What Does K Mean in Money and Why Do We Use Abbreviations?
Anyone who has ever come across a business article dealing with numbers and larger sums has certainly noticed the use of the letter “K” immediately after a number and has asked the question of what does “K” mean in money. Intuitively, many people can figure out the fact that it is a sum of money, given the currency sign placed in front of it. But some may wonder what “K” stands for and why it is used in such a manner. It goes without saying that this is not the only abbreviation in the dynamic business world, but we will get to why we use them in the last part of the article. We will see exactly why this is one of the most popular letters in finance.
So, what does K mean in money?
In order to answer this question we need to take a step back and to look to the Ancient Greeks for answers. Even today we still use many of the systems set in place by our ancestors. In this particular case, K stands for the Greek word for the number 1000, “chilioi” or “kulioi”. Some historians argue that this is a rough interpretation and it is funny to think that we associate such a round number to a term the Greeks may have used to refer to an uncertain sum, even to several thousands.
How did we come to use the abbreviation?
Keeping this in mind, we fast forward in time until we get to the years following the French Revolution, and to a time when some of our most important systems of measurement was being set in place. Therefore, when the metric system was established in the 18th century, French scientists set off by establishing the central units to which they added suffixes which defined an increase or a decrease in quantity or lenght.
To make things easier to manage, these suffixes meant multiples of ten going both up and down. The positive numbers were represented by the first letter of the Greek words for the respective numbers. Since those numbers were already being used for positive values, the Latin words for the same numbers were used to represent the negative values. Therefore, when it came to 1000 grams or 1000 meters, “Kilo” was used, along with the abbreviation, “K”. The opposite of Kilometer (1 KM=1000 meters) was millimeter (1 mm = 0.001 meters).
Consequently, the abbreviation started being used in mathematics as well, Kilo meaning 103, meaning 1000. The abbreviation proved to be useful and the metric system suffered some small changes through the years, but has remained broadly the same.
Still a bit confused?
The use of “K” as an abbreviation comes natural to most of the people who use the metric system on a regular basis. It is intuitive to them since they have always expressed the value of 1000 this way and they are less likely to ask what does K mean in money compared to people who are not familiar with the system.
Why do we use the term in finances?
Since you are no longer asking yourself what does K mean for money, we can move on to the next issue. The world of business is very, very dynamic, one of the first to change with the times, to adapt, to become modern and to set the trends. So, why do we use such an old abbreviation in such a fast moving, money-oriented system? The answer is simpler than you think.
When it comes to money, it all boils down to efficiency and clarity. You may have heard the term when people talk about salaries, about sums negotiated, about round sums, most of all. This means that communication in the industry must be fast, to the point. We have PowerPoint presentations for painting a picture of how a company did in a fiscal year, we have charts that best express evolution and we have abbreviations for practically any program used, method applied, department involved. What was the only thing which stayed the same? Numbers did.
Faced with the option of rounding numbers in charts, we moved naturally to representing thousands by using the “K” abbreviation which, somehow worked even in countries where the metric system was not in place. It became used by more and more people, it was given a contextual understanding and it simply evolved, from informal company talk to the types of communication which mimicked popular speech in order to make the voice of the author more relatable.
Why do we use abbreviations at all?
Think about it this way: would you rather read a business article with full numbers presented to the last decimal, with full length terms for everything, eventually followed by an explanation of it, or would you rather have the cold facts? “K” used as a number abbreviation when it comes to money is only one of the many used in one article alone. It may be difficult to read by someone who is new to the industry, but it forces people’s minds to work faster by replacing full words with symbols.
For publishing purposes, since numbers take up a lot of characters, it can be easily understood why an author with limited space can choose to save by using abbreviations so as to make more room for conclusions and personal opinions, which are the main reasons why we read such articles.
Once we have answered the question of what does K mean in money, let us add that psychologically speaking, the use of “K” instead of thousand can make people expecting to see three zeros do a double take. Although the three zeros at the end makes us feel better about four-digit numbers (when we are cashing in mainly!), an abbreviation in this sense may not have the same results, even if the sum is the same.
Bottom line is that the use of any kind of abbreviation is comfortable, helps us get the right idea quickly and it delivers the same message. A good thing about it is that you only have to learn it once and get all of the above benefits from then on.
Thanks for reading and wait the next topics in “Help Your Life” blog.
We have more helpful tips right here: