When I want something two things come to mind: 1) how much does it cost and 2) how much will it cost me. Sometimes the answer to these two questions are the same, and sometimes they’re not. For instance, not too long ago my husband and I went to Washington D.C. for the weekend. Transportation and hotel accommodation cost about $460, but it cost us $0.00. This was because of a medium of exchange (which in this particular case, was my participation in a rewards program). According to InvestorWords.com a medium of exchange is “Any item that is widely accepted in exchange for the goods and services offered to consumers in a given market. One example of a medium of exchange is currency.”
To acquire the goods and services we want, in a way that is most beneficial to us, we must take stock of all the mediums of exchange.
The mediums of exchange include, but are not limited to:
• Currency/Money (the most popular and well known)
• Reward programs
• Gift certificates
• Your skills, talent and/or time (Here I am referring to bartering. It’s not “widely accepted,” but in certain situations it is accepted.)
I will dig into individual mediums in later posts, however, I want you to be aware of the existence of these “purchasing tools” now.