Money Is an important paert of our everyday lives. we use it ot buy food, Water, Electricity, Travel, Save and invest for better future. But have you ever think of money actually and why it is very important of our daily life and help live a life with normal human being.
In Simple Word, Money is anything Widely Accepted as a means of payments for and services for day to day basis life.
So let’s understand meaning of money, Function and it’s Importance.
Table of Contents
What is Money?
Money Is medium that Peoples use to buy and sell good and services.
In early time, in 1900s before money came into existed there is a system callled barter system for exchange of good and service.
Example: If you have gold or silver coins any other rare thing valuable in return you get food like rice, wheat or clothes, etc.
when money replaces the old method like barter system it is easy to do trade of goods and services.Every process of exchange become very low risky and transparently.
Nowadays, you don’t have carry physical money with you. Now, Everything done online without any physical Money Paper. Online Payment done within seconds in on your smartphone without any interupt into it.
So in simple word, it is an medium of exchange to provide service and trade for buy and sell.
what are the main functions of money?
Money plays important role in everywhere in our personal life as well as Economy of our country.
1.Medium of Exchange
The most importnat function of money is that it is allow us to buy and sell thing easily
Example :
you go for hair cut in saloon and charge for haircut and trimming around 100 rupees in exchange you get good looking haircut services just sitting on chair front of mirrors.
Money Makes exchange easily without any doubt getting less valuue to each other.
2. Unit of Account
Money Gives You exact Value of good service.
For Example
a. Price of 1kg Rice is 120 Rupees
b. Price of T-shirt and pant is 1500 Rupees.
c. Laptop cost around 50,000 Rupees
3. Store of Value
Money Can be saved and used in the future
For Example
if you save money life 3500 per month for 2 years or 24 months straight without any touch this money for anything. Over a peroid of time this money generated earns more value with more money which we called interest .(interest meaning in other blog). Suppose this over 2 years period of time give money returns 92000 after 2 year for your future or emercyency.
4. Standard For future Paymments
Money Aloows us to Plan Payments That will happen in Future
For Example:
- EMI Payments
- Rent
- Returns
- Insurance
Money make easy to calculate and plan accordingly future requirements to be meants.
Why Money is important?
Money Is Important it helps us to meet our basic needs and achive our Financial goals.
- House
- Investment
- Dream vacation
- Marriage
- Education
- Healthcare
- Wishes
Provide Financial Safety
Money gives you power to see, feel and vision in our life. To dream big in life and it gives sense of freedom. This freedom gives more Quality live, Gives more choice in like careers option, choice of materialistic thing like car, bike cloths etc. gives more family time which very important in this time peroid.
Most important in time peroid of emrgencies like non cure disease treatment, major illness or accident, sudden misfortunte etc. Emergency Money will helps you to take care of near ones in your family. Personal Finance comes into this place properly prepared for this type of situation to deal with it in our life.
Frequently Asked Question
What is th simple Definition of Money?
Money Is medium that Peoples use to buy and sell good and services.
What are main function of Money?
The main Function include:
- MEdium of Exhange
- Unit Account
- Store Value
- Standard for Future
Why is Money important in Personal Finances
Money is important because it helps you manage expenses, build savings, invest and achieveing financial goals.
Is Digital Payee also money?
Digital payments are very trendy thing nowadays it is transaction online without any physical money and doing just online by using apps with secure pin on mobile iwht help of internet.
- What is Personal Finance?
- What is Financial Literacy
- What is Income?
- What is an Expense?
- What is Budget?
- What is Saving?
- What is Inflation?
- What is Investing?
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