Gold, Silver and Paper Money

Gold and money for kids is a story that spans thousands of years, and Goldie loves to tell it. In this lesson, explorers learn why gold and silver became money, how paper money started as a promise to pay in metal, and why today’s Federal Reserve notes work differently.

Gold and money for kids: a quick timeline

First, ancient people used gold and silver because these metals are rare, shiny and do not rust. Later, kingdoms stamped metal into coins so people did not have to weigh it. Then banks issued paper notes that could be swapped for metal. Finally, many countries, including the United States, moved to money that is not tied to gold at all.

What explorers will learn

• Why gold and silver were good choices for money
• How paper money began as a receipt for metal
• What Federal Reserve notes are
• When the U.S. dollar stopped being tied to gold
• How inflation changes purchasing power

This lesson has three age levels. In addition, each level separates history from today’s law, because the rules for money have changed many times. As a result, kids learn to ask “when?” whenever they hear a claim about money.

Keep exploring

Next, see who issues paper money today on Federal Reserve Station. You can also study real U.S. banknotes with the U.S. Currency Education Program, or practice saving in Bank Explorer.

How to use this lesson at home or in class

Start with the level that matches your learner, then try the next level up when they are ready. For example, a family can read the Junior story together, while an older sibling works through the Advanced version. Because every level covers the same topic, this gold and money for kids lesson works well for mixed-age groups, homeschool co-ops and classrooms. Finally, the quiz shows what stuck, and the summary makes a quick review the next day.