“Can I buy a magic sword?”

This is a question that seems straightforward,
but is actually fraught with follow-on implications that are not obvious. It is
also one that’s asked at some point in any D&D campaign. You might be
thinking, as GM, that you’re making a choice about the setting of your campaign (is this a high-magic or low-magic world,
a desert island, a major trade city, etc). While you are making this decision, you’re also deciding (perhaps without
knowing) what money is in this game. You’re
deciding whether your adventuring party will build castles or not, whether
they’ll hire armies or not, whether they’ll go adventuring or not, whether
they’ll be greedy or not, and whether they’ll care about rewards at all after
the fighter gets her hands on a set of Full Plate.

In my experience, money in RPGs is used for
one of six things: character power, narrative power, oxygen, skill, XP, or
nothing.

Money as Character Power

This paradigm is the one most familiar to
3.x veterans such as myself, and is the direct result of allowing magic items
to be purchased freely for money. This allows players to invest money in their
character’s powers and strengths in the same way they do with skills and feats.
There is a slightly different set of constraints on how money is spent than
skill points (which is to say, the party must find a city), and may be further
restrictions still (such as 3.x’s limitations on the most expensive items that
can be bought in each size of settlement), but at the end of the day, players
can pretty much buy whatever they have money for.

In essence, if a player can convert
currency into better stats, damage, armour, etc., then in your system, money is
character power and should be treated as such. The GM should keep a close eye
on how they hand out treasure and quest rewards, as too little or too much
money can easily result in difficulty balancing encounters. Third edition
D&D came with a table stipulating how much money each character should have
at each level (the (in)famous “Wealth by Level” table) and balanced
monster CR based off of this assumption. In my younger years, I GM’d several
campaigns in which I restricted purchase of magic items because of campaign setting
reasons (it was a low magic setting, or the party was far from civilization, or
whatever), and then was shocked as the party struggled against ethereal
monsters or monsters with damage reduction, yet with CR far below their level.
Additionally, such restrictions won’t affect all characters equally—a 3.5-era
sorcerer, for instance, can operate just fine despite absolute poverty, while a
fighter will really feel the lack of a level-appropriate magic sword. Monks,
despite not using weapons or armour, are ironically among the classes most dependent on magic items because of
their dependency on multiple ability scores.

Determining whether your system assumes
money as character power may not be immediately obvious, but as a GM, it is
crucial that you find out. D&D’s modern-era spinoff, D20 Modern, does not
use money as character power, as you can’t simply buy better and better guns as
you level up—once you’ve realized that the FN 5-7 pistol and the HK G11 rifle
are mathematically the best guns and you’ve bought them (which you can easily
do as a first-level character), you’re set for the rest of the campaign.
However, D20 Modern variant campaign settings, such as D20 Future and Urban
Arcana, do allow you to directly
convert money into character power, as the reintroduction of D&D-esque
magic items of Urban Arcana and the “build your own gear”
gadget-system of D20 Future allow unlimited wealth to be converted to unlimited
power.

What
to Watch as a GM: Ensure a steady trickle of
monetary rewards that increase as the players level, realize that players will
be increasingly antsy to reach town the more treasure they have, keep an eye on
any game-provided wealth-by-level suggestions, and be wary about player-driven
“get rich quick” schemes and item crafting systems. Be very cautious
about allowing a PC to borrow money from an in-world bank or other lender, as
they could quickly invest that money in magic items and destabilize the game
balance.

Advantages:
Combing through books to find perfect magic/sci-fi
items is very appealing to some players, and it allows the GM to dangle money
in front of his or her players to hook them on adventures.

Disadvantages:
Can lead to very hurt feelings (and huge game
imbalances) if a character is robbed/disarmed in–game, as it is functionally
equivalent to erasing a feat from their character sheet. Further, the game can
break down very quickly if there is a wealth disparity among the party, as
there are more than simple roleplaying repercussions to playing a
“rich” or “poor” character. Some players find this system
“video gamey,” and others feel that it overwhelmingly encourages
players to steal everything not nailed down.

Best
For: Combat-heavy games in which a
“build” is important, high magic/soft sci-fi settings.

Money as Narrative Power

When money sees its most use bribing
officials, hiring mercenary armies, building castles, or funding large-scale
operations of any kind, money in your system directly converts to
“narrative power.” Players can use cash to influence the game world
and the direction of the story, but not necessarily to deal more damage in
combat (or heal more, or buff more, or whatever). This is where D&D 5e tends
to get to after low levels (see “Crossing the Streams” for more on
this). Many gritty, film noir-esque stories rely on key characters being dangerously
in debt and are called to adventure by motivation to pay off said debt.
Depending on the details of the campaign world, however, Players might stop
caring about money entirely if it doesn’t directly relate to the plot or some
kind of scheme.

