The Recession Glossary

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The recent economic uncertainties have given rise to an array of new financial terms. Certainly you have heard of terms such as staycation and bailout over the last few years; some of these terms have become so common that they are now included in major dictionaries. Below are 15 of the top recession terms; feel free to add yours in the comments section. (See also: 25 Frugal Changes You Can Make Today)

1. Stress Test

Derived from cardiac stress tests, a financial "stress test" is an assessment of a bank's ability to survive a potentially deteriorating economy. It ensures that banks have sufficient capital reserves to avoid liquidity problems in a downturn.

2. Consumer Confidence

A measure of consumers’ confidence in regards to the economy. Indicating the general public's optimism about economic activity, the consumer confidence level tends to be directly correlated to GDP growth and the employment rate.

3. Funemployment

This refers to enjoying one’s time during unemployment. Funemployment does not mean people are not actively seeking employment or are happy with their lack of jobs. However, it does mean they are taking this opportunity to spend time doing things they would not normally have time for and enjoy.

4. Insource

The opposite of outsource, insourcing is performing duties yourself that were once outsourced to other parties in order to cut costs in times of financial hardship. For example, cooking at home while previously ordering takeout.

5. Staycation

Taking a staycation refers to vacationing at home or close to home due to financial constraints. This can include a fun family night at home, barbeques with friends, or even short trip in the nearby area.

6. Underwater

When your current home value is below its current outstanding mortgage value, it's "underwater," making refinancing virtually impossible, as you owe more then the value of your home. This phenomenon has been the primary cause of record level of home foreclosures in the recent years.

7. Bailout

This refers to providing financial aid to failing or near-collapse corporations. The term became widely used during the financial meltdown of many corporations in 2008. Merriam-Webster named “bailout” its “Word of the Year” in 2008.

8. Madoffed

Named after ponzi scheme runner Bernard (Berni) Madoff, it refers to individuals who have been conned out of their life savings by their brokers, bankers, or advisors.

9. Recesionista

A fashionable individual who maintains his or her current life standards by finding creative means during harsh economic times. With the recent economic conditions, more and more people are aiming to live a frugal lifestyle while maintaining some of the pleasures of their prior luxuries.

10. Intaxication

Derived from intoxication, intaxication is an intoxicating feeling one feels upon receipt of their tax refund. In financially difficult times, even a small tax refund can go a long way.

11. Zombie Bank

A bank with a negative net worth. Although these banks have higher liabilities than assets, they can continue business as usual thanks to government backing and handouts.

12. Homedulgence

Similar to staycation, this refers to the tendency of indulging and entertaining at one’s home versus going out due to financial constraints.

13. Bleisure

As more people opt to work from home, the division between business and leisure hours have blurred. Whereas previously there has been a concrete divide between work and leisure time, workers are now managing the two simultaneously.

14. Stagflation

A combination of stagnated economy, i.e. no growth, combined with a very high inflation rate.

15. Double-Dip Recession

A double-dip recession refers to a recession followed by a short term recovery that then back into another recession. Also referred to as a “W-shaped” recession.