Star InactiveStar InactiveStar InactiveStar InactiveStar Inactive

Finance management has a lot of moving parts. Both personal and business financing decisions involve planning, organizing, and monitoring financial resources in order to stay financially healthy. Finance management involves allocating money coming in and money going out in a variety of ways. At its core, finance management was similar in the 18th century. However, currency, banking, and taxes worked differently. Each one affected financial careers and personal financing in some way. Though the financial sector and overall economy is multifarious, it’s an evolving world born of its simplistic roots. 


Asset management has been around in one way or another for as long as people have been around. However, as assets change, so does the management of those assets. By the 18th century, banking and paper money were beginning to become the norm as gold and silver became difficult to obtain. A person’s paper money was backed by assets in gold, silver, or land — something that was more abundant. Colonial governments created land offices to issue paper money with land as collateral. People could take out loans and circulate their land notes as currency in the local economy. However, trade was still a popular form of currency and many people traded goods and services in tandem with notes backed by assets.


The 18th century marked the beginning of modern day banking in England. Some small governments were able to run on interest paid on loans to land offices. If people didn’t pay debts, their silver or gold was used to pay them, or their property was auctioned off. The check and the banknote were created, and banks took on services previously offered by merchants and goldsmiths. Finance management became an activity between a citizen and the bank, not just between them and those they traded with. As finance management became intertwined with institutions, problems arose with counterfeit money and inflation due to war. However, as modern day banking began to evolve, so did finance management.


Taxes were largely problematic at the beginning of British rule and in the early United States. Taxes were not regulated and the public had little say on how their taxes were taken from them and what was done with the money. Often, the money went right into the pockets of those in power. This made finance management difficult when taxation and tariffs were unpredictable. Not paying them could be punishable by death. There’s a long, well-known history on the perception of taxes and how they affected history at this time. The government had a big say over the finances of the people, but the people didn’t have a say over their own tax payments. In terms of taxes and their place in finance management, the sentiment is similar.

Finance Careers

Today there are careers in finance management that span between the financial sectors in financial reporting, tax accounting, corporate finance, etc. In the 18th century, when banking and financial careers were growing, finance specialties weren’t available. If a person worked in finance, they did it all. Though these tasks in the financial world were much more simplistic than they are now, each banker or broker handled all aspects of finance. Bookkeeping involved invoicing and supplying receipts while making detailed notes of all accounts and trades. Those who had a finance career in the 18th century were wealthy enough to receive an education and was often in a higher ranking social class. Not only did a finance career mean you had an education, but it also meant you had a future in a lucrative field.  

Personal Financing

Finance management has evolved a lot for finance careers and the overall economy, but it’s also evolved a lot in terms of personal finance. In the same way that bankers would keep detailed ledgers on credits and debits, so would a household. Household expenses may include things like candles, butter, and haberdashery (small sewing needs). Today we budget for utilities, groceries, and new clothes. While these days we have things like the child tax credit, created to offset the risings cost of raising children, there were no such tax credits in the 1700s. Instead, it was even more important to budget for a woman’s pregnancies and child-rearing. A household would budget for hard assets, like land and silver, but also trade-worthy assets like goods and services.  

Final Thoughts

Finance management was in a state of evolution in the 18th century. Modern banking was gaining its footing and an established currency system was on its way. Taxation was causing problems, but it held an important place in finance management, regardless. As modern banking became established, so did financial careers and education. Personal finance and budgeting adapted with each financial change. Just like everything else, evolution happens as the world changes. Finance management is no different and currency, banking, taxation, careers, and personal finance will evolve from now just as it did from the 18th century to today.


About the Author:

Frankie Wallace contributes to a wide variety of blogs and writes about many different topics, including politics and the environment. Wallace currently resides in Boise, Idaho and is a recent graduate of the University of Montana.