What Is Income?
Money coming in — and the different ways it can arrive.
What is income?
Income is money coming in. Any time new money arrives — from pocket money, a job, or anything else — that's income.
It's different from money you already had. If you already have $20 saved up, that $20 isn't new income — it's savings from income you received before.
Where can income come from?
A few ways money can come in for kids:
Pocket money
Given regularly, like every week.
Doing a job
Earned by doing work, like washing the car.
Selling something
Money from selling something you own.
A gift
Money someone gives you — not quite the same as "earning" it, but it's still money coming in.
Income vs. savings
Income is money coming in. Savings are money you've kept rather than spent. They're related, but not the same thing.
Money coming in this week.
Kept in the Save jar instead of spent.
You received $5 of income. $2 of it became savings — but it started out as income.
Once income arrives, what do you do with it?
If you receive $5, you get to decide what happens to it. You could spend some, save some, or give some away — that's the whole idea behind a Spend, Save & Give system.
Think about it
Have a go at these before checking the answer.
You receive $10 for washing the car. Is that income?
Yes. It's new money coming in, earned by doing a job.
You already have $20 in your Save jar. Is that $20 new income?
No. It's savings from income you received before — not new money coming in right now.
You receive $5 pocket money and save all of it. What happened to your income?
The $5 was still income when it arrived — saving it doesn't undo that. You just chose to keep it instead of spending it.
Grown-ups can have several different kinds of income: wages or a salary from a job, business income if they run their own business, interest on money in a bank account, and investment income from things they've invested in.
Some types of income can also involve tax — money that goes to the government — but that's a bigger topic for another lesson. For now, the main idea is simply that income can come from more than one place.
A simple way to reinforce this lesson is to talk about the different ways money comes into your household — without needing to share exact amounts.
Where to next
Once you understand money coming in, the next question is what happens to it. That leads to:
For the full real-world system this is based on — $5 a week, physical jars, and a savings goal your child chooses — see the pocket-money guide.
Next lesson: What Is an Expense?
Money comes in as income. Next, learn what happens when it goes back out.