Importance of Money: Dollars Make Sense

importance of money“There are so many things more important than money.”

How many times have you heard phrases such as this? There are such conflicting messages that our culture sends regarding money. Some say money is everything (along with being famous). On the opposite side of the coin are those campaigning how not important money is. But actually, the fact is that money is important (thought not in the way you might think) and you should try and learn as much as you can about it, such as with a course like this one about making sense of your money.

Money is important to different people in many ways. Money is used for doing a lot: for buying a home rather than living on the streets, for filling your fridge and pantry with food, and for keeping your car in proper running condition. Many people wouldn’t be happy without money, as you need money to buy personal hygiene products, clothing, and other necessities.

When we have all we need, we barely think about how practical and important money really is. But without it, money certainly becomes important. Has this got you thinking? If so, you might want to find more ways generate money, which you can do with a course like this one  entitled Getting Started Online- Save Money Make Money.

Money is a Necessity in Today’s Economy

Money is a basic necessity in today’s economy. During the beginning of human existence, the needs of humans were so simple that the barter system worked well. In systems of barter, folks produced more goods than they needed and traded the extra goods for something they wanted in return. The barter system has disadvantages however, such as difficulty in storing extra goods, lack of common value measured and a lack of double coincidence of wants.

The advantage of using money is that it decomposed a single transaction of barter into 2 separate transactions that involved a purchase and a sale. People can hold their wealth as a generalized power to purchase which can be used to buy services and goods when they wanted to. So what happened was that money became the pivot point around which revolved the entire economy. It had the sole power to directly purchase things in the market and yet does not require that you spend it. Every system of economics, whether it is Mixed, Socialist, or Capitalist, requires money to function.

When it is regulated, money can serve mankind. On the other hand, money out of control can lead to consequences that are disastrous. Ever heard that saying, “Money is a bad master but a good servant.”? Indeed, keeping money under your control is much more preferable than being under its control! Because of money, governments are able to collect sources of public revenue such as penalties, fines, fees and taxes.

Money has been a primary contributor to the growth of economies all over the world due to the trade barriers that have been removed. Since it has removed trading barriers, money has contributed to growth of the economy all over the world. With the assistance of money, producers can buy plants, raw material and machinery. They can pay corporate taxes and settle their debts. Because of money, consumers can pay for services and goods. Money may not produce anything but without it, you can’t produce anything much.

There are many important purposes served by money allowing us to function well as a society. However, people may sometimes abuse money. The country’s laws determine which are illegal practices in pursuing the acquisition of money and which activity uses money illegally. On the other hand, people can use money for goals that are noble and may exceed the actual worth of money, such as helping the needy and the poor.

Money is an Important Standard of Value

Money is a standard of value. We speak in terms of how much something is worth in terms of how many dollars it costs. Naturally, money needs to represent or have value in order for there to exist such equivalence. There might be intrinsic value in money, as in the case of silver or gold coins. Money that is worth its face value is called ‘full bodied money.’ Money can also be representative of other valuable objects for which you can exchange it for. These days, ‘fiat money’ is what you call our coins and paper bills. This is another way of saying that government-declared money be legal tender for discharging debt and payments.

Money is an Important Store of Value

Money is also value stored. If you make a decision not to use it for a longer time period, down the line you can still use it. However, your money’s value decreases over time due to inflation. To counteract inflation, you can invest your money such as depositing your money into an account that bears interest, for example. This will help increase the value of your money over time. Not only will your own cash garner interest, but guess what-the gained interest also earns—you guessed it—more interest. Compound interest is the term for this. Since money has total liquidity, this means that at all times, you can use it. Other money-like assets usually can be turned into money fairly cheaply and quickly.

You Need Money for Buying Personal Necessities

Money is a medium of exchange first and foremost. You use it for buying stuff. An older form of exchange is called barter, where two consumers exchange services or goods with each other. However, this is not always practical or possible since you may not always get in return what you really need or want. This issue is solved by money. The value of money is not necessarily for having the cash itself but for being able to use it for buying anything you possibly want and need. The seller would happily take your money because he knows he can use it for buying anything from anyone who will receive it.

Money Can Give You Choices and Freedom

To many people, money can be considered as very important depending on your material needs and lifestyle. In and of itself, money is not exactly spectacular. However, what you can have from it makes it quite valuable. Money gives you choices and freedom. You can decide how and where you want to live when you have good financial resources or a good income.

On the other hand, choice is something you won’t have very much of when you don’t have enough amounts of money. As a matter of fact, I might even say that choice won’t be something you will be able to afford without money or that the available choices to you may not be real choices at all.

Naturally, you will need to cover your basic expenses with money including shelter and food. Beyond that, the life you want for yourself will determine how much money you need. Most folks are happy with middle class lifestyles.

Typically, those who belong in the middle class can have adequate access to services, goods and education. Also they can generally afford to own their own property and have fair amounts of discretionary income. This means that they have money they can use to satisfy not just basic needs. Money enables you to have more freedom for carving your own path and having more control over your life. There will be fewer limitations on your choices. Money is also important because it lets individuals or businesses select causes and charities they believe in and give back to the community.

Money Lets You Give the Best to Your Children

Money is important because it means being able to give your children the best start in life the best health care and the best education. With money, you won’t have to worry too much about paying bills or how to put food on the table. Naturally, you can also spoil children with money as well but then it is up to you to shower your kids with the best while still not giving them so much excesses that their life views won’t be realistic while at the same time teaching them the value of money.

Money is important because then you won’t have to worry constantly about keeping your head above water. It means that you won’t be living pay check to pay check or that you won’t be dependent on being employed. This is especially true when you learn how to become a great money manager, the way this course teaches you.  Basically, you can live a fuller life when you have money, enjoy tastes, textures and adventures for the remainder of your years. Money buys you a lifestyle that is more comfortable. And isn’t it true that human beings are hard-wired to look for comfort, safety and warmth? When you have money, it won’t take too much effort to get these.

Money is Important for Business

In the field of business, the role of money is important. Companies need to have money in a healthy supply in order to remain in business. The money can be in the form of investments or hard cash. Many new businesses borrow funds to cover the high costs of starting up associated with starting a business. Labor, equipment, inventory and rent are just a few factors that cost when you run a business.

The cash flow of a company is vital for its business. The statement for cash flow shows how money goes into and exits the business. As a matter of fact it is due to problems with cash flow that most businesses fail. Examples include companies not having enough funding to get bills covered or that don’t wisely invest extra cash.

Now that you understand the importance of money, you might be interested in learning how to save some.  Here is a course entitled How to Save Money that shows you how to get yourself started on the road to financial independence.