Money Explanation For Kids

Money is a Gelduitleg  concept, but it’s an important one to understand. Understanding where money comes from and how it works can help your kids on the path to financial well-being. And it’s a good idea to start your children on this journey at an early age, because it takes them longer to develop the habits needed for long-term financial success.

Explain that money is a medium of exchange that symbolizes perceived value, and is used to facilitate transactions in economies. It can take the form of coins, banknotes or digital money via debit card (money accounted for and transferred by online methods). Australian banknotes and coins are produced by the Reserve Bank of Australia, with their value determined by people’s demand for them. When the number of banknotes and coins in circulation grows, the money supply increases.

The Functions of Money: What Makes It Valuable

Before the invention of money, people would barter for goods and services. But this required both parties to have something that they wanted and someone with something they needed, which was often impractical. Money solved this problem by acting as an intermediary good.

Show your kids how money works by letting them watch you make purchases and pay bills. Encourage them to ask questions, and talk about how you make decisions, such as choosing shop brand or more-expensive brand cereal. You can also get them involved in budgeting and saving by helping them write a shopping list, comparing prices at the supermarket, loading your car with groceries and checking the receipt when you’re finished.