When 5 Cents is worth more than 5 Cents

When 5 Cents is worth more than 5 Cents
Helping children learn about money

Parents are always running into a brick wall when it comes to the subject of money and children, I mean teaching children the value of a dollar that is. It’s one of the reasons I started my blog: Money and Kids.

One hot topics is on Allowances.
Parents are tossed between giving a child an allowance, fearful of having a child believe money grows on trees or having the child earn his/her allowance which seems unfair to child and others who believe in the policy that we are a family of citizens and depend on one another to survive, therefore we should not pay our children to do what is already expected of them as part of the family [ chores ].

Whether you want to have your child earn his allowance or give it to them freely does not, in my opinion, really teach a child the value of money.

When is 5 cents worth more than 5 cents?

In order to teach a child [ for that matter most adults ] about money, you have to understand money. Many people quote the bible in saying: "My people suffer for lack of knowledge." But many of those same people who promote study and education - learn little to nothing about money.

children allowanceHow can you expect to teach a child about money by simply making them work? All your doing is training them to be good employees for the rest of their lives. And if you try to teach them how to budget, how to live beneath their means - what does that say about you, all your unfulfilled dreams and wants? So if you give them allowance [ money ] free or if they earned it - what did you really teach them?

Open your mind to More than what you see
Here is a tip to help teach your child to grasp some knowledge and understanding about money.
There are a lot of things we have to teach our children about money. How to make it, what it is really worth, what happens to money, how to manage money and best of all - how to make money work for you.

But lets start with this: When is 5 cent worth more than 5 cents?

Find yourself a nickel with a date of 1964 or later [ sometimes they are hard to come by, and there is a reason why ].

Then sit your child down and ask them which would they prefer: would they prefer to have the nickel or a quarter?
** Chances are all children with the basic knowledge of money will choose the higher "face" value money

Then ask them why they would prefer to have the quarter verses the nickel?
** Normally they will say that the nickel is worth less than the quarter.

Then take the time to explain to them why you would prefer the “Nickel” over the quarter.

Why would you choose the nickel over the quarter?

children and moneyThe reason why you would chose the nickel over the quarter is because in truth the nickel is worth way more than the quarter. This should start the jaw flapping and questions flying.

Answer: In simple terms when coins were originally made they were made from “GOLD” or “SILVER”. Money was not the paper we have today and money was not the coin - money was based on the amount of silver or gold and the weight as it was related to it’s value in gold and silver.

So after 1964 coins were no longer made of precious metals like gold and silver but of copper, nickel-plate and other non-value metals. So if I took this 1964 [ or later date ] nickel to the bank, they would say I have a nickel, only 5 cents. But if I took this 1964 or later dated nickel to be sold as silver, I would be told it is worth 97 cents - almost a dollars [ as quoted in silver prices during December 2009 ].

1942 - 1945 Nickel / silver value 0.97 cents
1946 - 1964 Roosevelt Dime / silver value $1.25
1932 - 1964 Quarter / silver value $3.12
1948 - 1963 half dollar / silver value $6.25

I don’t know about your kids, but when I explained this to my kids, their idea of money changed, the way they treated coin changed. They went for days first looking at the date on coins before they ever put it away in a piggy bank or to buy something at the store. They realized that money is not just money, that there is more to it. I believe that is a good lesson to start with. Plus, we now are storing our 1964 and later dated silver coins in a jar as Silver and not as coin.

* Since the dollar is debase and losing value, silver helps fight inflation and increases in value.

Below I have included my resources and I believe it will help you to better understand what I wrote about above so you can use it to help your children learn the true meaning and value of money.

90% silver cionage

Traditionally, all United States coins have been dated in the year of their production. This policy was interrupted, though, because of the coin shortage and the speculation in rolls and bags of coins that took place in 1964. As a result, Congress passed legislation so that after the calendar year 1964 coinage was produced, the United States Mint could still use the 1964 date. Starting in 1965, therefore, all denominations of United States coins continued to be struck with the 1964 date.

When the Coinage Act of 1965 was passed, it became mandatory that the Mint continue to use the 1964 date on all 90 percent silver coins (half-dollar coins, quarter-dollar coins, and 10-cent coins). Therefore, all of the 90 percent silver coins that the Mint manufactured in 1964, 1965, and 1966 bears the date 1964. The last of the 90 percent silver quarter-dollar coins was struck in January 1966, the last of these 10-cent coins was struck in February 1966, and the last of these half-dollar coins was struck in April 1966. The Coinage Act of 1965 also made it mandatory that the clad coins be dated not earlier than 1965. Therefore, all of the clad coins actually manufactured in 1965 bear the 1965 date. All of the clad coins made through July 31, 1966, bear the 1965 date. The first clad 10-cent coin was struck in December 1965, the first clad quarter-dollar coin was struck in August 1965 and the first clad half-dollar coin was struck in December 1965. In December 1965, the decision was made to change the 1964 date on the five-cent coins and the one-cent coins to 1965, as one step in catching up on normal coin dating. From December 1965 through July 31, 1966, all one-cent coins and five-cent coins were struck with the 1965 date.


The Mystery of Banking

How debasement profits the State can be seen from a hypothetical case: Say the rur, the currency of the mythical kingdom of Ruritania, is worth 20 grams of gold. A new king now ascends the throne, and, being chronically short of money, decides to take the debasement route to the acquisition of wealth. He announces a mammoth call-in of all the old gold coins of the realm, each now dirty with wear and with the picture of the previous king stamped on its face. In return he will supply brand new coins with his face stamped on them, and will return the same number of rurs paid in. Someone presenting 100 rurs in old coins will receive 100 rurs in the new.

Seemingly a bargain! Except for a slight hitch: During the course of this recoinage, the king changes the definition of the rur from 20 to 16 grams. He then pockets the extra 20 percent of gold, minting the gold for his own use and pouring the coins into circulation for his own expenses. In short, the number of grams of gold in the society remains the same, but since people are now accustomed to use the name rather than the weight in their money accounts and prices, the number of rurs will have increased by 20 percent. The money supply in rurs, therefore, has gone up by 20 percent, and, as we shall see later on, this will drive up prices in the economy in terms of rurs. Debasement, then, is the arbitrary redefining and lightening of the currency so as to add to the coffers
of the State.6

Money: Its Importance and Origins 11
6This enormous charge for recoinage is called “seigniorage,” payment to the seignieur or sovereign, the monopoly minter of coins.

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