Income vs. Expenses: What's the difference
Learn the difference between income and expenses in simple terms! Understand how money flows in (income) and out (expenses) with relatable examples. Perfect for teens starting their money journey! 💵
Let’s talk about something that is super important when we use money: income and expenses. Knowing the difference is key to managing your money.
Income is the money you make or receive. It could come for example, from your allowance, part-time job paycheck, or even birthday money from your relatives.
If you make $50 a month babysitting, that $50 is your income.
It’s the money coming into your wallet.
Expenses, on the other hand, are the things you spend your money on. Think about snacks, movie tickets, or even school supplies. If you spend $10 on snacks or $15 on a T-shirt, those are your expenses. Some expenses are for fun (wants), while others are things you need (like school supplies or bus fare).
Why does this matter? The goal is to have more income than expenses so you don’t run out of money. For example, if you make $50 in income but spend $60, you’ll be $10 short and might need to borrow. But if you track your spending and keep it below $50, you’ll have money left to save or spend later!
Key takeaway
Understanding income and expenses helps you stay in control of your cash. It’s your first step toward managing money smartly!