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Liability
Money you owe to someone else. The opposite of an asset.
Example
Your older sibling has $300 in their savings (an asset) and a $500 phone bought on a payment plan they still owe $400 on (a liability). On paper, their financial position is $300 minus $400, which is negative $100.
How it fits in
Liabilities are loans, credit-card balances, and other commitments to pay later. Some liabilities buy assets that grow faster than the interest costs (a sensible mortgage, a business loan with strong returns). Most household liabilities just buy expenses and add interest on top. The first kind can be useful. The second kind is what most personal-finance trouble is made of.
Where this is taught
Related terms
When the money you earn from saving starts earning its own money on top.
Interest paid only on the original amount, never on the interest you have already earned.
Needs are the things that keep you safe and well. Wants make life nicer. Mixing them up is what empties most budgets.