The World of Money

Author: Mala Kumar

Illustrator: Deepa Balsavar
Money is important. We need it to buy things to eat and drink, to have a place to stay, and to get an
education. In this book, you will learn why money is important and how we can earn money. We also need
to know how to spend money and how to save it. It is important for us to have enough money during good
times and bad times in our lives.

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Did
you
know?

Give something, and take something else! Back in the Stone Age, if a child wanted a piece of
deerskin to keep himself warm, he would have to give the deerskin owner a polished axe
head in exchange for it.

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 Money is Important

In the olden days barter was the only way to get something one wanted. If Damu had a cabbage but wanted a
loaf of bread, and if Kushal had a loaf of bread, Damu could give Kushal the cabbage and take the loaf. In
some communities, barter is still the only way to do business. But in most parts of the world today, paper
money is the mode of exchange. There are many interesting ways in which money is used, exchanged, and
valued in the world.

Ma, I need a
new dress!

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In the 1600s, people in America used tobacco leaves as exchange. Imagine carrying a stack of tobacco
leaves to pay your school fees! But leaves as money is better than some other things that have been
used as money.

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In New Guinea, dogs’ teeth were used as money, and in the Pacific Islands people
used whale teeth as money. In Ethiopia, they used coins made from salt!

I’m rich!

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 What is Money?

Money is something that is given in exchange for something that you want. It could be a thing, like a book,
food, shirt, house or cycle. You give money to a person in exchange for these things.

We sell
things.

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Sometimes what you get in return for money is not an object but a service. Money can be exchanged for a service that you
need. We pay money to the railways so that a train can help us travel from one place to another. We pay money to doctors
if we want them to see why we are ill or get medicines to treat our illness. Money is given to barbers who cut your hair, or
electricians who repair a faulty fan.

We sell
services.

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Money is also something that can be stored for use later. We can keep money in a safe place at home, or give it
to someone who will keep it safe for us. Money can also be saved in a bank (What’s this? Refer to Book 2 - How
Money Travels!) where our money can be safe and even grow. Money can be stored in many forms. Banks
prefer to save money in the form of currency notes, gold coins or gold jewellery.

We look
after your
money.

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Rupee
Symbol

While we think money is a thing, it is actually an agreement to use a thing as a means of payment. In
India, the citizens, with the guidance of the government, have agreed that we will use the Rupee as a
means of exchange.

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 Does money grow?

People deposit money in a bank. The bank pays a ‘reward for

saving’, called interest, to those who have deposited money.
Banks lend some of this money to people who want to borrow.

The borrower has to pay a ‘fee for borrowing’, which is also

called interest, to the bank. The bank earns more interest than it
pays, and after making all its expenses,

earns a profit which it distributes to its owners who are called

shareholders.

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Sri Icelandic Papua New British Australian Nepalese ru Central African
Lankan krona Guinean kina pound dollar pee CFA franc
rupee

Is money the same as currency?

We require money in our day-to-day life to buy whatever we need. Every country
and every civilisation has a different way of measuring money. The physical
objects used to measure money are called currency. Coins and notes are
currency. Each country has a different name for its currency. In India, our
currency is called Rupee.

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 Where do notes and coins come from?

The Government of India prints paper money and casts coins in places called
mints.
The biggest mint in India is in Nasik. Would you like to visit it?

Independent India introduced the Anna Series on August 15, 1950. On one side,
the coins had the image of the four lions called the Lion capital of Ashoka. The
other side had images of corn sheafs to signify progress and prosperity.
In 1950, one rupee consisted of 16 annas. Since April 1957, a rupee has been
divided into 100 paisas.

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How should we treat currency?

We should not staple the currency notes

We should not write on the currency notes

We should not put a rubber stamp or any other mark on

the currency notes

We should store the currency notes safely to prevent any

damage

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Did
you
know?

Nobody wants these

new coins. They still
want to barter with
India was one of the first issuers of coins, goats and crops!
somewhere in the 6th century BC. In the
museum at Vaishali, in Bihar, there are
hundreds of metal coins from that period. Coins
were made of gold, silver, copper and even
leather.

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Learn to Earn

You may have heard your parents or teachers saying that

money does not grow on trees. Most people get money
by earning it. When you do work, you get something in
return for the work. Earning means getting money for
work done. A doctor earns money by working to cure
illnesses. A farmer earns money by growing crops and
vegetables and selling his produce. A lawyer earns money
by working to prove who has followed the law of the land
and who has not. A singer earns by singing at a concert. A
lucky few earn money by playing! For Sachin Tendulkar,
Saina Nehwal and Baichung Bhutia, playing their game is
the work that earns them money!

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Getting money from someone as a gift is not the same as
earning.

Taking out money from the Automatic Teller Machine

(ATM) is not the same as earning.

Finding money on the ground is not the same as earning.

Taking away money from a classmate’s pencil box is not

the same as earning.

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 ​

There are many ways of earning money. Some people work on a regular job.

The employer pays the employee for working for a fixed number of hours,
for a fixed number of days each month.

