Money matters

• Money is everything that serves as a universally accepted medium of exchange or means of payment.
• Money gives the value to nearly everything.

1. a)   History of money
2. b)   Currencies in the UK and USA
3. c)    At the bank
4. d)   Public finance
5. e)   Methods of payment, internet banking
6. f)    Your attitude to money
7. a)   History of money

• But money was not always the same form as the money today, and it is still developing.
• Before money people used barter system to exchange their products.
• Subsequently both livestock, particularly cattle, and plant products such as grain, came to be used as money in many different societies at different periods.
• The earliest form of banking was developed in Mesopotamia (around 2000 BC) when temples were used to store grain and other valuables used in trade.
• People in early societies used a number of commodities that everyone agreed to accept in trade.
• Various items were used – Aztecs used cacao beans, Roman soldiers were paid a „salarium“ of salt, the early U.S. colonists used tobacco leaves or animal skins.
• Human slaves were also used as currency around the world.
• Gradually, people began exchanging items that had no real value, but only an agreed-upon or symbolic value. An example is the cowry shell, used mainly in Africa and Asia. The cowry is the longest used currency in history.
• Paper money was first issued in China in the 7th century.

1. b) Currencies in the UK and USA

• Currency in UK is pound.
  • Notes are called pounds and coins are called pence – 1 penny, 2 pence.
  • On the bank notes we can see Queen Elizabeth II.

 

• Currency in USA is dollar.
  • The word dollar comes from the word thaler, which was the name of first minted coins in Bohemia in 1520.
  • Bank notes are called dollars and coins cents.
  • Bank notes are all have same size.
  • On the front side we can see some US president, on the back side there we can see for example great seal or famous building (capitol, Washington monument).

 

• In 1999 Monetary union was created and Euro was introduced.

 

1. c)   At the bank

• Bank is institution which deal with money and provide other financial services.
• Banks buy and sell money for profit.
• Firstly you have to open an account with the bank.
• We have many types of bank accounts:

1. Current account

• You have to deposit some money.
• Then it is used for paying by debit card and paying bills.
• It has low interest.
• You can also withdraw money in ATM.

     2)    Saving account

• On this type of account you deposit your money for example every month and you can withdraw it after for example 5 years.
• This account has higher interest than current account.
• Joint account

• ATM

–        When I want withdraw money I have to do it in ATM.

–        Firstly you insert your card.

–        Then choose a language and key in your PIN number.

–        Press the withdraw cash button.

–        Choose the amount of money you want.

–        Take your card.

–        Take your cash.

1. d) Public finance

• The government collects money through taxes.
• There are many types of taxes:
  • VAT – it’s including in the prize.
  • Income tax – from your salary.
  • Inheritance tax – when I inherit something.
  • Customs duties – when I order something from USA a have to pay customs duties.
  • Unemployment benefits – government gives out the money for the unemployment people. They must be registered at job centre.
  • Pension benefits – government gives out the money for people in retirement.

 

• If you don’t have enough money for something, you can take out a loan.
  • Loan is money lent to a borrower by a lender.
  • This money you have to pay off in instalments.
  • Instalment is increasing by interest, so you pay off more money than you borrowed.

 

• When you want build a house, you can take out a mortgage.
  • It is a long term loan.
  • Real property (building) is uses as a guarantee.
  • So if you are unable to pay off your loan, your property becomes in fact property of bank.

• In rare situations, the price of everyday items can get extremely high. It is called hyperinflation.
  • When this happens, the currency loses its value and money become worthless.

 

1. e)   Methods of payment, internet banking

• We can pay in cash or by card.
• History of credit card
  • Frank X. McNamara was having dinner with friends at a restaurant.
  • When he went to pay the bill, he saw, that he had forgotten his wallet.
  • His wife hat to come and bring his wallet.
  • He realized that there was a need for a credit card that could be used to pay for things at different stores and restaurants.

 

• There are two main types of payment card:
  • Credit card – when you use a credit card, the money you spend is actually a loan, which you have to pay back later, usually with interest.
  • Debit card – a debit card takes the money out of your bank account, when you pay.

 

• I think that payment by card has many advantages:
  • You can make payments without using cash in shops, restaurants, hotels and so on.
  • You don’t need to have money with you so it protects you against losses – you can block your card.
  • It is fast payment method, when you have contactless card – you only put your card on terminal and you needn’t insert the card into terminal.
  • Comfortable.

• Disadvantages:
  • In some shops they don’t accept credit cards.
  • If you have only cash, you are more careful and see how much you spend.

 

• Internet banking: You have access to your account through a personal computer connected to the internet.
  • Advantages:

• • • Through internet baking we could send money from our account to another without going to bank.
    • We could also check how much money we have.

 

• Disadvantages:
  • When we lost our notebook or mobile phone with certificate from bank (we must have it to enter our internet banking) somebody may steal all the money we have.

1. f)       Your attitude to money