Money is something gelduitleg.nl agree to exchange in order to buy goods or services. It replaces the need to trade items like furs or spices, which are difficult to transport and can easily lose value over time. Money is also much more convenient to carry around and has a standardized value that’s easily understood by everyone.

While there are many assets that can serve the functions of money, only those that have these three characteristics can be called money: medium of exchange, store of value, and unit of account. For example, a collection of Kent cigarettes served as money in Romania under Communist Party rule in the 1980s. Likewise, bubble gum wrappers can be used as money today.

Mastering Your Finances: A Beginner’s Guide to Money

The best way to understand these concepts is by showing kids examples of how they use their own money. Show them how to use their cards and tell them how much work it took them to earn the funds that they spent. Encourage them to separate their spending into needs and wants, and teach them how to prioritise their spending with the future in mind.

Once kids have a grasp on these basics, it’s easy to move onto more complicated topics, such as how interest is calculated and how banks make money (hint: they don’t pay out your interest just because they’re nice!). These concepts are essential for building financial savvy and understanding how wealth is created and maintained.