The earning that comes from working in a job is called a salary.

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 I’m a teacher. I earn a
monthly salary.

I’m a trader. I earn

by trading goods.

I’m a doctor. Hope

I’m a taxi driver. you are well. If not,
The longer I drive, come to me!
the more I earn.

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 I’m a broker.
I earn by bringing
buyers and sellers
together.
I’m an artist. I
decide the price
of my artwork.

And this is how I

This is how I stop you from
earn! earning!

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 Some people work on their own. Many artists, illustrators,
craftspersons and authors work for themselves. They are their own employers.
After they have produced their painting or book, they sell it to others for a price.

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 Learn to Spend

It is easier to spend money than to earn it. Learning to spend wisely is as important as learning to
earn. How much each of us spends depends on three things: availability, necessity and
affordability. Each family has a basic necessity that has to be fulfilled. Rohan’s parents have some
definite expenses each month.

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 Electricity Rent Milk, vegetables,
fruits, biscuits,
bread
Water

Wheat, rice,
sugar
Cooking
gas

School
fees
Bus pass for
two people

Petrol for the

scooter
Maintenance for
parents who stay in
their native place

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Apart from the monthly expenses that families have, there are other expenses, some expected and some
unexpected. On some days, when Rohan’s mother is unable to pack lunch for him, she gives him money to eat in the
school canteen. Rohan’s family occasionally uses a taxi to go out together. Sometimes they go to see a film in the
city. Money also has to be available when the scooter breaks down. Money has to be saved in some form for such
expenses. People keep family money under mattresses, in cupboards, or in their purses. Children save money in
piggy banks.

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When there is a need for something more expensive, people save for it over many months. Or they buy things on
credit. One can save for an object, like a mobile phone; for something like a trip to a tourist spot; for higher
education; or for painting the house. To be able to buy a refrigerator in 12 months, Rohan’s mother puts away
`600 each month. At the end of the year, she plans to buy the fridge.

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 BUY NOW But Rohan’s aunt, who earns a monthly salary as a dress
PAY LATER! designer, has another plan. She has already bought a
refrigerator even though she does not have the money to
buy it now. She has bought it on credit; she will pay in
small instalments every month. But she has to be sure
she will have enough money from her salary to pay the
instalment every month or the shop owner will take away
the fridge.

Rohan’s grandfather, who is a small farmer, spends

during the harvest season. He earns a good amount after
the crops are harvested and sold. So he saves enough for
expenses he expects during the year, but he buys new
clothes for the family and gifts for his grandchildren
during this time.

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A bank is not just
where you keep
money, it is also a
place where
money is lent to
others for useful
purposes in a
society.

Instead of saving money at home, one can also save in a

bank. A bank rewards its customers for saving by giving
them interest on the money saved.

‘Aamdani atthanni, kharcha rupaiyya’ is a famous song in

Hindi. It means people tend to spend more than what
they earn. As far as possible, we must keep our expenses
within our earnings.

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 You’ll have to
return it
May I borrow
tomorrow!
your pencil?
Learn to Save

Many unexpected things happen in our day-to-day life.

When your pen stops writing, you borrow a pen from a
friend. But what if he does not have a spare pen? When
we do not have enough money to pay fees, or to buy an
essential item, we borrow money. Money can be
borrowed from a friend, relative, bank or a private money-
lender. When the money is returned, we have to pay an
interest for having got the money when it was needed.
Money can also be taken out from one’s own savings.

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 Whenever possible, people buy valuable things that can be exchanged for money in times of need. In farming communities
people buy and raise cattle, goats, hens and pigs. When they need money, they sell one or more animals. When there is extra
money in the family, some people buy gold, silver or land, so that they can use this when bad times hit them. These are called
assets. (What’s this? Refer to Book 2: How Money Travels!)

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 Yes, of course! These
Do you have are for my daughter’s
assets? education. That lot is for
my scooter!

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An asset is like a safety net that is used by trapeze artists in a circus – the net stays unused for most of the
time, but if the acrobat falls, it guards him. Similarly, an asset stays unused for long, but when there is a
sudden need for money for any sort of emergency – increase in school fees, medical expenses, celebration
in the family – an asset comes in handy, ready to help you. The value of an asset increases with time.

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Things to do when you run short of money:

1 Borrow from a bank, self-help group, or a known

person. But always return within the time agreed.

2 Spend less

3 Remember to save for the future

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 Learn to be Prepared For good times and bad times

When there is an illness, accident or death in the family, the family needs a lot of money. Money is also required in case of
incidents like theft, damage to vehicles, breakage of important household objects like the water pump, collapse of a wall in
the house and so on. Sometimes, when the monsoon fails, or there is a drought or floods, crops fail, grains get spoilt and
farmers need money to buy seeds again. At such times, it becomes very difficult to get money immediately. Smart people
invest in an insurance policy (What’s this? Refer to Book 4 - Be Wise with Money) for such times. Insurance is a way of saving
with an institution that pays the policy holders or families some of the expenses caused due to such events.

