Understanding money, for everyone

The nexus point for the Knowledge and Wealth blog and the best attitude to deal with money

Growing up, you hear plenty of different perspectives on personal and general finance. Because money is at the core of the society we function, everyone is affected by money in one way or another. Almost everyone is emotional about money. Why? It allows people to buy goods and services such as water, food, housing, and leisure.

If you’re a young person, it can be confusing. Who do I listen to about money? Is money good or bad? What should I do with money and how should I feel towards it?

And the chances are, if you’re from a low- and middle-income household, money is seen as a negative thing. Your parents probably hate rich people who flaunt money and believe it’s an evil thing that has control over you.

But let’s start with the basics. What is money and why do we use it?

Using the Wikipedia definition, money is “a commodity accepted by general consent as a medium of economic exchange.”

It’s important to have this definition because it highlights one of the key problems money solves - the double coincidence of wants. The reason we require money is because if I want to own a good or use a service, without money, I would need to trade something of equal value to the seller. And what's easier, cutting up a couch into pieces, or just giving a piece of paper?

WE NEED MONEY FOR SOCIETY TO FUNCTION AND GROW

So, let’s talk about why people love or hate money or people with money.

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