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The use of objects for exchange goes back to ancient times. Sometimes people would barter things directly, but they also used currency to trade goods. Natural items like shells were used as money to make trading easier.The shekel in Mesopotamia—the oldest known CURRENCY—was used about 5,000 years ago. By the first millennium (1–1000 A.D.) coins made of materials like lead, copper, silver and gold were being used in Europe, Asia and Africa.

Paper money, like coins, could be easily carried and made trading faster and more convenient. But paper money has its problems, including counterfeiting and losing its value.

Early paper money was a written promise to pay in the future, usually in gold or silver bullion. The bills often had elaborate engravings and signatures by the bankers to try to defeat counterfeits (fakes).

Counterfeiting Colonists 

Examining money
An employee uses a magnifying glass

to inspect the printing plates to make sure all

of the details are perfect before printing begins!

The Massachusetts Bay Colony used the first American paper money. It was issued in 1690 to pay for a military expedition to Canada, according to the American Numismatic Society. Numismatics is the study of currency, including coins and paper money.

Counterfeiting was a big problem in colonial times. Founding father Benjamin Franklin was a renowned printer who, besides printing newspapers and his famous almanac, provided currency for several colonies. 

Franklin was named as the official printer of Pennsylvania in 1730 at age 24. Franklin and partner David Hall were also the official printers for New Jersey and printed currency for Delaware, too. One way Franklin tried to foil counterfeiters was to make his printing plates from molds of real leaves! 

By the time of the Revolutionary War, when the 13 Colonies were fighting for independence from England, paper money was used to pay for military expenses and for running the colonial governments. Each colony was printing its own currency. Great Britain challenged the colonial currency, not only because it supported the war efforts but because it also was used as propaganda. Unflattering, incendiary images of King George III and patriotic depictions of the Minute Men were common artwork on the paper bills.

A national form of paper money was first issued by the Continental Congress in 1775. But this money was almost worthless after the war, making many Americans reluctant to use paper money.

If you’re one of the lucky fans who has seen mega hit musical “Hamilton,” or if you listen to the soundtrack or watch the online videos, you may already know that George Washington’s “right hand man,” Alexander Hamilton, was the first Secretary of the Treasury. You can see likenesses of Founding Fathers and original money men Franklin and Hamilton on the $100 and $10 bills. 

OK! 100% Authentic Money

Hamilton helped establish the Bank of the United States in 1791 and established credit for the fledgling U.S. government. The Bank of the United States was a private bank, but it is considered the first central bank. Other private banks around the country continued to issue their own currency. With so many different banknotes around, counterfeiting was a big problem.

There were also problems with paper money being depreciated (losing value). During the Civil War, both the North and South printed money to cover the costs of wartime. Confederate money, even more than Continental currency, was worthless after the war. Americans were once again suspicious of paper money.

After a financial panic in 1907, the Federal Reserve was created in 1913 when President Woodrow Wilson signed the Federal Reserve Act. Its job is to be a buffer between the government and the economy in order to prevent financial crises. The Fed manages America’s money and sets interest rates.

Now that you know the origins of American currency, think of the ways you and your family use money.

First off, how do you get money? Do you earn an allowance? Maybe you just got some money during the holidays or on your birthday! More enterprising young people might pick up extra chores around the house, pull weeds at a trusted neighbor’s house or sell stuff they’ve outgrown or don’t need any longer!

Of course, you can try to go the celebrity route—singing, dancing, acting or become a YouTube phenom like 7-year-old Ryan. His family-run channel, “Ryan ToysReview,” has hit it big with 17 million followers and earned $22 million from June 2017 to June 2018. But being a child star doesn’t always turn out so well, and we’ll stick to more ordinary ways kids can earn a buck with more moderate amounts to work with.

Now that You’ve Earned It, What Should You Do With It?

Counting money

When it comes to money, young people usually think of the things they can start buying with it—toys, apps, clothes, favorite foods or treats, books, tickets to the latest blockbuster or more stuff for your collection or hobby. Teens might start thinking of some services they might spend their money on like getting their nails done, having their hair styled and colored or getting their wheels serviced.

Do you know the difference between buying the things you want versus buying things you really need?

Sure you can spend it, but there are other things you can do with your money. Top on the list is to save it. You also can invest it or share it.

Sometimes what you really want to buy costs more than you have. And it’s a really good idea to have money set aside for future, unexpected needs. Both require saving money. Sit down with your mom or dad or an older brother or sister who is good with their money and set some goals.

How much would you like to save each week? How much are you going to BUDGET for spending per week? And, if you think giving or lending your money (maybe to help other people) is something you’d like to do, how much of your money are you willing to share?

Younger kids can find three clean jars, label them SAVINGS, SPENDING and SHARING, and find a safe place to keep them. Keeping your goals in mind, when you get some cash, decide how much to put where. And if you meet your savings goal, maybe use some of your spending money to treat yourself to something for doing a good job!

Gift cards generally end up in your spending jar, which can free up cash in there to transfer to your savings jar! But you also can donate gift cards and put them into your sharing jar.

And if you’re saving up to purchase something special, keep an eye out for sales and shop around (online is convenient) so you don’t end up paying too much.

The Art of Money

stack of coins

Have you ever held up a bill to see the watermark or metallic band in the paper? Do you ever wonder why there are so many designs, patterns, numbers, pictures and signatures on bills? A big reason is to prevent counterfeiting. But besides the practical reasons, the design of paper money and coins can also be considered works of art.

Loose money

An early coin designed by Ben Franklin reminded Americans to “Mind Your Business,” or pay attention to your work. First President George Washington did not want his image to appear on coins, as he thought this sent the wrong message—since kings and emperors put their likenesses on coins, he believed that he should not follow their example. Instead, the personification of Liberty was used to adorn U.S. coins, and still is. Washington did not appear on the $1 bill until 1869.

Many people collect coins and old money for the interesting features and artful designs. Of course, old and rare coins and bills can be very valuable, too! Do you have a coin collection?

George Washington

This is Interesting!

When you’re serious about saving your money, visit your parent’s bank or credit union and have them open your own savings account! Check first to make sure you have the minimum amount to start one—for many places, it’s around $50. And from time to time, you can take the money out of your savings jar and go with your parent to DEPOSIT it into your account.

It’s a really good habit to save—your money is safe and insured by the government. Plus, for every dollar you keep in your savings account, the bank or credit union will pay you INTEREST to help your savings account grow. On top of that, it will start paying you based on the combined amount of what you put in and the interest you’ve earned. This is known as compound interest.

Traditionally, savings accounts don’t pay a whole lot of interest. So being a good consumer, you can see what other higher interest rates are offered for certain minimum amounts and for certain amounts of time that you’re willing to INVEST your money into. Some of these higher interest-yielding accounts also are federally insured but other types of investments might not be.

To help you understand more about money and to help you get into good money habits (the earlier the better!), check out “Money As You Grow,” put together by the President’s Advisory Council on Financial Capability. A PDF summarizing 20 Things Kids Should Know to Live Financially Smart Lives can be seen here: