Meaning, Types, Uses and Sources of Money for Primary 1

Meaning, Types, Uses and Sources of Money

Performance Objectives

By the end of the lesson, students should be able to:

1. explain the meaning of money;
2. discuss the origin of money;
3. identify different types of money;
4. list the uses of money;
5. explain ways of acquiring money.

What Is Money?

Money is anything that people use to buy things and pay for services.

It helps people get what they need and want. Without money, it would be difficult to buy food, clothes, or pay for transport.

The Origin of Money

A long time ago, people did not use money. Instead, they exchanged goods directly. This was called trade by barter.

For example, a farmer with yams might exchange some yams for fish from a fisherman. This worked when both people wanted what the other person had.

However, trade by barter was often difficult. Sometimes, the farmer might have yams, but the fisherman did not want yams. Or, it was hard to divide some goods, like a cow, into smaller parts for exchange.

To solve these problems, people started using special items that everyone agreed were valuable. Early forms of money included cowrie shells, salt, and pieces of metal.

Over time, governments started making special paper and metal pieces that everyone could use to buy and sell things. This is how modern money, like the Naira in Nigeria, came to be.

Types of Money

In Nigeria, the money used is called Naira. The Naira comes in two main types:

1. Paper notes
2. Metal coins

Paper Notes

Paper notes are made of special paper. They come in different colours and have different numbers printed on them. These numbers show their value.

Examples of Nigerian paper notes include:

1. Five Naira (₦5) note
2. Ten Naira (₦10) note
3. Twenty Naira (₦20) note
4. Fifty Naira (₦50) note
5. One Hundred Naira (₦100) note
6. Two Hundred Naira (₦200) note
7. Five Hundred Naira (₦500) note
8. One Thousand Naira (₦1000) note

Observe the images of Nigerian paper notes below.

Metal Coins

Metal coins are small, round pieces of metal. They also have numbers printed on them to show their value. Coins are usually smaller in value than paper notes.

Examples of Nigerian metal coins include:

1. Fifty Kobo (50K) coin
2. One Naira (₦1) coin
3. Two Naira (₦2) coin

Observe the images of Nigerian metal coins below.

Uses of Money

Money is very useful in daily life. It helps people to do many things. The main uses of money include:

1. Buying Goods: Money is used to buy things people need and want. These things are called goods.

   Examples of goods that can be bought with money include:

   1. Food (like rice, beans, bread)
   2. Clothes (like uniforms, dresses, shirts)
   3. Books and pencils
   4. Toys and games

2. Paying for Services: Money is used to pay for work that other people do. This work is called a service.

   Examples of services that can be paid for with money include:

   1. Transport (paying for a bus or taxi ride)
   2. Haircut (paying a barber or hairdresser)
   3. School fees (paying for education)
   4. Electricity bills (paying for light and power)

3. Saving: People can keep money aside for future use. This is called saving. Saving money helps people buy bigger things later or have money for emergencies.

Ways of Acquiring Money

Acquiring money means getting money. People get money in different ways. Some common ways of acquiring money include:

1. Trading: This means selling goods to other people. When someone sells something, like fruits, vegetables, or clothes, they receive money in return.

   For example, a market seller trades their goods for money from customers.

2. Providing Service: This means doing work for others and getting paid for it. Many people earn money by offering their skills or labour.

   For example, a driver provides transport service and gets money. A teacher provides teaching service and gets money.

3. Investing: This means using money in a smart way to make more money in the future. For example, a parent might use some money to help a small business grow, hoping that the business will earn more money later.

Using Money as a Means of Exchange

Money is a means of exchange because it helps people swap money for goods or services. This is how things are bought.

How to Use Money to Buy a Snack

This activity shows how money is used to buy something simple, like a snack.

The required materials are:

1. Specimen Naira notes and coins (or real money, with adult supervision)
2. A small snack item (e.g., a biscuit, a small fruit)
3. A pretend shopkeeper

The procedure involves the following steps:

1. Decide what snack is wanted and how much it costs. For example, a biscuit might cost ₦20.
2. Hold the money needed to pay for the snack. If the biscuit costs ₦20, hold a ₦20 note or two ₦10 notes.
3. Go to the pretend shopkeeper and state what is wanted.
4. Give the money to the shopkeeper.
5. The shopkeeper will take the money and give the snack. If more money was given than the cost, the shopkeeper will give change back. For example, if a ₦50 note was given for a ₦20 biscuit, the shopkeeper will give ₦30 change.
6. Collect the snack and any change given.