Vocabulary
The words you need whenever the topic is income, spending or the economy. With a practice exercise.
IELTS vocabulary for money and finance is one of the weakest areas for most candidates, which makes it one of the most useful to prepare. Money appears in Task 2 essays on wealth and taxation, in Section 3 and 4 listening on economics, and in speaking questions about saving and spending.
The words below are grouped the way examiners would expect you to use them. Learning ten at a time and putting each one into a sentence about your own spending works far better than reading the whole list once.
The words
Six groups. Learn one group at a time rather than the whole page.
Income — all the money a person receives.
Disposable income — what is left after tax and essential bills.
A salary — a fixed amount paid monthly.
Wages — pay calculated by the hour or the week.
Standard of living — the level of comfort a person’s income allows.
Expenditure — the money spent, the opposite of income.
A household budget — a plan for what a family will spend.
To save up for something — to keep money aside for a purpose.
Thrifty — careful with money, and a compliment.
Extravagant — spending far more than necessary.
Money is uncountable: write much money and never moneys or a money.
Economic means relating to the economy; economical means it does not waste money or fuel. A small car is economical, not economic.
Price is what a thing sells for, cost is what you must pay overall, a fee buys a service and a fare buys a journey.
To borrow — to take money that you will repay.
To lend — to give money that will be repaid to you.
A loan — money borrowed for a fixed period.
A mortgage — a long-term loan used to buy property.
Interest — the extra amount charged for borrowing.
The wealth gap — the distance between the richest and the poorest.
Affluent — wealthy, used of people and of areas.
The poverty line — the income below which basic needs cannot be met.
The cost of living — how much everyday essentials cost.
Redistribution — moving wealth from richer groups to poorer ones, usually through tax.
Inflation — a general rise in prices over time.
A recession — a period when the economy shrinks.
Taxation — the system by which governments raise money.
A subsidy — money paid by government to keep a price low.
Economic growth — an increase in what a country produces.
Method
Six ways these words earn marks rather than just filling space.
Disposable income is far more precise than money left over, and it is the natural term in an essay about household spending.
Economy, economic, economical, economics, economist. This family causes more confusion than any other on the topic, so learning it properly pays off twice.
You earn a salary, take out a loan, run up debts, raise taxes and cut spending. Wrong pairings are noticed even when both words are real.
You borrow from someone and lend to someone. Reversing them is one of the errors examiners see most often, and it is entirely avoidable.
Should governments tax the rich more heavily? Is money the main measure of success? Should children be taught to manage money? These recur, and the vocabulary above answers all three.
A word learned inside a sentence about your own spending or saving is remembered far better than a word learned from a list.
Practice
Choose the word that fits each sentence.
Read the whole sentence before you choose. Several options will be real words, and often more than one will nearly fit.
The test is precision: which word means exactly what the sentence needs?
1The money left after tax and essential bills have been paid is called ______.
Disposable income. Expenditure is the money going out rather than what remains. Standard of living describes the comfort that income buys, not the amount itself.
2The bank ______ me the money, so I ______ it from the bank.
Lent / borrowed. The person giving the money lends; the person receiving it borrows. Reversing these is one of the most common errors in IELTS writing.
3Choose the correct sentence.
Much money. Money is uncountable, so it takes much and never a plural or an article. If you need a countable noun, use notes, coins or funds.
4A small car that uses very little fuel is ______.
Economical. Economical means it does not waste money or fuel. Economic means relating to the economy, as in economic growth. Thrifty describes a person, not a car.
5A long-term loan used to buy a house is a ______.
A mortgage. Interest is the extra amount charged on top of what you borrowed, so it is part of the cost of a mortgage rather than the loan itself.
6A general rise in prices across an economy over time is called ______.
Inflation. A recession is a period when the economy shrinks. The two can happen at the same time, but they describe different things.
That is a collocation problem rather than a vocabulary one, and it is very hard to spot in your own writing because every word looks correct on its own.
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Recognising a word in a multiple choice is not the same as producing it accurately under time in an essay.
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Common enough to prepare. It appears in Task 2 essays on wealth, taxation and consumer culture, and in speaking questions about saving, shopping and what you would do with a large sum.
Economic means relating to the economy, as in economic growth. Economical means not wasteful, as in an economical car. Mixing them is a precision error and it is easily marked down.
You borrow from someone and lend to someone. The lender gives, the borrower receives and later repays.
No. Use much money and a great deal of money. Notes, coins and funds are countable if you need a plural.
No. You need clear reasoning and accurate language. A well-argued essay in plain, correct English scores higher than a technical one full of terms used approximately.
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Technique takes most candidates to about Band 6.5. Past that, the limit is usually the range of language you can use accurately, and knowing where you stand is the first step.
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