Functions of Money
Money has many uses that was usually take for granted. We can realize that its wide use has profound reasons.
Medium Exchange. A system of barter means that we would have to find people willing to trade their goods for the goods we have. There has to be a "double coincidence of wants" for a barter system to succeed. That is, an economics teacher would have to find a food producer or clothing seller willing to trade their goods for economics lesson. A barter system is difficult, and the invention of money made transactions much easier. An economics teacher can simply pay them for their goods rather than exchanging a lesson for their food and clothing goods.
Standard of Value. Money also sets the prices of everything into a common measure. Without money, goods would have to be valued according to every other good. Let us assume that there were three goods in the economy: pork, mangoes and bibingka. What quantity of pork would be equivalent to one mango and one bibingka? And how much bibingka would be worth one mango and one unit of pork? The same applies to mangoes. That is, each good would have to be valued in terms of the other two goods. If there were thousands of goods in the economy, that would mean thousands of prices to value each good according to the other goods.
Standard of Deferred Payments. Business borrow money and pay their loans back inthe future. Money is never out of season. Rather than using it now, a person can spend his money in the future, and it will still be accepted as a form of payment. Even if inflation may decrease its value, it's still accepted as a form of payment.
Reserve Value. Because of money, the value of goods and services is preserved. Without money, goods would have to be consumed so they don't lose their value. Money allows certain goods to be kept over time and still retain their value. With perishable goods, however, like food, their value decreases as they lose their quality.