- Money is everything that serves as a universally accepted medium of exchange or means of payment.
- Money gives the value to nearly everything.
- a) History of money
- b) Currencies in the UK and USA
- c) At the bank
- d) Public finance
- e) Methods of payment, internet banking
- f) Your attitude to money
- 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.
- 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.
- 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:
- 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.
- 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.
- 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:
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- 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.
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- 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.
- f) Your attitude to money