The Purpose of Money

by Myron Kliewer

Part 1

Money, money, money, some of us would rather not think about it, we say, "Money is the root of all evil". Other ones of us find it all to easy to become preoccupied with every penny that passes through our hands. When it comes to the use of money, many of us find it hard to strike the right balance. It seems so easy to fall into one of two extremes, we cannot live with it, nor can we live without it. Let's start by asking ourselves, is there a healthy way of dealing with this basic necessity of life?

First of all, let's define this magical word. Money is simply a medium of exchange that is widely accepted in payment for goods and services and in settlement of debts. If we look back in history we can see how the use of money developed. It has a very practical function for each of us. As a medium of exchange and a measure of value it facilitates the exchange of goods and services. Without money, trade would be reduced to barter, or the direct exchange of one commodity for another. This was the means used by primitive people, a person having something to trade would find another who wanted it and had something acceptable to offer in exchange.

As trade begin to develop, man devised the use of money as a tool to make buying and selling simple. Therefore, money served as a standard of value for measuring the relative worth of different goods or services. In today's economy, there are three kinds of money: commodity money, credit money and fiat money.

COMMODITY money is where the value of the commodity money is equal to the value of the material contained in it, i.e. usually silver, gold and copper. Gold coins circulated in the US before 1933 are an example of commodity money.

CREDIT MONEY is paper backed by promises by the issuer, usually the government or a bank, to pay the equivalent value in the standard monetary form.

FIAT MONEY is paper money that is not redeemable in any other type of money and the value of which is fixed merely by government edict is known as fiat money. The American "greenback" or the British "Ten pound note" would be examples of fiat money.

For most of us, our income and expenditure revolve around fiat money, money in our wallets or bank account. It is very important for us to see that money is only a tool to buy, sell and save. It is no different than a calculator for an accountant or paint brush to an artist. Its main purpose is to help keep our lives simple.

Why does managing our money become such a big preoccupation for many of us? Could it be that we have become so preoccupied with the strokes of our paint brush that we have lost sight of the picture we are painting? We have become so obsessed with ownership that we have lost sight of a very simple fact of life. Is it possible that we were never meant to be owners? Surely there is Someone responsible for the sun and stars, the rivers and streams, the rain and snow. Someone who is continually providing us with the air we breathe and the water we drink as a free gift. It makes sense that He is the true owner, and in His generosity, He gives it to us as a gift. He can do this. It is his "right" because He is the Owner.

Where does that put you and me when it comes to money? We are stewards, men and women who have been given responsibility. We may be a mother or father and have a small family. We may own our own business, be department managers or possibly even directors of larger companies. Together we all face the same simple basic facts of life -- when money passes through our hands it is to be used as a tool, not to be sought after and possessed, but to be used to help encourage us to express true love and stewardship to each other and the world.

Is there a healthy way for us all to view our finances and possessions? I believe there is. Maybe we are having problems with money because we are living as if we were the owner "with rights" rather than stewards "with responsibilities"?

To be continued.

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