what is money
Defines the money It is a legal tender, and a means of exchange circulated between people and specified by governments. Money is usually represented by banknotes and coins, and in most cases money is synonymous with cash. Money has different instruments, the most famous of which are checks, and each country has private funds that its residents exchange within its borders in exchange for goods.[١]
The difference between money and capital
Money itself is not capital, as the former is used primarily to buy goods or services, while the latter is intended to last long and to produce more wealth through investment; thus, the banknotes that individuals own, spend or keep are not capital, but rather a mere instrument of exchange, even if the value of those banknotes is large; as they do not Connect with the person And the community to prosperity.[٢]
The right way to manage money in countries
Countries that want to become more wealthy must produce more goods and services in greater quantities and with higher quality, not just print more banknotes. If production falls, the banknotes that are put into circulation will not solve the problem of falling production. Rather, their relative purchasing power, or the things people can do with them, will solve the problem of falling production.[٢]
How people manage money
In order for a person to manage his own money, he must first manage his income; so that he spends less than he earns. To be able to do this, a budget must be prepared that includes a list of the categories that the person needs monthly and the corresponding amount of money needed to obtain them, each category separately, while leaving a portion for saving based on the desired goal and living conditions. It is recommended during implementation to constantly track the places of spending; so that the person stops spending in a specific category when There is an opportunity for this, and other categories can be allocated funds. Additional to it after deducting it from another category and so on.[٣]
the reviewer
- ↑ WILL KENTON (6-2-2018), “Money”، www.investopedia.com, Retrieved 19-3-2019. Edited.
- ^ A for Peter Pham, “What Is Money?”، www.forbes.com, Retrieved 19-3-2019. Edited.
- ↑ MIRIAM CALDWELL (31-1-2018), “How Can I Manage My Money?”، www.thebalance.com, Retrieved 19-3-2019. Edited.
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