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Welcome Everyone to my Padlet!

The following will take you on an adventure to find out the functions of money. Some examples with be simple, whereas other examples go more in depth. Also on top of figuring out the functions of money, also there are parts of the pallet that teaches you on what to do with money.

Thank you again for visiting and I hope you enjoy.

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I chose this picture because it reminds me of our earlier project this year, where we had to think about the words associated with the main concept. I hope this pictures help the viewer think independently the functions of money but also everything associated with money outside the academic definitions.

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I chose this picture because it breaks down the functions of money in its 3 sections very well visually. It helps the viewer differentiate between primary, Secondary, Contingent categories easily.

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This video breaks down the primary functions of money and how it is intertwined in today's world. The primary example that is used is a lawyer wanting to buy chairs from a a craftsmen and how a double coincidence of wants are needed in a barter system but money makes it possible if that is not the case.

I chose this video for a couple reasons. The first is that is it short and too the point of what the functions of money is. But also it takes the time to related to the viewer why as a society we went from a barter system to a money system.

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Functions of money | Financial sector | AP Macroeconomics | Khan Academy

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Video 2: Functions of money ( How to use it ) 

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Video 2: Functions of money ( How to use it ) 

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This video is about investing money and the different personal functions it can have. Its highlights more about investments within BMO and why you invent in them and the differences between them.

I chose this video because it breaks down the function of money but from a different viewpoint but also ties in advice I got from the financial advisor that you brought in, but with BMO. Yes, as a society the view point is clear on what money is used for. But as a personal view point what money can be used can be seen quite differently. This helps the viewer understand what money can do for you and the functions it can do.

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SHORT-TERM Investing // Money Market Funds (BMO ETFs)

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Video 3: Functions of Money ( Said differently ) 

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Video 3: Functions of Money ( Said differently ) 

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his video provides an overview of the key definitions and roles of money in the economy. It explains that money, specifically M1, is the only asset universally accepted as a means of payment for goods and services. The discussion covers its three primary functions: serving as a medium of exchange, a store of value, and a unit of account. Designed for first-year college students or AP/IB Economics learners, this video focuses on fundamental economic principles.

I chose this video because it explains the functions of money differently than the previous video. I find this important because it may click better for someone else and help them understand this topic further.

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This video goes in depth on the functions of money. It starts by exploring the concept of what it money then further breaks down its functions and its importance. Similar to other videos but is much larger in length and more in depth.

I chose this video because it fully breaks down this topic in depth. It is a longer video, but does a great job at helping the viewer understand this topic.

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Money and Banking: Lecture 2 - Functions of Money 1

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This video is about how money is a system of value that facilitates the exchange of goods and services in an economy. It eliminates the inefficiencies of bartering by serving as a medium of exchange, a store of value, and a unit of account.

I chose this website for a couple reasons. It breaks down the functions of money but also explores different avenues like what is money, the importance of durability, and portability of money. Also this website ties in how the market may affect the function and value of money which was insightful.

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What Is Money?

Money is a system of value that facilitates the exchange of goods in an economy. Using money allows buyers and sellers to pay less in transaction costs, compared to barter trading.

The first types of money were commodities. Their physical properties made them desirable as a medium of exchange. In contemporary markets, money can include government-issued legal tender or fiat money, money substitutes, fiduciary media, or electronic cryptocurrencies.

How Money Works

Money is a liquid asset used to facilitate transactions of value. It is used as a medium of exchange between individuals and entities. It's also a store of value and a unit of account that can measure the value of other goods.

Prior to the invention of money, most economies relied on bartering, where individuals would trade the goods they had directly for those that they needed. This raised the problem of the double coincidence of wants: a transaction could only take place if both participants had something that the other needed. Money eliminates this problem by acting as an intermediary good.

The first known forms of money were agricultural commodities, such as grain or cattle. These goods were in high demand and traders knew that they would be able to use or trade these goods again in the future. Cocoa beans, cowrie shells, and agricultural tools have also served as early forms of money.

As economies became more complex, money was standardized into currencies. This reduced transaction costs by making it easier to measure and compare value. Also, the representations of money became increasingly abstract, from precious metals and stamped coins to paper notes, and, in the modern era, electronic records.

What Are the Properties of Money?

In order to be most useful, money should be fungible, durable, portable, recognizable, and stable. These properties reduce the transaction cost of using money by making it easy to exchange.

Money Should Be Fungible

The word fungible refers to a quality that allows one thing to be exchanged, substituted, or returned for another thing, under the assumption of equivalent value. Thus, units of money should be interchangeable with one another.

