What is the definition of income?

Income is defined as money earned from a job or other sources. This includes wages, salaries, bonuses, rental income, interest from savings, dividends from investments, and any other form of payment received for goods or services rendered. The concept of income is fundamental in financial literacy as it influences budgeting, savings, and overall financial planning.

Understanding income is crucial because it forms the basis for assessing an individual’s financial health. It helps determine how much can be spent, saved, or invested. Unlike gifts or investments, which may not be reliably recurring or may require capital intervention, income must be actively generated through labor or resources. This distinction is important for effective personal finance management and goal setting.