Ever heard a money word and thought, "what does that even mean?" Here are 5 essential financial terms in plain language – no jargon, just clear Kenyan examples.
Have you ever heard a financial term and quietly wondered, "What does that even mean?" If so, you are in the right place. Today we explain some of the most important money words in very simple language – no jargon included. Simple enough for a 15-year-old to follow.
Understanding these five words is the foundation of every smart money decision you will ever make. Once they click, investing and saving stop feeling intimidating – and start feeling doable.
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In simple terms, an investment is money you send out to work for you. It is money you are telling, "I don't need you right now – go out and come back with friends."
Sometimes it comes back bigger. Sometimes it takes time. But the goal of investing is always the same: growth. Here is the simplest way to remember it – saving is money resting, but investing is money working. In Kenya, that could mean a money market fund, Treasury Bonds, or shares on the NSE.
Savings is simply money you choose not to touch because you know tomorrow will come. You are telling it, "Stay here – I'll need you soon."
When you save, you create breathing room for yourself. You give future you options instead of panic. Think of savings like putting food in the fridge for tomorrow: it's there, ready, the moment you need it.
A stock is a small piece of a company that you can buy – which means you own a tiny part of that business. Buy Safaricom shares, for example, and you own a sliver of Safaricom.
When the company does well and earns profit, the value of your stock can go up, and you can sell it later for a profit or earn dividends. But if the company performs poorly, the value can go down too. So buying a stock means being ready to own part of that company and grow with it over time. Here's our beginner walkthrough on how to buy shares in Kenya.
Interest is the extra money your money earns. If you save or invest Ksh 1,000 and later see Ksh 1,100, that extra Ksh 100 on top is the interest your money has earned.
Think of it like lending someone your phone charger – and getting back the charger and a power bank included. You end up with more than you started with, simply for letting your money sit in the right place.
This last one is powerful. Compound interest is where your interest starts earning interest too.
Your money grows, and then that growth also grows. That is how money turns into serious money over time – without you ever having to add new money. It is the single reason a small amount saved consistently can become a large sum, and exactly why consistency is the real cheat code to building wealth.
| Term | In Plain Language | Remember It As |
|---|---|---|
| Investment | Money you send out to work and grow for you | Money working |
| Savings | Money you keep safe for soon, not to touch | Money resting |
| Stocks | Small pieces of a company you can own | Owning a piece |
| Interest | The extra money your money earns | The power bank bonus |
| Compound Interest | Interest that earns its own interest | Growth on growth |
At Buildyourwealth, we help Kenyans turn these simple ideas into a real, personalised plan – where to save, where to invest, and how to let compound interest grow your money over time. Knowing the terms is step one; building the habit is where we come in.
That's all for today. Thank you for reading this far.
Finance only feels confusing because of the jargon. Strip that away, and the core ideas are simple enough for anyone to understand – and act on. You now know five of the most important ones.
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We wish you well. See you next time.
Disclaimer: This article provides general financial education and should not be considered personalised investment advice. All investment decisions carry risk. Please consult a licensed financial consultant before making investment decisions. All information is current as of June 2026.
Linda Jerono is a CPA Finalist and financial coach with a Master's degree in Accounting & Finance. She specializes in personal wealth management and financial education for Kenyans. With years of experience helping individuals, couples, and businesses navigate money management, Linda combines practical expertise with a passion for demystifying finance and empowering people to build sustainable wealth.
Build Your Wealth is a financial coaching platform founded by Linda Jerono to help everyday Kenyans master money management, invest wisely, and build lasting legacies. We offer personalized one-on-one coaching, practical financial guides, and educational resources covering budgeting, debt management, investing, retirement planning, and business finance—all tailored to the Kenyan context.
Savings is money resting — money you choose not to touch because you will need it soon, kept safe and accessible. Investment is money working — money you send out to grow for you over time. In short: saving keeps your money safe for tomorrow, while investing puts it to work so it can grow.
Compound interest is when your interest starts earning interest too. Your money grows, and then that growth also grows. Over time this turns small, consistent amounts into serious money — without you having to add new money. It is why starting early matters so much.