What is the Value of Money?

The value of money can be defined many different ways by many different people. People assign value to things based on the worth or impact that object has upon their life. Most people in America value their cell phones more than sliced bread because they depend on it so much throughout their daily lives, whereas some children in third world countries would have a much higher value for bread because it is rare and sustaining. So for this example, value is measured by worth and is a matter of perception. The value of money may be literally determined by the government (a penny is worth a cent; if a bill displays the number 100, it is worth $100), but the value that each individual places on money is determinant of many factors. Such factors include socioeconomic status, financial stability, number of children in the family, employment, and even one's interests and preferences.

My mother, for example, LOVES to buy vases for decorations (though most end up in the garage), and would probably be willing to pay a nice sum of money for a beautiful hand-crafted, one-of-a-kind vase. I, however, would NOT. I buy cheap, and if I want a vase, I will go find myself a cheap vase to utilize. I am not interested in vases, like my mom is, and would therefore not pay as much money to procure a vase. But since she has a preference for beautiful decorations, she places more monetary value on them. Other factors in relation to this example include employment and financial stability. My mom has a job and a fairly steady income (as a flight attendant, she chooses when to work so her paycheck isn't always the same amount, but depends on how much she flies between paychecks), whereas I am a college student without a job and who is dependent on student loans to pay rent and buy food. So with less money to burn, I value $20 more than my mom values $20 because I am going to be more conscious about how much I can buy with that twenty bucks. Some value quantity over quality, and some value quality over quantity.

The value of money is also a matter of demand. As a business major, I have studied enough economics and marketing to know that if demand goes up for a particular good or service, the price for that product is going to rise as well. Business is all about making profits. Likewise, if the demand for a product decreases, the price too will decrease- and not always globally, but in certain areas. Peanut butter is really expensive in France because it is not as common there, but in America, peanut butter is its own separate food group and is a necessity for every household (except for people with peanut allergies- poor things). It is more common in the U.S. and is therefore cheaper. Another example is Rosetta Stone, which costs hundreds of dollars here, but which can be sold for $5 in some other country (mom has mentioned this a few times, I just can't remember which country it is).

Individual costs and prices of money also used to be a lot higher, and one could purchase a lot more with a dollar back then, versus a dollar today. I recently read something online that a college student posted about how tuition rates have drastically increased since the 1970s. The student posted on Reddit, "This is interesting. A credit hour in 1979 at MSU was 24.50, adjusted for inflation that is 79.23 in today dollars. One credit hour today costs 428.75." [[The rest of the article backed up these numbers and further expanded on the subject- if you're interested here's the link:  http://www.theatlantic.com/education/archive/2014/04/the-myth-of-working-your-way-through-college/359735/]]

So, in short, the value of money is an individual perspective that can be assigned to an object or service or person based on the worth that each individual places on that item. The monetary value of products can be labeled by companies, countries, or the government, but the value that each individual places on an object may determine the items they place in their lives and the things they avoid. Our individual perceptions of the value of money and the things we buy with it are essential in shaping the business world and in shaping ourselves.