A History of Debt (and Money)

Debt is literally an ever-growing problem for both everyday Americans and the greater economy. In fact, the national debt has never been higher, sitting around $21 trillion dollars

 But, oddly enough, the actual history of debt is still something not commonly known in most circles. Let’s take a trip back in time, see where the very idea of debt—and money, for that matter—came from, and how all that contributed to where we are now with it.

Let’s Talk Money, First

Money has been a quintessential part of human history for nearly three millennia, taking many forms and currencies along the way. While it’s exact origins are still argued, most historians agree that money began as a way of bartering in early societies along the Fertile Crescent.

 Egyptians, for example, had a certain “values” associated with things like cows, grains, clay pots, and things that the everyday man or woman needed. Surpluses of these goods would be traded based on their value, thus creating the first idea of “money.”

 However, it wasn’t until 600 BC when the first “official currency was created by King Alyattes of what’s known as modern-day Turkey. After that, coin currency became commonplace in many “westernized” parts of the Old World, with the Roman Empire creating perhaps the most advanced, well-studied coin currencies of the ancient world.

Then, around 1250 AD, paper money was introduced by the Chinese as a prominent form of currency. Even though paper money took a few (hundred) years to catch on globally, it soon became the most prevalent form of currency in civilizations across the world. Despite the fact that most modern-day countries are actually more credit-based than cash-based, paper money still has a place, despite talks of cryptocurrencies becoming the next big thing in global currencies.

Money Became Popular—and so did Debt

As soon as money because a constant in society, so did debt. As early as 3500 BC, traders in ancient Mesopotamia wrote debts, inscribing them on clay tablets that had the borrower’s seal or signature on it. Much like today, those early loans also carried interest, which the borrowers had to pay in full.

As the idea of debt evolved throughout human history, so did the legislation around it. In the 18th century BC, the Code of Hammurabi in Babylon—which was part of Mesopotamia—recorded the first observed laws around both debt and credit. One law made it mandatory that for a loan to be valid, it needed a written contract and witness to its signing.

The Ancient Romans even had their own version of Wall Street, known as the Forum, which kept a list of delinquent debtors, much like today’s credit ratings. Fun fact: In 1841, Mercantile Agency became the first credit reporting company in the United States, which put forth the first-of-its-kind system to track and rate the creditworthiness of businesses and consumers.

Fast forward over 160-plus years, and debt is still very much a part of modern-day life. Actually, it’s becoming a growing part of our lives, as well; consumer debt has been on a steady increase since the 1900s. Nowadays, it’s not common for any single individual to carry about $70,000 of accrued debt.

Here’s How to Send Your Debt Back to the Stone Age

Even though many Americans are straddled with debt, that doesn’t mean there aren’t ways out those money holes. Here are a few ways to get your head above water if you’re drowning in debt:

• Create a concise, constrained weekly and monthly budget to stay on track with your spending; consider using the envelope system
• Consolidate your debts, especially those that are acquiring a high interest
• Don’t fall prey to spending too much during the holiday season
• Embrace the 50/30/20 rule for spending and saving
• Downsize your current living situations, selling things you don’t need and perhaps moving into a smaller space; this will give you extra funds to help pay off your debts

Our Thoughts?

At ZayZoon, we have a pretty simple mantra when it comes to debt. Just don’t do it. Unless you are consolidating existing debt and lowering your overall spend, debt is a no-no. That’s why we created our On-Demand Wage product, to help employees get ahead of sudden expenses, protecting their sense of financial wellness and staying clear of unnecessary debts. Through partnerships with payroll and employers, ZayZoon gives employees access to their earned wages, well before payday, so they can avoid payday loans, overdraft fees, you name it.

To see how ZayZoon can help you or your employer get access to on-demand pay, click here for more information.