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Financial Tip

If your child has a handle on using cash responsibly, get a debit card or a secured credit card with a low limit. Then pay the bill together.

Pyramid Power

As you teach your kids to appreciate each dollar they earn, save and spend during their lifetimes, sharing the history of the dollar itself might further add to their sense of appreciation.

Did you know, for example, that "dollar" refers to worth, not the printed bill? And why is our currency green? The Bureau of Engraving and Printing responds to this often-asked question by explaining that "patent green" ink was developed in the mid-1800s to help prevent counterfeiting, and it ultimately became the standard color.

The U.S. Treasury Department and the U.S. Department of State, the official keeper of the United States Seal, offer the following facts about the dollar bill's symbolism:

  • The front of the bill shows the Department of the Treasury seal, dated 1789. It features the scales of justice, a chevron with 13 stars representing the original 13 colonies and a key symbolizing national authority.

  • Before the Continental Congress adjourned on July 4, 1776, it appointed a committee of Benjamin Franklin, John Adams and Thomas Jefferson - three of the five drafters of the Declaration of Independence - to develop a seal. It took six years and two more committees and a total of 14 men to produce the final version.

  • On the back of the bill you'll see the official Great Seal of the United States that the final committee developed. There are two circles because the seal actually has two sides.
  • The uncapped pyramid signifies that the new country was in an unfinished state. In presenting the design, Secretary of Congress Charles Thomson said the pyramid represented "strength and duration." The Roman numerals on the base represent 1776.

  • The eye above the pyramid stands for the "divine eye of providence" watching over the nation. The Latin phrase "Novus ordo seclorum" means "A new order for the ages," and "Annuit coeptis" roughly translates as "He has approved our undertaking."

  • The eagle on the seal's other side was chosen because it is uniquely American. Grasped in its talons, the olive branch and arrows denote the country's power in peace and war. At the end of World War II in 1945, President Truman ordered that the eagle face toward the olive branch (peace) instead of the arrows.

  • The shield on the seal is unsupported, symbolizing that the country must stand on its own. "E pluribus unum" means "out of many, one." This was considered to be the motto of the United States until 1956 when Congress adopted "In God We Trust" as the official motto. Since 1957, both mottoes have appeared on dollar bills.

So next time you or your kids use a dollar bill, you can appreciate the more than two centuries of American history it represents. Who knows, you might even find that reflecting on the Founding Fathers' sacrifices will encourage your family to use its dollars more wisely!

Teachable Moments

To become knowledgeable about financial information, begin by understanding the industry terminology. Here are a few financial terms that appear regularly in business publications and financial documents.

  • Dow Jones Industrial Average (the Dow) - the oldest and most widely quoted stock market gauge. Consisting of a select group of 30 stocks, experts believe it represents the overall market at any moment in time.
  • S&P 500 - a stock market index containing the stocks of 500 Large-Cap corporations (corporations with a market capitalization of $5 billion or more), most of which are from the United States.
  • Share of Stock - represents a fraction of the total ownership of a corporation.
  • P/E Ratio (price to earnings ratio) - a measure of the price paid for a share relative to the annual income or profit earned by the firm per share.
  • Dividends* - earnings from corporate stock or credit union share accounts.
  • Liquidity* - the quality of an asset that permits it to be converted quickly into cash without loss of value. For example, a mutual fund is more liquid than real estate.

*Glossary terms reprinted from National Standards in K-12 Personal Finance Education; 3rd Edition, 2007 with permission from Jump$tart Coalition for Personal Financial Literacy.

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