Aniruddha Pimpalkhare - Financial Awareness for Students

Chapter 1 - Introducing Money

Ever wondered what money is? Whydoes the $100 bill that your dad gives at the local mom and popstore, gets you goodies, which bring a smile on your face? Why doesthat $100 bill have so much power? What if there was a worldwithout money? What if you had all the money in the world? Why doesthe car in which your dad zooms around costs 100 times more thanthe car which you playfully zoom around in your house? Why doesyour dad use a plastic card to pay the bill at your favorite restaurant and does not use cash, which heotherwise would, to buy you a Hershey bar?

What if you could earn Money justlike your mom and dad?

If you have had all thesequestions, then you have come to the right place!

Today we want to unravel the secretof money and teach you what money is! We want to make sure that thenext time you go out with your friends and family, you can impressthem with your knowledge of money and finance, get a gold star,earn plaudits and be the envy of many. We would like you to be thatfinancial whiz kid which others can only dream about! So let us begin straight away, with thehistory of money and start your journey of becoming asuperstar!

Chapter 2 - Barter System

Thousands of years ago there was nomoney! Yes, you heard it right, there was no money. If you dreamedof owning that jazzy skateboard, which your friend John had, whileyou owned the best Disney bike -a gift from Santa, which you hadoutgrown by then-, then you could simply exchange it with yourfriend. So John would have the bike and you would have theskateboard. Back in the old days, this was a common practice.

If you had lemonade while yourfriend had a candy, then you could simply exchange it with eachother, if both of you agree.

Read carefully the last 5 words -if both of you agree. It would be unfair to exchange a Star Warsstudded bike for a small piece of candy.

Back in the Flintstones era, people did not have money. Theyexchanged goods, which they had, with their friends, only if theyfound the values of the products matching and worth exchanging.This system was called as the barter system.

These days, use of the bartersystem is not so common. We exchange a fancy Benjamin Franklinfeatured $100 note to buy whatever we want. This is a better ideathan exchanging bikes or candies. We will tell you why:

No judgement involved:Earlier we used judgement to exchange goods; we used to scratch ourheads and think whether John's skateboard in exchange for my bikeis good enough or worth. Now with the invention of money, thisproblem disappears. Now we know exactly how much money is requiredto own a pack of chips or Oreo biscuits.

Store of Value: If you and afriend want to exchange your 5th December, Boxing day,New York Yankees vs. St Louis Cardinals ticket for his Nikesweater, then both of you will have to do it before 5thDecember. Because after 5th December your ticket willhave no value, and you will probably also grow a few inches tallerand the sweater will not fit.

With the invention of money, thisproblem too disappears. You can save money and use it to buywhatever you want and whenever you want; it can be that5th December ticket or something which you want to own 6months down the line.

Who makes coins and bills?

The U.S. Treasury Department isresponsible for overseeing production of paper currency andcoins.

The Bureau of Engraving andPrinting produces paper money.

The U.S. Mint generates thenation's coins.

There are intellectuals who sit atthe helm of the US Treasury Department to oversee this process.

One common question you might havehere is, can I print US dollars and buy all the stuff, which I havealways dreamed of? Well, the answer is a sorrowful no. It isillegal and punishable by law. What chaos will happen if printingcurrency at home was legal? Most of us would just print currencyand not do any productive work. For example, a carpenter might findit easier to print currency than to make furniture to earn money.To avoid such a scenario, the US Treasury department oversees theprinting and we have to earn this money by doing hard work. Thatsthe reason why your Dad or Mom goes tooffice everyday so that they can provide basic necessities forfamily members.

Chapter 3 - Earning Money

How do you earn money? Now that isa Million Dollar question! There are 2 types of people in thisworld: Good and Bad. Both make money but their ways aredifferent.

Good people: - They work smart,hard and fair in their life. They study a particular subject, whichthey are fond of.

Some like football; they make acareer in that. Some like psychology; they make a career in that.Some also like money and finance, those people work in banks.(Doesnt that seem like a good option already?)

Bad People: - There are some peoplewho steal or loot and make their money. What if someone stole yourbrand new PlayStation 3? Would you likethat? Of course not!

Always go for the good, fair path.If you follow the unfair, bad path, you would be unpopular, hatedin society and finally land in jail one day.

We should have high aims in life!Characters like The Joker from The Batman Returns are good onlyin movies ; never aspire to be likethem!

Be useful to society, start alemonade business that spans the entire globe or get a fancy job asa Baseball team manager, which will earn you enough money that canbuy you all the riches in life.

Chapter 4 - Using Money

Wise people are extremely good atdistinguishing between needs and wants. They purchase stuff, whichthey need, not want!

Consider the case of a wristwatch.Wise people would buy a decent looking wristwatch, but spend moreon getting themselves educated and in turn get themselves popularin society. Wise people know how much they can afford.

Unwise people like to show off.They do not understand that spending beyond one's means isfinancially dangerous. They would buy the most expensive wristwatchthere is in town and spend less on getting themselves educated!People admire the wristwatch, but the admiration stops there.

If both the wristwatches are goingto show the same time then why bother with the expensive one?

Summary be wise, save a little,spend a little and donate a little! Your change is someone elseswealth.

Chapter 5 - Importance of Saving

The Ant and the Grasshopper

It's story time!

Before we go ahead, let us read ashort story.

With the break of dawn, a littleant woke up from its sleep. Weary eyed, she did not want to do thework that lay ahead of her. She got out of her home, went to thenearest field and took a morsel of grain on her back and startedtrotting back home. On the way, she met a grasshopper who wasblissfully playing the violin as he soaked in the morning sun. Thegrasshopper casually asked the ant as to why she was working sohard when it was time to enjoy and play. The ant replied sayingthat she was storing food for the winter and advised him to do thesame.