with ourselves and more concerned for the welfare of others it benefits them and brings us more joy!

The most miserable people in the world are generally the ones who are self-absorbed misers.

There are countless numbers of poor, weak and downtrodden folks who are waiting for us to be a Good Samaritan.

Whether you give money to the homeless, volunteer in a soup kitchen, give to organizations that provide relief for the under-privileged – you should find something that you are actively giving your time and money to.

3. Risk

Risk is a four-letter word that gets used often, but many times in the wrong way. What I mean is that most people often assume they are a riskier investor than they really are.

It seems like people love risk in a bull market and can’t stand it in a bear market.

It’s important to review how much risk you are willing to take so that you can create a well-diversified portfolio that should generate more consistent returns with less volatility.

4. Roth

If you qualify for a Roth IRA, this is one four-letter word you don’t want to ignore.

What exactly is a Roth IRA? Basically it’s an Individual Retirement Account with after-tax contributions and tax-free withdrawals.

Given where tax rates are currently (low) compared to where they’re going to be in the future (high), it makes sense to check this type of account out now and put it to good use.

5. Debt-Free

OK you got me, that’s two four-letter words put together, but the point is learning to use these words together will help you get on track for your financial goals so much more quickly.

Resolving to be debt-free is a decision you won’t regret. Sure, it’ll take some discipline, hard work and a lot of sacrifice, but it’ll be so worth it in the end.

How do you become debt-free? First you need to make a decision to go for it. Secondly, put a plan in place to cut back on expenses, increase income if possible and use as much discretionary cash flow as you can to start knocking out your debt!

There you have it. Five four-letter words that are OK to say in front of your kids and even better to implement in your personal finance journey!


  1. I agree with Ann about “give” not being too big. So long as the essence of care and concern for a fellow is there.

  2. “Give” is one of those I see everywhere but have never really incorporated into my personal finance plan. Anyone have any good advice on how to break through and get this done?

  3. Gotta stress the best of the above is debt-free 🙂
    You’d be surprised how that opens up your life to so many possibilities and options when you don’t have debt to pay off, including the mortgage being gone. Following the other 4-letter words will get you to debt-free. Set your goals, track them, be excited with your progress, and it will further feed your motivation to succeed! It’s worth it!

  4. Writer’s Coin – That’s great you want to incorporate giving into the plan!

    The best advice I’ve gotten is to actually incorporate it into your budget and then one of the first “checks” you write is for your giving – that way we don’t wait til we “have money” to do it and it’s always top of mind.

  5. These are some good ideas. However, in the case of a Roth IRA or any type of retirement fund, this is not always possible for lower income families. (The Lower middle Class to Lower Class). I’d love to hear more about that kind of American. These are the people who work hard all their lives but, perhaps, have no education. They are blue-collar workers..the everyday laborers. They barely earn enough to survive and have no intention of retiring. It isn’t even a possibility for them. In the old days, people didn’t retire at all. They worked hard all their lives. Then when they became ill and elderly, family would step in and help. Has anyone done a study on when this “Retirement” mentality was invented?

  6. “Give” doesn’t have to be big. $10 to the food bank, a bag or two of groceries to the soup kitchen (watch the BOGO at the grocery store). Clean out your closets and bring gently worn clothes (especially winter items right now) to a local shelter.

    “TIME” (another good 4 letter word actually for PF) can be donated: work at a soup kitchen, volunteer at a park clean-up, Big Brothers/Big Sisters. Girl Scouts and Boy Scouts are always looking for people to give some time. Help out an elderly neighbor with some yard work or simple home repairs.

    How about a four letter word that should NOT be used in PF: oh-oh 🙂

  7. Jason

    I am afraid this trend is absolutely a temporary one. Once the economy turns up and things start looking better then people will go back to their old ways. Hard to get rid of old ways. 5% savings rate in 2nd quarter of 2009 and close to 4% in third quarter is a sign of that.

  8. Craig – I agree, sometimes we need to take a step back, make our personal finance simpler and stay focused.

    Marci – you bring up a good point about the other 4-letter words leading to the debt-free. When you’re ocmmitted to savings, willing to give to others and focused on getting out of debt it CAN happen!

  9. I really enjoyed this piece from Jason, and your comments. One thing I’d like to emphasize about giving is that it doesn’t have to be overly formal. Put giving back to others at the front of your mind and go about your day. You will find opportunities all around you.

    The single mom in front of you at Walmart with two kids in the shopping cart digging through her purse to find another $8.73 or decide between putting back formula or hamburger meat. The family you heard about at church who got their power cut off because the dad lost his job, and the mom’s part time job cut back on her hours.

    Marci’s correct – when you are debt free you have so much more to give, and I personally believe God puts people in your life to bless them. Some with money, some with time, some with simply a kind word on a tough day.

  10. I agree that debt-free is paramount among this list. It has helped my family be able to do the other items with consistency, including giving.

    Please don’t underestimate the power of giving. Not only do you get to help out others in need, but you will see a change in yourself and your relationships with others. Giving rocks.

  11. Thanks Mylinda!

    Dustin – you’re right. It seems counter-intuitive that giving time/money/stuff etc away would lead to greater joy, but it does. Hoarding and keeping things for our own selfish desires rarely satisifies like we think it will.

  12. I would add “make”.
    A good financial plan is nothing if you don’t “make” enough money 😉

    Things are getting a lot more easier when you find out ways to increase your income, especially when it comes down to pay off debts or save money for retirement.

  13. GOAL is another four letter word to get us all to financial health. Anchoring ourselves to our goals motivates us to go through all of those extra steps to get to truly live out “platonic” lives. Great article!

  14. I agree with Dustin, I believed that if a person is debt free, you can do all the other four letter words that should be used in personal finance most especially the four word letter ‘give’. If you are debt free you will have more savings that can be used in helping other people who are in great need like those affected by calamities and other natural disaster. Also by being debt free you can save more money and can risk for something you think can generate more profit for you.

  15. Having all said in this article, I think what matters most is how an individual handles financial responsibilities and how to use such wisely. In addition, I also thought of this ALL 4 words will work if SAVE first comes first before anything else. 🙂

  16. Thanks for all your comments everyone – I love the additional words you are coming up with!

    Goal is another great word `to use for sure. Without goals we don’t know what we’re aiming for.

    Additionally, I would challenge us to give even before we’re debt free and while we are saving. Sometimes I think we make excuses (I know I do) to not give or to give less than we should be.

  17. Great article and website. I’ve been really trying to get my finances in order before the new year so I picked up a new book called “The Debt-Free Millionaire” by Anthony Manganiello. As I hope to retire in 20 years with financial security. The book has really opened my eyes to financial planning.