You are working with your child on the concept of money – that’s exciting!. This concept is basic and has many different aspects. If you want to address it as thoroughly as possible, you came to the right place.

We “defined” money and discussed it in our previous post. The question we answered was basically – why most people choose to use money over other alternatives. You should probably read it if you did not do that by now.

On this post, we discuss the idea of changing money. We’ll use a “case study” and examples to clarify how this concept simplifies modern trade. You can also find free worksheets for memorizing and practicing coins and banknotes of the US$. So, get on to the post and enjoy today’s lesson.

Using money, we can change it to suit our needs. We can change coins with other coins or banknotes. We can also change banknotes with other banknotes and coins.

In order to explain the concept of changing money, and its importance, you can use the following “case study”. Your child needs to purchase a toy by changing one valuable object with another valuable object. Tell him or her to pretend he or she has a goat. The toy’s cost (worth) equals the value of a chicken. Offer your help by changing the goat with three egg-laying hens. Ask your child if he or she would make the transaction? How exactly? Is it rewarding? Complicated, eh?

The first thing you both can work on with this example is the idea that, if two objects vary in their qualities, they will probably vary in their value. In other words, the chicken and the hen don’t have the same value. The owner of a chicken can enjoy X benefits from it, while the hen owner can enjoy X+1 benefits. Therefore, changing one for the other is not fully rewarding.

So, the toy’s worth is lower than the value of the hen. Buying the toy with the hen will mean the loss of financial ability. Ask your child what he can do in order to complete the purchase without any financial damage. Are there any good alternatives? What will he or she do, if the cashier accepts chickens only? That is a deal breaker, isn’t it?.

These examples demonstrate how using money in commerce simplifies transactions. If all participants use the same instrument, which is a certain currency, it is simple to execute the trade. In a given economy, the participants measure the value of objects according to the same measurement unit, the local currency. The country has the power to issue money – coins and banknotes. Those are the legal tenders we all use in our everyday life.

Now, it is time to learn the coins and banknotes available in your economy. Here are the names and images of the official United States coins and banknotes, and some worksheets to practice the concept of changing money.

After you covered the “theoretical” part, you both can “play” with the circumstances of the case study. You can ask your child how the scenario changes if he or she has a banknote of 20$, the toy’s cost is 13$, and he or she has to prepare the exact amount of money for the purchase? How can he or she change the banknote into 13$?

In addition, you can make conversation about the symbolic role currency has for the country issuing it, just like a flag or an anthem; the connection between a strong currency and a strong economy; and, how countries limit the issuance of coins and banknotes to control inflation. Either way, come read about all of these on our next post in this series.

Have anything else in mind? Please comment below. Thank you.

Enjoy your Family Time About.