Family Finance Friday- Create Your Own Money
This week we are going to have a little fun and create our own currency.
Start by teaching your kids the basic history of money:
– Before money, people exchanged goods and services for other goods and services. This could be difficult if the person who had what you wanted did not want what you were offering.
-People eventually created the shekel to use as a place holder between what you were selling and what you were buying. This made trading a lot easier.
– In 1871 Germany created the gold standard, meaning that the value of the local currency was directly tied to the value of an ounce of gold.
– In 1971 the USA stopped using the gold standard and now currencies are not tied to any finite resource.
– The earliest form of credit was a stick that had notches to show how much debt was owed. When the stick was split in two, there was no way for either person to fake what the amount was. It was actually much more secure than today’s credit cards.
– Less than 8% of the world’s currency is in physical cash. That means that if we converted all of the physical coins and bills to US dollars, each person in the world would have less than $5,000.
– If your children are a little older you can look up some of the world’s currencies. The most well known are the US dollar, the Canadian dollar (including the fun-to-say Loonie and Toonie), and the Euro. But there are hundreds of others. See who can find the most unusual, the one with the least value, and the one with the greatest value (when compared to others).
– Some countries have their own cryptocurrencies. Check to see if your country is on that list!
Next, ask you children to create their own money. What would it look like? What denominations would it be offered in?