For example, metal coins should have a standard weight and purity. Commodity money should be relatively uniform in quality. Trying to use a non-fungible good as money results in transaction costs that involve individually evaluating each unit of the good before an exchange can take place.

Money Should Be Durable

Money should be durable enough to retain its usefulness for many, future exchanges. A perishable good or a good that degrades quickly due to various exchanges will be less useful for future transactions. Trying to use a non-durable good as money conflicts with money's essential future-oriented use and value.

Money Should Be Portable

Money should be easy to carry and divide so that a worthwhile quantity can be carried on one's person or transported. For example, trying to use a good that's difficult or inconvenient to carry as money could require physical transportation that results in transaction costs.

Money Should Be Recognizable

The authenticity and quantity of the good should be readily apparent to users so that they can easily agree to the terms of an exchange. Using a non-recognizable good as money can result in transaction costs relating to authenticating the goods and agreeing on the quantity needed for an exchange.

Money's Supply Should Be Stable

The supply of the item used as money should be relatively constant over time to prevent fluctuations in value. Using a non-stable good as money produces transaction costs due to the risk that its value might rise or fall, because of scarcity or over-abundance, before the next transaction.

How Is Money Used?

Money primarily functions as the good people use for exchanges of items of value. However, it also has secondary functions that derive from its use as a medium of exchange.

Money As a Unit of Account

Due to money's use as a medium of exchange for buying and selling and as a value indicator for all kinds of goods and services, money can be used as a unit of account.

That means money can keep track of changes in the value of items over time and multiple transactions. People can use it to compare the values of various combinations or quantities of different goods and services.

Money as a unit of account makes it possible to account for profits and losses, balance a budget, and value the total assets of a company.

Money As a Store of Value

Money's usefulness as a medium of exchange in transactions is inherently future-oriented. As such, it provides a means to store a monetary value for use in the future without having that value deteriorate.

So, when people exchange items for money, that money retains a particular value that can be used in other transactions. This ability to function as a store of value facilitates saving for the future and engaging in transactions over long distances.

Money As a Standard of Deferred Payment

To the extent that money is accepted as a medium of exchange and serves as a useful store of value, it can be used to transfer value over different time periods in the form of credits and debts.

One person can borrow a quantity of money from someone else for an agreed-upon period of time, and repay a different agreed-upon quantity of money at a future date.

Different Types of Money

Market-Determined Money

Money can originate out of the spontaneous order of markets. As traders barter for various goods, some goods will prove more convenient than others because they have the best combination of the five properties of money listed above.

Over time, these goods may become desirable as objects of exchange, rather than for practical use. Eventually, people may come to desire a good solely for future trading.

Historically, precious metals such as gold and silver were often used as market-determined monies. They were highly prized across many different cultures and societies. Today, people in cashless economies frequently turn to cigarettes, instant noodles, or other nonperishable goods as a market-determined money substitute.

Government-Issued Currency

When a certain type of money is widely accepted throughout an economy, government bodies may begin regulating it as a currency. They may issue standardized coins or notes to further reduce transaction costs.

A government may also recognize some money as a legal tender, meaning that courts and government bodies must accept that form of money as a final means of payment.

Issuing money allows the government to benefit from seigniorage, the difference between the face value of a currency and the cost to produce it.

For example, if the cost of printing a $100 bill is only $10, the government will earn a $90 profit for each bill it prints. However, governments that rely too heavily on seigniorage may inadvertently debase their currency.

Fiat Currency

Many countries issue fiat currency, which is currency that does not represent any type of commodity. Instead, fiat money is backed by the economic strength of the issuing government. It derives its value from supply and demand and the stability of the government.

Fiat money allows the issuing government to conduct economic policy by increasing or reducing the money supply. In the U.S., the Federal Reserve and the Treasury Department monitor several types of money supplies for the purpose of regulating and mitigating monetary issues.

Since fiat money does not represent a real commodity, it falls to the issuing government to ensure that it meets the five properties of money outlined above.

The International Monetary Fund (IMF) and World Bank serve as global watchdogs for the exchange of international currencies. Governments may enact capital controls or establish pegs in order to stabilize their currency on the international market.

Money Substitutes and Fiduciary Media

To reduce the burden of carrying large quantities of currency, merchants and traders sometimes exchange money substitutes such as written statements of debt that can be redeemed later. These statements can themselves adopt some of the properties of money, particularly if traders use them in lieu of actual currency.

