Money World: How Money Works for Kids

Money World is the first stop in the Wealthonauts universe, and it is the best place to learn how money works for kids. Here, explorers discover what money is, why people invented it and how it changed over thousands of years. Goldie, our money history guide, leads the way.

How money works for kids, in three jobs

Money has three main jobs. First, it is a medium of exchange, which means people use it to trade. Second, it is a unit of account, so we can compare prices, like a $2 apple and a $4 sandwich. Third, it is a store of value, because you can save it and spend it later. When something does all three jobs well, people treat it as money.

From barter to coins to digital money

Long ago, people often bartered. For example, a farmer might trade eggs for shoes. However, barter only works when both people want what the other has. Over time, people used shells, salt, metal and eventually coins and paper money. Today, most money is digital. In fact, most dollars in the United States exist as bank deposits, not as cash in wallets.

Prices, inflation and purchasing power

Prices do not stay the same forever. When prices of many things rise over time, that is called inflation. As a result, the same amount of money buys less than before, so its purchasing power falls. Prices also move because of supply and demand. If many people want something and there is not much of it, the price usually goes up.

Start exploring Money World

Begin with the lesson What Is Money?, then travel back in time with Gold, Silver and Paper Money. To practice using money wisely, play Build a Budget.