Money makes the world go round
Welcome to Pounds & Pence, where you'll find
out everything you ever wanted to know about money and prices.
Why do we need money?
Money is such a normal part of our lives that
we don't often stop to think about it. Try imagining a world
without money and you'll see there's more to it than meets
the eye.
Basically, we need money because it is a way of
paying for things. We use it to buy the things we want or
need. Our parents get paid for working in shops, factories
or offices and they use that money to buy goods (like food
or clothes) and pay for services (such as haircuts or repairs).
Money is also a useful way of storing what we
have. We can choose to spend it, or we can keep it to buy
things later. It doesn’t grow old, get out of date or
rot.
Money helps us to compare prices. For example,
we know that a bus ticket or two chocolate bars are worth
about a pound, and a book or taking a car through a carwash
are worth about five pounds. Without an agreed way of measuring
what things are worth, we would all be in a bit of a mess.
How does money work?
Money is a type of currency. We give coins and
notes in exchange for goods and services. Anything could be
used as currency as long as people agreed to it.
Imagine your friend borrowed £1 and wrote an IOU on
a scrap of paper promising to pay it back. It would be of value
to you (as long as you could trust your friend), but you'd have
a hard time convincing a shopkeeper to take it!
Key Resources
Next information card |
 |
