Accounting

Have You Ever Thought Life Would Be Easier Without Money?

Chapter 2:

Have You Ever Thought Life Would Be Easier Without Money?
There have been many times when we have wondered why we have to have money in the
first place? It seems to be such a problem. Wouldn’t it be easier if everyone just helped
each other out and gave away stuff to people who needed it?
Of course, we probably wouldn’t want to go to work every day if we didn’t need to be paid.
And, we’d probably try to get everything we wanted without providing much for everyone else.
It might be fun for a while, but when food ran out and everyone was sitting around on
the beach enjoying the sunshine instead of growing more food, delivering more food,
and making our lives nicer with every service and product they provide, we’d probably
wish for money again.
Money has power, money has energy, and with money we can buy things to make our lives
easier, more convenient, and richer. We can pay someone to do things for us or make things
for us or provide products or services. We can even pay to learn new things. Money is
neither good nor bad, but can be used for good or bad purposes. It all depends on what
the person with the money wants to buy.
So, why do we even have money and how did our economy develop?…
Long ago, there was no money. People had to get their own food, clothes, and shelter. If
you didn’t have something, you had to go out and get it yourself. This was very difficult.
People had to work hard to provide everything they needed. Consequently, they didn’t have
much.
Then, there was bartering. People would trade something they had for something they
wanted. People lived in small communities. They didn’t have to travel far to trade their
goods. However, bartering had its limitations. The biggest and most obvious limitation
was that you might not want what the other person was trading. For example, let’s
suppose you had eggs and someone else wanted your eggs. They offered you spinach for
your eggs. Only problem was you wanted to get bacon for your eggs.
Not much you could do if you only traded eggs and they only traded spinach. You’d
have to live without bacon unless you could find another neighbor willing to trade bacon for
eggs. However, the neighbor with the bacon didn’t want eggs, they wanted milk. Serious
problem developed while trying to coordinate all that between the neighbors and their needs.
So, they started coming up with something that was valuable to everyone and it was used
for trade. This may have been beads, animal skins, grain, or shells. People would trade
the item that was used for trade for the goods they needed. In this way, they would pay for
things and have uniform prices (6 measures of grain for this and 2 measures of grain for that).
When paper money and coins came about, the paper was a note to trade in and exchange
for gold or silver coins. However, there was more paper money than the silver or gold
that it could be exchanged for. The coins became more valuable than the paper, because
they were made of the rare metals and they were honored most places. They were heavy to
carry and so they had their drawbacks.
Several steps leading up to our current monetary system:
• No money
• Bartering
• Trading Common Items (Shells, Beads, Skins, or Grain)
• Paper Money and Coins
Paper money was different from each bank and was not always honored from bank to
bank. It reminds me of arcade tokens. The only place you can use them is at the arcade that
issued them. You use them all while you’re there, and you just end up with a bunch of ski ball
tickets that are worthless anywhere else.
The money system became very confusing and there was no consistency or regulation.
Then, in 1861, the US Treasury printed the first greenbacks. They could not be
exchanged for gold or silver and lost their value. After several attempts and improvements,
they came up with a system that limits the amount of notes that can be produced each year
and makes them difficult to counterfeit. The kind of notes we have today are backed by the
federal reserve and cannot be traded in for silver or gold on demand. However, people have
become accustomed to this form of money and as long as people have faith in the value of
the dollar, there will be value in the dollar.
Problems with Current Monetary System:
• Electronically Figured and Moved (We never see it)
• Abstract Concept
• Disconnection with Money
• Hard To Keep Track Of It (So Many Accounts and Cards)
• Able To Spend Money We Don’t Have
With the invention of modern computers, on line banking and credit and debit cards, most of
our money is really not paper at all, but it is electronically figured and moved. Most
transactions today don’t even involve currency at all, but are electronically debited from one
account and deposited to another.
This convenient way of keeping track of our money can also make it seem to be an endless
supply. Since we don’t see it disappear, it doesn’t seem concrete. It’s an abstract thing,
rather than real dollars that we can feel and touch. We have cards and numbers and
checks that we can produce money with whenever we want to buy something. We tend to
lose track and lose responsibility as well as losing touch with how much we actually have.
Many people have no clue what their bank account balances are. They don’t even balance
their checkbooks. They just spend with their cards and when a card doesn’t go through, they
spend with another card. This lack of responsibility comes from a disconnection with
our money. We can’t see how much we have and we lose track.
Accounting software can help to solve this problem and keep track of the many accounts that
we have. It is important to find a program that is easy to use and will track all spending
and income from each source. It should also track the debts we have and the credit we
have available. This way, we can get a handle on how much is really there. It’s better to be
realistic than to live in a fantasy world where money is created out of cyberspace and
magically deposited into an account somewhere beyond this dimension.
If you can’t find a program that is easy to use, you won’t use it…
This is really important when looking for a program. It may be worth the extra money to invest
in a good program that you can stick to for years to come. The money you will save by being
on top of your finances will pay for the difference in price.
Most people have tried to budget and have given up. It is imperative to have a budget in
order to get out of debt. Even a simple record of the money coming in and going out can help
a family to focus on what’s most important, financially. This may involve peeling back the
layers of hurt surrounding money and financial issues, but it’s worth it to face the problems
and move closer to your goal of becoming debt free.
Making a budget doesn’t have to take hours each month if you use a computer
program to keep track of the expenses and income. Looking at our past habits will give
us a more realistic view of our future. Even a simple ledger can help to organize our
expenses and income into manageable categories and if set up right will allow us to record
information month after month and compare how we are doing with other months.