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How people make money and how it’s taxed

  • 07-12: Young Kids
  • May 2024
  • Premier America
Have you ever wondered how people make money and why some of it goes to the government in the form of taxes? This might sound complicated, but we’ll make it fun and easy to understand. Think of it as learning the rules of a big game where earning money and paying taxes helps everyone in the community. Ready to find out how? Let’s go!
Different Job Choices  Just like choosing a character in a game, people pick jobs that fit what they like and what they're good at. Someone who loves animals might become a vet, while someone who enjoys building things might become an engineer. Your interests, what you're good at, and what you learn all help decide the job you might do. 
Improving Earning Abilities  Imagine you're playing a game where you level up by learning new things—real life can be similar! By gaining new skills or knowledge, like a chef learning to cook new recipes or a computer programmer learning new coding languages, people can earn more money. It’s all about growing and getting better at what you do!
Different Ways to Be Paid

Money can come in different forms depending on the job: 

  • Wages are paid by the hour. Think of it like earning coins for each hour you play a game. 
  • Salaries give you a set amount regularly, like getting a treasure chest at the end of each month. 
  • Commissions are earned by helping sell something, like getting a bonus star for every level you help your team win.
  • Tips are extra thank-you’s people give for great service, like extra points for being super helpful or friendly. 
Earning by Owning a Business  Some people create their own jobs by starting businesses. This could be opening a bookstore, starting a website, or even inventing a new toy. These creators are called entrepreneurs, and they earn money from customers who buy their products or services.
Earning from Lending or Renting  You can also make money by letting others use something you own. For example, if you have a bicycle you're not using, someone might pay you to rent it for a day. Just like in games where you can rent out your spaceship to other players for missions. 
Receiving Money as Gifts or Allowance Sometimes, kids receive money as gifts on birthdays or a small amount regularly called an allowance. This money isn’t for work done but is given to help learn how to manage money. 
How Income is Taxed  When people earn money, a part of it goes to the government as taxes. Think of taxes like a membership fee for living in a place that provides parks, schools, and roads. Everyone chips in a little so everyone can enjoy the benefits. 

Making and managing money might seem like a grown-up game, but it's something everyone can learn about, even kids! Whether it’s earning money by working, starting a business, or responsibly using gifts and allowances, every bit helps us take part in our community. Remember, paying taxes is a way of giving back so that everyone has nice places to play, learn, and live. Keep asking questions and exploring, and you'll be ready for all the adventures life has to offer! 
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