The economy and money turn up in IELTS in many forms. In Writing Task 2, you may be asked whether the state should spend more on education or on roads, whether itâs fair to raise taxes for the rich, why the gap between rich and poor is growing and whether itâs a good thing that people buy more than they need. In Speaking Part 3, the examiner asks whether young people know how to manage money and how the cost of living has changed in your country.
The most noticeable mistake in this topic is a verb. When learners want to say that the economy got bigger, many write the economy grew up. But grow up is what children do when they become adults, not what figures do when they increase. An economy simply grows, and in an essay about economic growth one extra up turns a whole country into a teenager. The same topic hides other traps: prices are expensive, spend money for and an economical crisis.
Below are 28 collocations on the topic with Band 7-level examples, the mistakes learners most often make with them, and an example of how LetsWords gives feedback on a sentence you write. Jobs, careers and salaries have their own page, work vocabulary; youâll find the other exam topics in IELTS vocabulary by topic.
Economy and money: words and collocations
Growth and decline
| Expression | Meaning | Example |
|---|---|---|
| economic growth | an increase in what an economy produces | Economic growth does not automatically benefit everyone. |
| boost the economy | to make the economy stronger | Lower interest rates are often used to boost the economy. |
| a thriving economy | an economy that is doing very well | A thriving economy attracts skilled workers from abroad. |
| an economic downturn | a period when the economy gets weaker | Small businesses are the first to suffer in an economic downturn. |
| go into recession | to enter a period of economic decline | When a country goes into recession, consumers stop spending. |
| raise living standards | to improve how well people live | Trade has raised living standards in many developing countries. |
| in the long run | over a long period of time | Investment in education pays off in the long run. |
Prices and the cost of living
| Expression | Meaning | Example |
|---|---|---|
| the cost of living | how much money people need for basic needs | The cost of living in capital cities has risen faster than incomes. |
| rising prices | prices that keep going up | Rising prices hit pensioners hardest. |
| high inflation | prices rising quickly | High inflation quickly wipes out peopleâs savings. |
| canât afford to | not to have enough money to do something | Many young couples canât afford to buy a home. |
| disposable income | money left after tax to spend or save | Tax cuts leave households with more disposable income. |
| make ends meet | to have just enough money to live on | Even families with two incomes sometimes struggle to make ends meet. |
| purchasing power | how much money can buy | Inflation reduces the purchasing power of ordinary wages. |
Taxes and public spending
| Expression | Meaning | Example |
|---|---|---|
| raise / cut taxes | to increase / reduce taxes | Cutting taxes is popular, but it leaves less money for schools. |
| tax revenue | money the state collects in taxes | Tax revenue from tobacco could be spent on healthcare. |
| public spending | money the government spends | Public spending on infrastructure creates jobs in the short term. |
| taxpayersâ money | public money that comes from taxes | Taxpayersâ money should not be wasted on prestige projects. |
| allocate funds to | to set aside money for a purpose | The government should allocate more funds to public libraries. |
| a budget deficit | when a government spends more than it earns | Borrowing heavily can lead to a growing budget deficit. |
Inequality and personal finance
| Expression | Meaning | Example |
|---|---|---|
| the gap between rich and poor | the difference in wealth between social groups | The gap between rich and poor has widened in many countries. |
| income inequality | large differences in what people earn | Income inequality can weaken trust in public institutions. |
| live in poverty | to be very poor | Millions of children still live in poverty. |
| lift people out of poverty | to help people stop being poor | Economic growth has lifted millions of people out of poverty. |
| consumer spending | money people spend on goods and services | Consumer spending usually rises before the holidays. |
| save for the future | to put money aside for later | Few young people save for the future when rents are so high. |
| get into debt | to start owing money | Easy credit makes it all too easy to get into debt. |
| financial security | having enough money to feel safe | Owning a home gives many families a sense of financial security. |
Common mistakes
1. âThe economy grew upâ
The economy of my country grew up by 3% last year.
My countryâs economy grew by 3% last year.
Grow up is about people becoming adults, or about something appearing and developing over time, as in a town grew up around the port. It doesnât describe an increase in figures: an economy simply grows; prices and incomes rise or grow. The size of the change is introduced with by.
2. âPrices are expensiveâ
Prices for housing are very expensive in my city.
Housing is very expensive in my city. / House prices are very high in my city.
