Income: How Money Comes to You

Lucy is twelve years old. She lives in Riverton with her parents and her brothers, Jack and Max. This week, her teacher gives the class a project: find out how families earn money. Lucy decides to ask her own family at dinner.

At the kitchen table, Lucy puts out a notebook. She says, "Everyone, I have a school project. Tell me how you get your money."

Dad goes first. He says, "I am a nurse at Riverton Hospital. The hospital pays me the same amount every month, no matter how many hours I work this week."

Mom says, "I am a designer. I work for different shops. Some months I have a lot of jobs and some months only a few, so my pay changes."

Grandma Rose, who is visiting for dinner, says, "I own the bakery. After I pay for flour, wages and the rent, whatever is left is mine."

Grandpa Ben says, "I used to drive a bus. Now I get a pension, and a little interest from the bank on my savings."

Lucy writes it all down. Max, who sits at the end of the table, says that he has income, too: $2 for sweeping the floor of the bakery. Lucy laughs and adds it to the list.

Types of Income

Lucy sees that her family gets money in different ways.

A salary is a fixed amount of pay for a job. Freelance workers do separate jobs for different customers, so their income changes. A business owner earns profit, which is what is left from sales after all costs. And interest is money that a bank pays you for keeping your money there.

All of these are sources of income. Some are steady, and some are not. Families often have more than one source, which helps when one of them changes.

Back to the Project

Lucy thinks about her own income. She gets pocket money from Dad every week, and sometimes she earns a little for helping at the bakery. She writes at the bottom of the page, "I have two sources of income, too."

The next day, Lucy shows her notebook in class. The teacher says, "Excellent. What did you learn?"

Lucy says, "Money comes into a family in many different ways. And having more than one source is a good idea."