Functions of Money and Emotional Barriers Towards Money (Essay Sample)

Name Professor Course Date Functions of Money and Emotional Barriers Towards Money Functions of Money Money has been known to take various forms over the years from shells, and cows to printed money. All forms of money throughout the years have always had three things in common; they were a store of value, a unit of account, and lastly, a medium of exchange (Hendrik, 1029). Money by any means is seen to be a store of value. Work done today and money is earned, an individual can choose not to spend it and instead hold on to its value till tomorrow or even next year. Holding money has been seen to be one of the most effective ways of storing value compared to holding other things such as food which is known to be perishable. However, even though it is an efficient store of money, it is not perfect in this particular function. Aspects such as inflation erode the value or purchasing power of money as time passes. Secondly, money is a unit of account (Hendrik, 1031). It is seen as a yardstick for measuring value in transactions. For example, when shopping for an item, the price is typically quoted in terms of money (Hendrik, 1031). The only thing that differs from one country to the next is the currency but most if not all activities, and objects are valued in terms of money. Across the board, it is considered a unit of account for any item and as such, makes it easier to transact and highly convenient. Lastly, money is said to be a medium of exchange (Hendrik, 1033). Payment just as the price is often made in monetary terms. Money is generally the most accepted form of payment be it public or private. It is commonly referred to as legal tender because of this attribute. Emotional Barrier Towards Money As with life, money is equally attached to the perceptions and notions individuals have about it. Emotional barriers towards money stem from the negative connotation that is associated or attached to money (Hoogendoorn et al., 1137) Often, individuals perceive it as a negative attribute yet all facets of life are affected by money. Money is not the only component in life but a sizeable if not almost all variables in life are affected by money. It is therefore paramount early on, to foster a positive notion about money. One’s emotional attitude towards money affects their risk tolerance and in turn what they are willing to do with what one has in terms of money. An individual’s risk appetite is a culmination of various factors and emotional barriers form part of it. Emotional barriers can also be historical in nature and passed down by older members within a household or the culture within a community setup. The best way to avert such incidences is by gaining knowledge on money and becoming conversant on how it works. Through ...