When I was growing up in the 1960’s, it was a common practice to give a young boy or girl a piggy bank as a birthday present. Parents routinely gave piggy banks to their children and then repeatedly reminded them to “put your money in your bank.” Ask any boy or girl today what a piggy bank is and the only response you’ll get will most likely be a blank stare. Of course, they would be able to give you a detailed description of Lady Gaga and tell you what an iPad is, but they wouldn’t have a clue as to what a piggy bank is.
Ask that same boy or girl to define money and the response would most likely be: “it’s something you buy things with.” Ask an adult what money is and he or she would have trouble giving you an acceptable definition.
The dictionary defines money as “something generally accepted as a medium of exchange, a measure of value, or a means of payment as officially coined or stamped metal currency, money of account, or paper money.”
Re-read that last sentence and tell me if you’re satisfied with the definition. Do you now have a clear understanding of what money really is? If not, can you come up with a better definition?
For a country as advanced as the United States, the lack of knowledge and understanding among its citizens about money is appalling. Ask 10 people to define money and you’ll get 10 different abstract definitions. Most people define money as the colored paper and metal coins that they have in their pockets or purses. Some use more sophisticated ways of defining money by using the “medium of exchange” terminology.
If most Americans don’t have a clear understanding of what money really is, how can they be expected to properly save it, manage it, spend it, and acquire more of it?
Here’s my definition of money:
A certificate of stored value that acts as a substitute for completed work and creativity.
There are six key words in the above definition: certificate, stored value, substitute, work and creativity.
When I was in grade school, there was a popular television show about the exploits of Daniel Boone, an American pioneer and frontiersman who was born in 1734. Daniel Boone was recognized as one of the first folk heroes in the United States. He was best known for his exploration and founding of the village of Boonesborough, Kentucky. He died in 1820 at the age of 85.
The man who played Daniel Boone on the television show that I watched was an actor by the name of Fess Parker. The show was set in Boonesborough, Kentucky in the 1770’s (just before and during the American Revolution). Fess Parker was an ideal representative of what we would all imagine as an early American pioneer – honest, rugged, tough, no-nonsense, charming, and faithful to God and family.
I remember one of the shows where Boone rode into town to purchase some items. He walked into a local business with a handful of furs that he wanted to trade-in for some supplies. After some small talk, Boone and the store owner had a discussion about the value of the furs and what items Boone could take in exchange for the furs.
That’s the way business was done back then. If a man was good at hunting and skinning animals, he could take the furs he acquired and trade them for supplies. If the supply store owner didn’t want furs, but needed the services of a blacksmith, the hunter could go to the blacksmith and trade the furs for an IOU from the Blacksmith, and then pass the Blacksmith’s IOU on to the store owner in exchange for the supplies.
The trading and exchanging of goods and services was known as “bartering.” Because bartering was a cumbersome and inefficient way to conduct business (even in the 1700’s), local governments developed their own currency (money) to facilitate business transactions. The money that was developed by local governments was more in line with my definition of money (“A certificate of stored value that acts as a substitute for completed work and creativity”).
The important thing to remember about money is that it was initially developed to represent the stored value of an individual’s work and creativity. With a currency (money) system in place, a hunter could sell his furs in exchange for money, and then turn around and use the money to purchase supplies at the local store.
In modern times, the concept of money representing stored value has been lost – primarily because over the last several years our federal government has flooded the marketplace with money that has been created “out of thin air” (rather than by the work and creativity of individuals). There have been catastrophic consequences to our government’s creation of money without any stored value being attached to it. Unfortunately, I don’t have the space here to explain what those consequences have been.
So what does what I’m saying here have to do with being a good Catholic? A lot.
Whether we realize it or not, money plays a critical role in most aspects of our lives. When we overextend ourselves by borrowing or spending too much money, we create problems for not only ourselves, but for all of the people who are important to us – our spouses, children, friends, creditors, employers, employees, etc. It’s a well-known fact that one of the primary causes of marital strife is the mismanagement (and lack of) money. When we have money problems, we are focused more on how we’re going to make ends meet than on how we can serve God.
Before we can ever expect to have a true appreciation and respect for money, we have to first understand the fundamentals of what real money represents – stored value that originates with our own work and creativity. If you want more money, you’re going to have to figure out how to create more value for others – your employer, your employees, your business partners and acquaintances, your customers, your clients, your patients.
Regardless of what the politicians say, the majority of people who have created wealth for themselves have figured out how to provide more value to the marketplace than most other people. They need to be given credit for their creativity, resourcefulness, and work ethic (instead of making them out to be villains).
So what’s the first thing you should do after you’re done reading this article? Go out and buy piggy banks for your children and grandchildren and teach them what real money is and how to generate and save money (by creating value for others).