How much for that doggy in the window?

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Could a lack of understanding of the physical quantity in the financial transaction relationship be one reason for the lack of appreciation for the value of money?

In our previous post, we discussed the importance of good distinction making and perspective taking in teaching about “needs” and “wants” in financial literacy. We explored how our thinking and learning could be incomplete without taking into consideration the “not-needs/not-wants” in life.

In this article, we will deepen our thinking by recognising relationships.

The history of money

(My students at the kindergarten enrichment class called the diagram above “How money grew up”. How’s that as an interesting and creative thought?)

We begin our exploration by recognising that what we use as money has been changing across time; and as a result, much of our concrete understanding of the physical quantity in the monetary exchange relationship has been lost.

Our understanding of money has become more abstract and conceptual in recent times, rather than being a concrete experience as in ages past. I believe that for our children to fully appreciate the concept and value of money, we need to rekindle their understanding of the physical quantity in the transaction relationship.

Let’s return to the beginning

To do this, I believe that we need to first return to explore the very beginnings of how money came about.

In the beginning of the “older forms” of money, there was barter trading where one would exchange their surplus items with what they wanted from another person. While this had its problems, such as that not everyone could always agree upon the value of the relationship between the traded items, the physical quantities in the relationship were clearly apparent.

As we know how the story goes, compounded with other problems such as the perishable nature of some items and that not everyone might want the items we have, barter trading soon gave way to other forms of transactions such as using cowrie shells, precious stones and metals.

This solved some of the problems in barter trading by providing a common currency for exchange, and at the core of these “old forms” of money, the physical concept of quantity in the transactional relationship remained clear.

However, it was not always practical to rely upon physical quantities, especially when the value was high and we had to carry around large and heavy amounts.

The present day and the future

Hence, the “new forms” of money of our present day notes and coins arose.

However, while the underlying concept of the relationship value remained, this was now in a more abstract form.

With notes, for example, instead of an increasing physical quantity when the monetary value increased, only the numerical digit value increases. One single piece of paper note could, for example, be assigned with a numerical value of $10 or $10,000, instead of having to carry around ten $1 notes, or ten thousand $1 notes. The concrete understanding of money as a physical quantity has now become more abstract and conceptual.

A fifty dollar note and a two dollar note, while different in value, are both physically just one piece of paper note.

Moreover, with the “newer forms” of money such as cards, cheques and electronic transactions, there isn’t even any physical exchange in the transaction anymore.

With a card, for example, the payment is deducted without us having to give the card away. Likewise with electronic transactions, we just enter in a numerical digit into the computer without having to physically trade away something.

With the widespread use of electronic and cashless forms of money such as cards, the concept of money as a physical quantity might be slowly fading away. Tapping or swiping a card for payment does not quite provide the same learning experience of value as counting and paying out of physical forms of money.

What have we lost as a result?

Could a lack of understanding of the physical quantity in the transaction relationship be one reason for the lack of appreciation for the value of money?

All we see now is the representation of money through numerical symbols, and the situation is compounded when the teaching of numbers in mathematics is not anchored through making the relationships between the numerical symbols and the physical quantities apparent. (I’ll write about this in another article.)

Could this be one reason why children find it hard to appreciate the value of money, when they cannot really see and grasp the value of the relationship as a physical amount? There are of course many other factors, but especially for children just moving into the operational stages of their cognitive development, I believe that to help them in their understanding of what money is, we need to first let them experience again the relationships of the physical quantities of money.


At MindLife Success’ “Let’s Plan a Party” programme for kindergarten and primary school students, we anchor children’s foundation of the physical concept of money through an experiential learning approach. Using play cards to represent the different items can help students see, feel and relive the relationships in monetary transactions as a physical exchange of quantity, thus gaining a greater appreciation for the value of money.

Contact us for more information today.

(article by Ling Hua Loon: hualoon@mindlifesuccess.com)

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