Money vs Wealth and Functions of Money

Wealth is real value: things that help people live better, such as food, housing, tools, skills, businesses, clean water, and energy. Money is a tool people use to trade goods and services, store value for the future, and compare prices. Money is not the same as wealth. Money is a system for exchanging and measuring wealth. Some things can be both money and wealth depending on how they are used. Money usually performs three functions: Store of value helps you save purchasing power over time. Medium of exchange helps you buy and sell without needing direct barter. Unit of account helps you set prices and compare value, for example, this costs $3 and that costs $12. When trust breaks in any of these functions, money works poorly. A money can work well for one function and poorly for another.