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The Origins of Money

Written by Shekinah Ade-Gold on behalf of Budget Leaf



Bartering


Back in the day, about 6000 years or more ago, bartering was the order of the day. This was when goods and services would be exchanged, as a way of each partner in the agreement getting what they wanted from the other. An example of this would be me agreeing to trim your yard in exchange for half the fruits in your garden. In this way, bartering covered the needs of everyone involved, until it couldn’t. If your yard was the size of a football field and you only had three fruit trees that hardly bore fruit or weren’t in season, there’d be no deal to make.



Introducing Currency


Chapurukha Kusimba (TheConversation.com) and Andrew Beattie (Investopedia.com) both state that the ancient region of Lydia (600-650 B.C.) was the first to start minting coins that could be officially used. Research also cites that China came up with coin-like objects around this time. The ability to use metal and rare gems in exchange for goods and services served as the transitionary period between bartering and money. Kusimba states that the Mesopotamian shekel existed 5000 years ago, and also notes that the coins circulated by the Romans, Muslims, Indians and Chinese held to shape pre-modern commerce and business (1250 B.C. – A.D. 1450). Currency also included animal skins, salt and weapons.



Paper Money


China began to use paper money around 700 B.C., and according to Beattie, Marco Polo the explorer visited China in about A.D. 1271. (Fun Fact: In the way that American money has the inscription “In God We Trust”, the Chinese used a version of their own: “Those who are counterfeiting will be decapitated”). Coins persisted for some time as various colonizers found precious metals to use for minting in their territories; however, the European governments led the way into using paper money issued in their colonies. In 1865, soldiers were even given playing cards denominated and signed by an official in the place of coins, which were in short supply.



The Takeaway


From bartering and currency to coins and paper money, we see that history has documented the fact that we give value to the different products and services we desire. If you want something/ or want a service done, you will most likely have to pay or give an equal product or service in return. Learn how to use and budget the value of anything you have - not just money - and in this way, you may become wealthy.


Sources

1. Chapurukha Kusimba, “When – and why – did people start using money?”,

TheConversation.com, June 19, 2017.

2. Andrew Beattie, “The History of Money – From Barter to Banknotes”,

Investopedia.com, updated May 24, 2021

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