Have you ever seen coins in your piggy bank or bills in your parents’ wallet?
That is money!
Money is something we use to buy things like toys, clothes, food, or even a bus ticket.
Without money, it would be very hard to get the things we need or want.
Let’s dive into the world of money and understand what it is, how it works, and why it’s so important — all in a fun and simple way!
What Exactly is Money?
Money is anything that people use to buy and sell things.
It can be:
• Coins
• Bills
• Digital money (like when we use cards or online apps)
What Did People Use Before Money?
A long, long time ago, there was no money!
So how did people buy or get things?
Barter System:
People used something called the barter system.
In this system, they would exchange goods.
For example:
• Rina has 10 apples
• Tom has 5 bananas
They trade 5 apples for 5 bananas.
No money used!
But this was a problem.
What if Tom didn’t want apples?
Then the trade wouldn’t happen.
That’s why people invented money to make trading easier.
Why Do We Use Money?
Here’s why money is super helpful:
Easy to Use:
No need to carry apples and bananas around to trade.
Just use coins or bills!
It Has Value:
Everyone agrees on how much it’s worth.
For example, 10 means the same to you, your teacher, and the shopkeeper.
You Can Save It:
You can keep it in a piggy bank or a real bank for future use.
You Can Compare Prices:
You can check how much things cost and choose what fits your budget!
What Are the Different Types of Money?
CoinsÂ
• Made of metal
• Small and round
• Come in values like 1, 2, 5, 10
BillsÂ
• Made of paper or plastic
• Come in values like 10, 20, 50, 100, 200, 500
Digital MoneyÂ
• Not seen as coins or bills
• Used through mobile apps, debit cards, or online banking
Example:
Your parents may pay the pizza delivery person using an app like PhonePe or PayTM.
That’s digital money!
Where Do We Use Money?
We use money everywhere!
Here are some places where money is used:
Place What You Buy With Money
Grocery Store Fruits, vegetables, snacks
Toy Shop Toys, games, puzzles
School Canteen Food, drinks, treats
Clothing Store Clothes, shoes, bags
Bookstore Books, pencils, crayons
How Do We Know How Much Money to Give?
Every item has a price tag — it tells us how much it costs.
Example:
• A pencil = 5
• A notebook = 20
If you buy both, you give 25 in total.
Money helps you count, compare, and choose.
That’s why learning about money also helps you become better at math!
Where Does Money Come From?
Money isn’t just made at home or at shops.
It is printed and managed by a special place called the government or central bank.
In India, money is made and managed by the Reserve Bank of India (RBI).
They:
• Print the notes
• Decide how many coins to make
• Make sure people don’t make fake money
 How Do People Earn Money?
People work to earn money.
Job What They Do How They Earn
Teaches students in school Gets salary
Doctor Helps people get better Gets fees
Shopkeeper Sells items like toys, food, etc.
Earns profit
Farmer Grows crops and sells them Gets paid
Then they use that money to buy things they need — food, clothes, house, etc.
What is a Bank?
A bank is a safe place where people keep their money.
Banks help people to:
• Save money
• Get interest (extra money)
• Use ATMs to withdraw money
• Send or receive money online
Example: If you save 100 in a bank, the bank may give you 5 extra after some time.
That’s interest!
Fun Examples to Understand Money Better
Let’s look at some fun examples to make things even clearer:
Example 1: Buying Ice Cream
Riya wants to buy an ice cream that costs 20.
She has one 10 note and two 5 coins.
10 + 5 + 5 = 20
She can now buy the ice cream!
Example 2: Saving for a Toy
A toy car costs 100.
Rohan saves 10 each week.
In 10 weeks, he will have 10 × 10 = 100
Then he can buy the toy car himself!
Fake Money — What’s That?
Fake money is money that looks real but is not made by the government.
Using fake money is illegal.
That’s why banks and shops use machines to check if money is real.
Conclusion: Why Understanding Money Is Important
Money is a big part of our lives.
It helps us buy what we need, enjoy fun things, and plan for the future.
By learning how money works, how to earn it, save it, and spend it wisely, you can become a smart money user — even as a kid!
Always remember:
Money is not just for spending, it’s for learning too!
