People have been using types of money for thousands of years as a form of trading. For example, a butcher could trade meat to a tailor in exchange for a new shirt. But if the butcher needs a new shirt, while the tailor doesn’t need meat, then the trade won’t work! Instead, the butcher can just give the tailor some money, which the tailor can then use to buy whatever he does need!
Early forms of money might surprise you. – Before paper money, people used things like shells, stones, fur, gold, and silver as their currency! “Money” can be any item with a value that is agreed upon.
Today, most money is paper money that has been specially printed by a country’s government. It gets its worth simply by being something that everybody agrees to use in exchange for goods and services! Since everybody uses money as their system for trading, everybody agrees to let it have value and be worth something!
Further informationPeople often think or say that “money comes from the bank” because banks are places where money is often stored and kept. But even though banks often hold on to money for people, they aren’t the ones who create the money! A person cannot get money from a bank unless they have previously put money into the bank.
ExplorationGrown on trees!
Have you ever seen or used money from a different country than the one you live in?
See if you can examine some coins or bills from another place. There might be some in your house if anyone has taken a recent trip, or else ask some of your friends if they have any.
Is the money the same color, size, or shape as the money you're used to? What kinds of people or pictures are on the money? And what about the coins -- are they heavier or lighter than the coins you usually use?
What other kinds of similarities and differences do you notice??
Sources & links
Nebel, Bernard J. Ph.D. “Chapter 4 ”“ Economics: Exchanging Goods and Services.” Nebel’s Elementary Education. Maryland: Nebel’s Press for Learning, 2001. 71. “The History of Money.” The Federal Reserve Bank of Minneapolis. 20 Oct. 2009 "money." Encyclopædia Britannica. 2009. Encyclopædia Britannica Online. 20 Oct. 2009 “History of Money.” KidsPage. Department of Financial Institutions ”“ State of Wisconsin. 20 Oct. 2009 Banking on Our Future