For example, ancient banks issued bills of exchange to their depositors, stating the amount that had been deposited and the terms for redemption. Rather than withdraw money from the bank to make payments, depositors would simply trade their bills, allowing the recipient to redeem or trade them at will.

This use of money substitutes can increase the portability and durability of money, as well as reduce the cost of storage. However, there are risks involved with money substitutes. Banks may print more bills than they have money to redeem, a practice known as fractional reserve banking. If too many people try to make withdrawals at the same time, the bank may suffer from a bank run.

Fiduciary media are types of money substitutes introduced into circulation that aren't fully backed by the base money held to back money substitutes. For example, paper checks, token coins, and electronic credit represent contemporary examples of fiduciary media.

Cryptocurrencies As Money

In recent years, digital currencies that do not exist in physical form, such as Bitcoin, have been introduced. Unlike electronic bank records or payment systems, these virtual currencies are not issued by a government or other central body. Cryptocurrencies have some of the properties of money and are sometimes used in online transactions.

Although cryptocurrencies are rarely used in everyday transactions, they have achieved some utility as a speculative investment or a store of value. Some jurisdictions have recognized cryptocurrencies as a payment medium, including the government of El Salvador.

What Are the 4 Types of Money?

What Is the Difference Between Hard and Soft Money?

Is Cryptocurrency Money?

The Bottom Line

Money is some item of value that allows people and institutions to engage in transactions that result in an exchange of goods or services.

Money has to be exchangeable, convenient to carry, recognized as legitimate by all, physically long-lasting, and have a value that's stable.

Money comes in various forms, including precious metals, currencies, and money substitutes. At this time, though cryptocurrencies have some of the properties of money, they function without a central authority and aren't backed by governments. While cryptocurrencies (such as Bitcoin) are considered property for tax purposes by the IRS, they aren't considered legal tender by the U.S. government.

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Understanding Money: Its Properties, Types, and Uses

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Money is a medium of exchange that can be used to facilitate transactions for goods and services.

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Website 2: Function of Money (How to use it) 

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Website 2: Function of Money (How to use it) 

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This video is about how money is a powerful tool that can help individuals achieve financial stability and personal goals. Some important waus to use money effectively include creating a budget to track spending, investing wisely to grow wealth, paying off debt to reduce debt, and building an emergency fund for unexpected expenses.

I chose this website because it changed the view point on the function of money from being a societal view to a personal. This website may also give the viewer other insights on how to use money as a tool that they may not otherwise be aware of.

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Money is a powerful tool. It can be used to buy things, make investments, and much more. In this blog post, we will discuss 10 ways money can be used to help you achieve your goals. Whether you are trying to save for retirement or want better ideas on managing your finances, read on for some helpful tips.

Why is Money a Tool?

Money can be both a blessing and a curse; it is not the root of all evil, but it must be managed with wisdom. Money is, by definition, nothing more than just a tool. It's only worth what people assign to it, and its value can increase or decrease due to things like inflation, exchange rates, or government decisions. Spend money wisely and it can be used to achieve great things.

As such, money should never be seen as the goal itself - instead, we should understand it as just another means to achieving our goals. People use the money for things like buying food and other necessities, running businesses, and investing for the future. Ultimately, money does provide us with certain freedoms and options. Still, its purpose should never go beyond simply being viewed as a tool. It should always be used responsibly and in line with our true aspirations.

How to Use Money as a Tool

Here are some of the ways you can use money as a tool:

1. Create A Budget

A budget is essential for managing your finances. It allows you to track where your money is going and set financial goals. With a budget, it will be easier to determine how much you need to save each month in order to reach your goals. Enough money should be set aside for important things like retirement, investments, and other long-term goals.

2. Invest Wisely

Investing is a great way to make your money grow over time. Before investing, research different investment options and learn about the risks associated with each one so that you can make informed decisions. If you're unsure where to start, consider seeking professional advice from a financial coach.

3. Pay Off Debt

High-interest debt, such as credit cards, can quickly waste your savings if left unchecked. Make a plan to pay off your debt as soon as possible. If you can't afford to pay it all off at once, make small payments each month until the balance is paid off.

4. Build An Emergency Fund

Life can be unpredictable, and an emergency fund can help protect you financially during difficult times. Set aside more money each month to have a cushion in case of job loss or unexpected expenses.

5. Save For Retirement

Retirement may seem far away, but it's never too early to start saving. Look into retirement plans such as 401(k)s and IRAs, which provide tax benefits and potential returns on your investments over time.

