Pieniądze – co warto o nich wiedzieć?

We work for them, we live thanks to them. Money is a topic that causes controversial opinions. The truth is, however, that everyone's life depends more or less on them. But what is money really and what is worth knowing about it?

What is money?

It is said that time is money and that money rules the world. Money is generally talked a lot and in a very different way. But what exactly is money? By definition, money is a widely accepted means through which payments are made for purchased goods and services. The purpose of money is to facilitate the valuation of goods and services, and to make transparent transactions.

Money is one of the most durable and oldest foundations of civilization and has been used almost since the beginning of organized social structures. Before the money appeared, barter exchange prevailed, i.e. one commodity exchanged for another. If barter were valid until today, if you want to buy a kilo of apples in a store, then you would have to give away another product, e.g. half a kilo of pears or 400 grams of plums, if the shop owner needs them. Barter exchange is therefore a problematic and inefficient way to buy and sell products. For this reason, the idea of ​​introducing money, i.e. a widely accepted means of payment, whose transfer with each other will not pose logistical problems quickly appeared.

In the old days, the function of money in different countries was fulfilled by really different objects, such as grain, honey, grains of certain plants or teeth of certain animals. Usually, they chose a subject popular in a given geographical region, which was widely considered a means of payment.

Later, some kind of coins were created, which, however, did not resemble today's ones. At that time, money was lumps of metals such as copper, iron or precious metals. Such a system was simpler than barter exchange, but it was still the source of several problems. First, its value depended on weight, so each transaction required weighing coins. Secondly, the quality of the raw materials of individual lumps used as coins varied, leading to confusion and conflict. In this case the saying "pennies deny better" works because people tried to accumulate lump-coins with better quality raw materials, and get rid of those with smaller ones, which caused more and more lump-quality coins to appear in circulation. People were just trying to get rid of lump-quality coins.

Over time, transaction methods based on primitive lump-coins have been perfected in many ancient countries. Finally, unified coins appeared in Europe around the 3rd century BC.

Banknotes appeared much later, only in the 9th century AD on the territory of China. In Europe, banknotes entered circulation even later, in the 17th century. The ease of using them, however, meant that they quickly became popular and are today a widely used form of money.

Money also has several key features:

  • All people use and accept them - the fact that money is important is even instilled in young children and we all believe in them significantly.
  • They play the role of valuing goods and services - everything that can be purchased is expressed in a given money.
  • It is a means of storing value - you can have money today, but use it for transactions later, e.g. in a month.

Is money really worth it?

The power of money is based on social contract and that we all absolutely believe in its value, from ordinary bread eaters to celebrities and bank governors. In fact, modern money is not something other than a digital record, a piece of paper in the form of banknotes or copper discs, which are coins.

So if suddenly all or at least most people stopped using money, it would become completely worthless. However, faith in money is enormous and shaped over thousands of years of civilization development, which is why you can be sure that money was, is and will be very important in everyone's life.

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What future awaits money?

Forms of money are constantly evolving, which we have seen clearly in recent decades. Until the mid-twentieth century, money was only material. However, with the development of information technology, money has also become digital. The importance of intangible money which is a kind of computer record is constantly growing and some predict that quite soon electronic money will fully replace traditional banknotes and coins. This solution should bring a number of benefits, e.g. easier analysis of the flow of money by institutions operating with corruption. In addition, there are arguments that dematerialized money is easier to use.

Others, however, point out that the errors and failures of the IT systems responsible for handling digital money could have catastrophic consequences, and therefore we should never completely move away from the material form of money.

In recent years, so-called cryptocurrencies, i.e. only virtual money over which no institution has control and supervision. Some cite a number of advantages associated with their use and indicate that it is cryptocurrency that the future of money belongs to. However, most experts believe that while cryptocurrencies will evolve, they will never become the dominant form of cash because their use is too risky. The cryptocurrency circulation is fully anonymous and can potentially be used e.g. for illegal transactions.

Money and the level of happiness felt

Cash raises a number of emotions, some believe that they do not bring happiness, while others do everything to have the most. The relationship between the amount of money owned and the level of happiness felt has even become the subject of numerous debates, from which emerged a science called the economy of happiness.

Research results generally indicate that money only gives happiness up to a point. This means that you only need the amount of money you need to satisfy your basic needs. In other words, for a person who is hard to make ends meet, receiving several hundred zlotys can be very happy, while another million on the billionaire's account will no longer affect his level of happiness. As Arnold Schwarzenegger once said, "Money doesn't give happiness. I now have $ 50 million, but I'm just as happy as when I was 48 million. "

In Poland, however, a large proportion of people achieve relatively low incomes, and rarely anyone has enough money to lead a comfortable life, which is why in our country people often see their happiness in money. Despite this, it is worth remembering that the proverb "Money does not bring happiness" is certainly at least a grain of truth.

What is money inflation?

Each of us has heard about inflation, but what is it really? It is said that excessive and unstable inflation increases financial uncertainty and making the right decisions, and may also be the reason for the decrease in the value of possessed assets.

Inflation is simply a drop in the value of money over time. In other words, sooner or later all the prices are more expensive, and for 1000 zlotys 10 years ago you could buy much more goods and services than today.

However, it is assumed that inflation is a positive phenomenon as long as it is low, stable and predictable, because in this case people can make sound financial decisions. The problem only appears when inflation is negative and so-called deflation or when inflation is excessive and unpredictable and people cannot be sure of the consequences of their financial decisions. Fortunately, inflation in Poland has been stable and low for years. It is worth knowing, however, how inflation affects our lives and, for example, if you have savings, it is better to keep them even in a deposit than at home in cash.

How is money produced?

Money is still produced on a massive scale by state institutions established for this purpose. In Poland, the Polish Security Printing Works is responsible for printing banknotes, which uses specialized and highly durable cotton material to make the money resistant and extremely difficult to counterfeit. Coins are minted in Polish Mints, and their production is also based on durable materials.

New banknotes with the highest nominal value so far, i.e. PLN 500, have been produced since 2017. Interestingly, many Polish citizens have not yet had the opportunity to see them live. This is because these banknotes are mainly held by banks as reserves, sooner or later, however, each of us will see such a banknote in circulation.

Will money be introduced in Poland under the Euro currency?

When discussing the subject of money in Poland, it is impossible not to mention the planned introduction of the Euro. What are the actual chances and when is it supposed to happen? What consequences will the introduction of the Euro have in the country on the Vistula?

In a sense, Poland agreed to adopt the single European currency by joining the European Union. At the same time, however, Poland is not obliged to adopt the Euro at any specific date, and in addition it is difficult to say that Poles want and seek to adopt the new currency.

It is also worth remembering that the new currency cannot be adopted overnight, because it requires appropriate preparatory measures, so in practice the Euro will not go to Poland before 2025.

The introduction of the Euro raises a number of controversies, and the new currency should bring us new opportunities as well as some problems. Among the advantages of introducing the European currency in Poland is that it can accelerate the equalization of Poles' earnings with residents of Western Europe. The introduction of universally recognized money in Europe should also strengthen Poland's position in the EU, and the risk of exchange rate fluctuations would disappear.

On the other hand, there is a lot of voices saying that the Polish economy is still too weak to be able to easily adopt the Euro, and in addition the Euro zone itself has had considerable problems for years. Therefore, it is difficult to state clearly what the future of money used in Poland will be, but at least for the next few years there should be no significant changes in this respect.

We understand that money is extremely important, but enjoying life is equally important. That is why you should have a proper saving plan. Learn more and learn our ways on how to save effectively and how to properly manage your money.