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• Money serves various purposes, including:
• Before the creation of money, people used barter to trade goods or services
• Bartering relies on a 'double coincidence of wants' and agreeing on a rate of exchange
• Bartering requires surplus goods and can be time-consuming
• Gold was used as an intermediate item for trade, but its value could fluctuate based on availability and demand
• Coins were made of low-value metal and had representational value
• Coins were smaller, more portable, and durable, evolving into standard shapes like modern coins
• Modern payments:

  • Most purchases made using coins, banknotes, or electronic transfers
  • Barter systems still exist in some communities
  • Informal barter includes trading skills like gardening or baby-sitting
  • Formal systems like Local Exchange Trading Systems (LETS) operate on credits without cash
• Features of money:

  • Money must be acceptable, durable, recognizable, portable, stable, scarce but sufficient, divisible, and homogeneous
• Means of exchange:

  • Money enables people to make payments
  • Legal tender coins and banknotes must be accepted in settlement of a debt
  • Banknotes for Scotland and Northern Ireland are not legal tender but widely accepted
• Scottish and Northern Irish banknotes are not legal tender anywhere, including in the countries that issue them, but they are widely accepted
• The value of the banknotes is backed by these banks holding account balances at the Bank of England
• Local currencies are created by some communities to encourage people to spend in local shops and keep money in the local economy
• Bitcoin is an electronic form of currency that is decentralised and not backed by a central bank like the Bank of England
• Money is used as a store of financial value for future use
• People can borrow money to buy goods they can't afford immediately, paying back in small amounts over time with interest
• The aim is to find a savings interest rate higher than the rate of inflation to maintain or grow purchasing power
• The same goods can cost different prices in different countries due to factors like cost of living, wage rates, and taxation
• When travelling abroad, it's important to consider the relative costs of accommodation, transport, food, and drink
• The majority of money is held as bank account balances rather than coins and banknotes
• Different types of bank accounts are designed for various purposes such as saving, borrowing, and making payments
• Current accounts can be used to fulfil all purposes of money and are offered by banks, building societies, and the Post Office
• People can use current accounts to store money for future use or borrow money through overdrafts for short-term needs
• Young children receiving an allowance are likely to spend most of their money and save for higher-value items
• Young adults may spend most of their money on living expenses
• Adults with better wages may spend on living expenses, borrow through a mortgage, and save for the future
• Parents might borrow for family expenses and find it difficult to save
• Middle-aged people are likely to be saving for old age after paying off debts
• Retired people are more likely to spend all their income, which has decreased since employment