MONEY TALKS: THE HISTORY OF MONEY

MONEY TALKS: THE HISTORY OF MONEY

You go to the corner store and buy a carton of milk and some eggs. You pay and you leave. That's normal, right?Your parents buy you some new clothes for you: a pair of blue jeans and a nice T-shirt. When they pay, they don't even need money. They pull a pice of plastic from their wallet, give it yo the cashier and that's it. That's what credit cards are for, right?It's hard for us to believe that there once was a time when credit cards didn't exist. There was even a time when money didn't exist!

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Barter

There was a time when you had to go to the farmer for your milk and eggs. The farmer took something he or she needed, maybe some corn thet you grew in your fields. this exchange of products is called barter, The barter system is based on reciprocal gifts: "If I give you some corn, will you give me some eggs?" Barter worked before money existed.Before that system, people didn't have anything like money. They helped each other and gave each other things. If they would cook the meat and share it with everybody in the community. If a man needed to build a house or hut, other men helped him. Barter also included physical labor. Men and women worked in exchange for food.

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Commodities

Little by little, primitive money started to appear. People used something of value to pay for a product or service. In Mesoamerica, chocolate was a valued drink. Aztecs used cocoa beans as money. They were small, easy to caarry and easy to count. For example, 20 cocoa beans paid for a tameme, a porter to carry your things home. Large amounts were paid in quachtli, a long white cape. A simple quachtli was worth 65 cocoa beans, but a well-made and decorated quatchli could cost up to 300 cocoa beans. 

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Primitive money

Some comodities or primitive money are: amber, beads, cocoa beans, cowries (large shell), drums, eggs, feathers, gongs, hoes (a tool to work the land), ivory, jade, kettles (to cook water), leather, mats (to cover the floor), nails, oxen (strong bulls), pigs, quartz (a crystal), rice, salt, thimbles (a tool for making clothes), vodka and yarns (wool for making clothes).Comodities had to be easy to store, easy to carry around and every body had to agree about their value. They also needed to be durable. Old and wrinkled cocoa beans had less value than new ones!

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An importan barter or commodity was cattle. Cows, sheep and goats were important in early civilizations. They provided meat for food, wool and skins for clothes and bones for tools.Equallyimportant was the ceremonial or religious value of cattle. They were used for offerings. Cttle were a primitive form of money because they could counted. The more cows a famiy had, the richer they were.American Indians from the Northwest had potlatch parties or festivals. The purpose of a potlatch was to distribute the wealth. The potlatch party was hosted by a family or a clan. It was considered a great honor to host a potlatch party. It was a kind of competition: Who can give the most things to others?A hundred years ago, the Kirghiz people of the Russian steppe fields used horses as their commodity money and they gave the skins of lambs (young sheep) as small change.The only large civilization that was completely without commodity money was the Inca culture in South America. The Incas traded products and labor: they used the barter system also to exchange labor. For example, they said, "If you help me build my house, I'll help you harvest corn." Imagine a community where no money changed hands!Money WordsThe word dollar comes from the thaler coins from 16th century Europe. The $ sign originates from the Spanish word Peso, with the vertical line representing the P.The words capital and cattle both have the same sign.

BANKS

Banks have always existed, right? No, wrong! Bamks were invented in Mesopotamia in the Middle East. Rioyal temples and palaces were considered secure places to keep the commodities. Tempe officials gave out officials receipts, just like a bank does today.Metal MoneyAbout four thousand years ago, people started using metal as money, but coins did not exist yet. The weight of the pices of metal determined their value.One of the first forms of coins was from China. The Chinese used cowry shells as money and their first coins were cowry shells made of metal (brozen or copper).The first real coins were probably made in Greece about 630 B. C. The coins had a standard form, weight and purity of metal. Drachmas were made of silver and other coins were made of cheaper metal.

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Paper Money

The invention of paper money happened in China, too. Around the year 1,000, there wasn't enough copper to make coins. Emperor Hien Tsung ordered the production of paper money. Later, the Chinese went back to the familiar metal coins. Untouchable MoneyFrom 1870 to 1970, the value of money was linked to the value of the gold a country possessed. Nowadays, money exists mostly in electronic form. Your parents' salaries are probably deposited in bank account and your parents can pay their expenses electronically or in a bank office. They use a credit card in the supermarket. People can have money, but it's possible they never see or touch most of it!The first modern credit card was from the Bank of America in 1958.Now there are so many credit cards that some people collect them!Did you know that all credit cards are axactly the same size? They are exactly 85.60 x 53.98 mm!

The Dangers of Credit Cards

Credit cards are wonderful if you have money to pay for what you buy. If you don't pay your debt completely, you can have serious problems. In a few years, you could have your own credit card and you should know how to use it. Let's look at an example. Imagine you go to a mall with your friends or with your parents and you buy cloths, a new camera and some DVDs. The total bill is two hundred dollars. You pay with a credit card. The next month, your bank statement arrives. You need to pay your credit card. Imagine you have only one hundred dollars to pay your debt. Now you will have to pay interest. This means you now owe more than one hundred dollars. If you follow this pattern every month, you quickly owe more interest than the original expenses! For example, a one hundred dollar debt can become a five hundred dollar debt. You will never be able to pay back that much money. Many adults ignore the dangers of spending with credit cards and they have terrible debts. Ask in your family if people have (or have had) problems with credit cards. You may be surprised about their experiences.

To spend safely, you should:

- Pay the total debt before you use your card again.- if you owe money to the bank, you should pay the debt - don't buy other things.- Set a limit - think about the amount of money you get in a month (from your weekly allowance or from a part - time job). Deduce the money you spend in cash. The amount left over is what you can spend on your credit card. You can spend less, but not more.AN EXAMPLE:monthly allowance      $ 120washing cars             $  20cell phone payments   - 25cash spending            - 60MONEY FOR THE CREDIT CARD   $ 55

SAVINGS

To be on the safe side, you should not spend more than forty or forty-five dollars. What if you have an emergency and need some extra money?- If you use youre credit card, write down how much you spend. It is very easy to forgetr that you already reached your limit for the month.

Sometimes you recive more mney than you need. For example, for your birthday. You can save this money and use it for emergencies.There is an expression that says, "Money doesn't grow on trees." It means that it's not easy to get money, so be careful with it!