6. Track Your Spending

Spending time tracking your spending helps you identify areas where you can cut back and save more money. Make a habit of checking in on your accounts regularly to ensure that you're aware of where your money is going. Spending money without planning can lead to debt and other financial issues.

7. Utilize Cash-Back Rewards

Many credit cards offer cash-back rewards for purchases made with their card. Using these rewards wisely can be a great way to save money and get back some of what you spent. Money makes life easier, and it should be used as a tool to help you reach your goals.

8. Negotiate Bills

Don't be afraid to negotiate the terms of certain bills, such as cable or internet service, if they are too expensive. Contact the provider and ask if they offer any discounts or special offers that could lower your monthly payments.

9. Utilize Tax Deductions

Depending on your situation, you may be eligible for certain tax deductions that can save you money. Research the different types of deductions and consider consulting a professional if needed.

10. Give Back

Money doesn't need just to be used for personal benefit; it can also be used to help others in need. Consider donating to organizations that work in your community or beyond. Not only will this make a difference in someone else's life, but it can also bring you joy and satisfaction knowing that you have made an impact. Current financial circumstances should not prevent you from giving back.

Using money as a tool is important in managing your personal finance and achieving financial goals. With the right planning and budgeting, you can use money to create a better life for yourself and those around you. Money creates a positive difference when used responsibly and in line with your true aspirations.

How Can Money Be a Helpful Tool?

Money can be a helpful tool when used wisely. It can help fund projects, buy essentials, and secure your future. Saving money and investing it wisely will allow you to build wealth over time and provide financial stability in the long-term. Money should also be used to give back when possible - there are always those who need assistance more than we do, so donating to charities or helping out those in need is an important part of using money as a tool for good.

Ultimately, money is only valuable if it's put to good use. Understanding how to use money responsibly and manage it correctly can help you reach your goals faster and have peace of mind knowing that your finances are under control. With a little bit of planning and dedication, you can ensure that money is used as a tool to your benefit.

Final Thoughts

Money can be a powerful tool, but it should never become an obsession. Use it to your advantage, responsibly and with caution. With the right knowledge and budgeting practices, you can use money as a tool to achieve your goals and create financial stability for tomorrow. By understanding how to handle your finances today, you can make sure that you're in control of your own future. Not sure how to get started? Bolder has a team of financial coaches waiting to help you with your personalized money goals so you can start using your tool as effectively as possible.

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10 Smart Ways To Leverage Money for Your Goals | Bolder Money #NoFilter Blog

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Turn finances into a powerful ally. Explore ten methods to make money work for you-whether you're saving for retirement or growing your investments.

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Website 3: Functions of Money ( Said Differently )

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Website 3: Functions of Money ( Said Differently )

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I chose this website because it highlights how money plays a crucial role in the economy by serving four main functions: medium of exchange, standard of deferred payment, store of wealth, and measure of value. Also, this websites touches on how money eliminates the inefficiencies of barter systems, allowing for seamless transactions.

I chose this video because it's another great view point on why we have money and the importance of its functions when relating to the previous barter system that was in place.

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Money performs four main functions in today's society. It mainly serves as a medium of exchange, a standard of deferred payment, a store of wealth, and a

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Website 4: Functions of Money (In Depth)

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Website 4: Functions of Money (In Depth)

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This website/document explores the meaning, forms, and functions of money. It helps the reader define money as anything generally accepted in exchange for goods and services or in repayment of debts. Also this document mentions how several economists provide functional definitions, emphasizing its role as a unit of account, a means of payment, and a store of value.

I chose this website because it goes more in depth on functions of money and what money is. This is similar to the video but for those who prefer to read over listen.

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What did you learn about the topic that surprised you the most.

I learned a lot of about the functions of money how the functions change depending on the viewpoint, either it being societal vs personal. Noting, it was surprising to know that a lot of websites place a stores value on money and how much is has vs how that store is contributing to society.

Provide a real life example on how this topic is relevant and interesting to you.

A great real life example that is relevant to this topic is the functions of money from a personal viewpoint. growing up, all I knew about money is that is was good to have it sucked when you didn't have it. Furthering this thought understanding how to use money, and its functions has helped me have a better grasp on finical stability.

If you can pass on your knowledge to a friend or family, what would be the most important thing to pass on.

My advice that I would give would be: Don't put all your eggs in one basket. Referring to do not collect (cash) in your bedroom but diversify. Understand the functions of money helps you realize that (cash) is just a medium to display value and that the moment society decides to change the medium is the moment you are going to wish that diversifying is very important.