Expensive describes things and places. Prices are high or low. The difference between price and cost is explained in the price vs cost exercise.
3. Spend money for
The government should spend more money for public transport.
The government should spend more money on public transport.
For creeps in by analogy with pay for or money for, but spend has its own preposition: you spend money and time on something, so spend money on, spend time on. Lock it in with the spend money exercise.
4. Economic or economical
Many countries are facing an economical crisis.
Many countries are facing an economic crisis.
Economic means connected with the economy; economical means saving money or resources: an economical car. An economical crisis sounds like a crisis thatâs good value for money. The pair is explained in the economic vs economical exercise.
How LetsWords explains mistakes like these
While youâre reading a table, every word looks familiar. The mistakes appear when you write. Hereâs what one task in LetsWords looks like.
Youâre reviewing the cost of living. LetsWords shows you its meaning in your native language, you recall the English expression and write a sentence about your country:
Last year the cost of life grew up, and many families canât make ends meet.
The feedback, which LetsWords gives in your native language, points out two mistakes:
- the cost of life â the cost of living: the fixed expression only works with living;
- grew up â rose: grow up is about people becoming adults, while costs and prices rise or go up.
Last year the cost of living rose, and many families now canât make ends meet.
A few days later, the expression comes back in review, and you use it in a new situation, for example in a Speaking answer about young people and money. Thatâs how a collocation from a list becomes one you can pull from memory and write without a mistake.
Start practising with feedback on your mistakes
When you sign up, you choose IELTS as your goal and pick your level, and LetsWords sets up your practice. You can try the feedback before you pay.
Using these collocations in Writing Task 2
An exam-style task:
In many countries, the gap between the rich and the poor is growing. What problems does this cause, and what measures could governments take to reduce it?
A model paragraph on measures:
Governments have several tools to narrow the gap between rich and poor. The most direct is the tax system: higher earners could pay a larger share of their income, and the additional tax revenue could fund free childcare and adult education. Such public spending does more than redistribute money; it allows parents on low incomes to work longer hours and gain qualifications that raise their living standards in the long term. Equally important is controlling the cost of living. When rent and energy bills rise faster than wages, even working families struggle to make ends meet, so policies that keep housing affordable may reduce inequality as effectively as direct payments.
Why this paragraph works. The first sentence names the topic of the paragraph, and then come two measures, each with its mechanism shown: tax raises money, the money becomes services, and the services give people a chance to earn more. The second measure is linked to the first with Equally important, so the reader never loses the thread. The vocabulary is economic but not overloaded: six precise collocations in the right places are more convincing than a scattering of terms like fiscal consolidation.
Using them in Speaking
Part 3 question: Do you think young people today are good at managing money?
Not always, to be honest. Online shopping makes consumer spending almost effortless, and with âbuy now, pay laterâ services itâs very easy to get into debt without noticing. At the same time, I know quite a few people my age who track every expense, because they simply canât afford to waste money with the current cost of living. So Iâd say it depends more on circumstances than on age.
The answer shows both sides: first the reasons why itâs easy for young people to overspend, then a counterexample introduced with at the same time. The final sentence answers the question directly.
Practise for free
- economic vs economical: about the economy vs saving money;
- price vs cost: what a seller asks vs what you spend;
- spend money: using money to buy things;
- save money: spending less and putting money aside;
- make ends meet: getting by on little money;
- pay off: bringing good results, or repaying a debt;
- rise vs raise: going up by itself vs lifting something;
- go up: how prices and taxes increase.
From the list to real use
A list helps you recognise disposable income when you read it, but in an essay you have to recall it yourself and get the preposition right. Move from the list to real use with LetsWords: work through an IELTS set for your level and add collocations from this page to your collection, such as economic growth or income inequality. You recall each expression from a prompt and write a sentence with it, LetsWords points out the mistake and explains it in your native language (Russian, Korean or Vietnamese), and spaced repetition brings the expression back until it comes naturally. Then test your vocabulary in a full text: the IELTS Writing section has Task 2 prompts in the Government and spending topic, on how public money and taxes should be spent, and a full answer gets detailed feedback on all four criteria, tied to what you actually wrote. When you sign up, you answer a few questions about your goal and level, and LetsWords sets up your practice; you can try the feedback before you pay. Youâll find the other exam topics in IELTS vocabulary by topic.