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 What! If the price of oil goes
Prices have gone up in Saudi Arabia, why
up, Amma! should vegetable prices go
up in India?

Prices keep going up and down too. Vegetables become very costly during summer.
If there is a war in a country that exports oil, oil prices go up in our country.

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35/37
 Celebration in the family like a marriage or a festival also involves spending a lot of money.
At such times, a group of people pool in money, and share the expenses.

In a community, some members collect money from everyone, and use the collected fund to organize a community
celebration. This happens during festivals. When someone wins a big prize in a television quiz show, the winner can
celebrate alone or with his family, friends and community. The winner has to pay a tax (What’s this? Refer to Book 3 – The
Money Managers) to the government. Winners can also donate money to organizations that are doing community work.
Families also save money for expenses that they foresee such as college fees for their growing children, travelling or building
a house.

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 Careful with your money!

Everyone should be careful with money. Why? Currency notes can get lost, coins can drop
out of pockets, cheques can get stolen. There are many modern ways that help us manage
our money better – banks, smart cards like debit and credit cards, ATMs and internet banking.
To learn about money is a wise and wonderful thing to do!

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Images Attributions:
Cover page: Coins and piggy banks, by Deepa Balsavar © Pratham Books, 2013. Some rights reserved. Released under CC BY 4.0 license. Page 2: Barter
system, by Deepa Balsavar © Pratham Books, 2013. Some rights reserved. Released under CC BY 4.0 license. Page 3: Exchange, by Deepa Balsavar ©
Pratham Books, 2013. Some rights reserved. Released under CC BY 4.0 license. Page 4: The girl with th axe, by Deepa Balsavar © Pratham Books, 2013.
Some rights reserved. Released under CC BY 4.0 license. Page 5: The boy with dried leaves, by Deepa Balsavar © Pratham Books, 2013. Some rights
reserved. Released under CC BY 4.0 license. Page 6: The happy whale, by Deepa Balsavar © Pratham Books, 2013. Some rights reserved. Released under CC
BY 4.0 license. Page 7: Transaction, by Deepa Balsavar © Pratham Books, 2013. Some rights reserved. Released under CC BY 4.0 license. Page 8: Different
Professions, by Deepa Balsavar © Pratham Books, 2013. Some rights reserved. Released under CC BY 4.0 license. Page 9: At The Bank, by Deepa Balsavar ©
Pratham Books, 2013. Some rights reserved. Released under CC BY 4.0 license. Page 10: Rupee, by Deepa Balsavar © Pratham Books, 2013. Some rights
reserved. Released under CC BY 4.0 license. Page 11: Tree of Money, by Deepa Balsavar © Pratham Books, 2013. Some rights reserved. Released under CC
BY 4.0 license.

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permission. For full terms of use and attribution,
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The development of this book has been supported by Parag:
A Sir Ratan Tata Trust initiative
 This book was made possible by Pratham Books' StoryWeaver platform. Content under Creative
Commons licenses can be downloaded, translated and can even be used to create new stories ​‐
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Deepa Balsavar © Pratham Books, 2013. Some rights reserved. Released under CC BY 4.0 license. Page 14: Don't, by Deepa Balsavar © Pratham Books, 2013.
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rights reserved. Released under CC BY 4.0 license. Page 22: Money -less and more, by Deepa Balsavar © Pratham Books, 2013. Some rights reserved.
Released under CC BY 4.0 license. Page 23: Money's a circle, by Deepa Balsavar © Pratham Books, 2013. Some rights reserved. Released under CC BY 4.0
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permission. For full terms of use and attribution,
http://creativecommons.org/licenses/by/4.0/
The development of this book has been supported by Parag:
A Sir Ratan Tata Trust initiative
 This book was made possible by Pratham Books' StoryWeaver platform. Content under Creative
Commons licenses can be downloaded, translated and can even be used to create new stories ​‐
provided you give appropriate credit, and indicate if changes were made. To know more about
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Images Attributions:
Page 26: New Refrigerator, by Deepa Balsavar © Pratham Books, 2013. Some rights reserved. Released under CC BY 4.0 license. Page 27: Excited Man, by
Deepa Balsavar © Pratham Books, 2013. Some rights reserved. Released under CC BY 4.0 license. Page 28: Boys, by Deepa Balsavar © Pratham Books, 2013.
Some rights reserved. Released under CC BY 4.0 license. Page 30: Grazing Goats, by Deepa Balsavar © Pratham Books, 2013. Some rights reserved.
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Released under CC BY 4.0 license.

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The development of this book has been supported by Parag:
A Sir Ratan Tata Trust initiative
 The Rupaiya Paisa Series brings out many useful facts about money
that will help children to use money wisely as they grow up in an

The World of Money ever-changing world. What were early coins made of? How do
people earn, save and use money? Can the family buy a fridge even
if it does not have the money for it today? Find out all this and more
(English) in The World of Money, Book 1 in the Rupaiya Paisa Series.

This is a Level 4 book for children who can read fluently and with confidence.

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