Money Basics

Income and Expenses

Income is money coming in. Expenses are money going out. Understanding both is the starting point for managing money.

4 min

Money 101 • 01

Money starts with two directions.

Income is money coming in. Expenses are money going out.

Income can come from more than a paycheque.

Wages are common, but income can also include self-employment earnings, benefits, pensions, interest or other sources.

Expenses can be regular or irregular.

01Rent or mortgage payments02Groceries and transportation03Phone, internet and subscriptions04Insurance and debt payments05Occasional costs such as gifts or repairs

Fixed and variable expenses behave differently.

More predictable

Rent, loan payments and some subscriptions may stay similar each month.

More flexible

Food, entertainment and transportation can change from month to month.

A simple month has money in and money out.

Income$4,000

Expenses$3,400

Difference$600

MeaningMore came in than went out

An expense is not automatically bad.

Housing, food, transportation and fun all cost money. The useful question is whether your spending fits your income and priorities.

Start by knowing the basic numbers.

01How much income usually comes in02Which expenses are required03Which expenses change04Which costs happen only occasionally

Remember this

Know what comes in and what goes out.

Everything else in personal finance gets easier once those two sides are visible.

Lesson complete

Reviewed 2026-08-18

Sources

Financial Consumer Agency of CanadaMaking a budget ↗Ontario Securities Commission, GetSmarterAboutMoneyGlossary ↗

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