What
to Watch as a GM: If you come from a legacy of
“Money as Character Power” games, you might have to remind yourself
to loosen your grip if one or more characters seems to be accumulating
“too much” money. Just because money doesn’t have direct applications
in combat and adventuring doesn’t mean it isn’t an important game resource—be
sure to provide opportunities for players to use their money to solve problems,
or else they’ll quickly ignore it entirely.

Advantages:
Allows a host of narrative options restricted by
“Money as Character Power” games, such as managing businesses,
organizations, or fiefdoms. Allows a wealth disparity between party members
with only moderate issues. Additionally, allows stories involving borrowing and
lending money without breaking balance in half, and overall can feel quite
freeing.

Disadvantages:
Can still cause problems if one PC is notably
wealthier or poorer than the rest, depending on the players themselves, as they
might end up driving the story. Unless finances are baked into the plot, using
money as a reward is unlikely to garner much interest on behalf of the players.

Best
For: Gritty realism, power politics, games that
will eventually result in characters becoming lords/ladies/CEOs/etc.

Money as a Skill

In some ways, this is the exact opposite of
“Money as Character Power"—when money is treated in your system as a
skill, players have to sacrifice
combat power in exchange for wealth. For instance, in the Fate-based Dresden
Files RPG, if a player selects Resources to be one of their better skills, they
are consciously giving up choosing, say, Weapons or Fists as a good skill. In
such a system, a character’s wealth is abstracted, and largely unaffected by
major purchases or sales. Similarly, monetary quest rewards are pretty much off
the table unless similarly abstracted.

This system strongly encourages huge
disparities in wealth between party members, allowing rich and poor characters
to solve problems equally well, just in different ways.

Note that "Money as a Skill”
doesn’t just mean that purchases are handled by skill checks, but rather that
the wealth of a character is as core, internal, and untouchable as their other
core stats, like Strength, Agility, etc. D20 Modern uses a system similar to
skill checks to handle finances, but a character’s Wealth score fluctuates
hugely when they buy or sell things, so doesn’t entirely fit in this paradigm.

Sometimes these systems do away with money
altogether, such as the mecha rpg LANCER, which exists in a post-scarcity world
entirely without money. Equipment is earned by getting progressively better
“licenses,” which authorize PCs to replicate increasingly powerful
weapons and mecha shells.

What
to Watch as a GM: You’ll have to find ways to
motivate players without monetary rewards, and be sure to find opportunities to
reward players who invested in their “money” skill, either through
narrative or scenario design, just as you would ensure to place a few traps in
every dungeon for a rogue to disarm.

Advantages:
Allows (and, indeed, almost requires) large wealth
discrepancies between characters, and greatly reduces bookkeeping.

Disadvantages:
Tends to be highly abstract, which can lead to a
mismatch of expectations (such as if players start looting bodies to sell, with
absolutely no mechanical impact, or being unsure if “+5 wealth” is
middle-class or Bezos-class).

Best
For: Narrative games without much focus on
accumulating wealth and treasure, but in which money still matters.

Money as XP

This is the oldest of all old-school
approaches, and in many ways the logical extreme of “Money as Character
Power.” When money is used as XP, acquiring gold directly leads to
characters increasing in level. Sometimes this requires spending the money
(i.e., donations to charity, training, or spell research resulting in XP
gains), while other times, it only means acquiring the money (in which case,
you have to answer the question of what players are to do with all this
accumulated wealth after its primary purpose—giving them XP—has been achieved).
This approach has largely been left by the wayside, and many modern players
will discount it out of hand, but I’d encourage you to stop and think about it:
we already accept that fighting more powerful monsters and overcoming more difficult
challenges lead to greater XP and
greater material rewards, so why not cut out the middleman and just say the
material rewards are XP? One caveat
is that, even moreso than with “Money as Character Power,” this can
result in PCs doing anything to get
their hands on cold, hard cash—but, conversely, by removing (or downplaying)
combat XP, it can also result in encouraging peaceful or stealthy approaches to
solutions. This would lead into a whole conversation about when and how to give
out XP, and what behaviours this decision encourages around the tabletop, but
such a discussion is outside the scope of this essay.

This system works well for GMs that want
their players to be treasure-hungry, like in Money as Character Power, but
don’t like the inevitable proliferation of magic items that results.

As with “Money as Character
Power,” under such a paradigm, GM’s must keep a close eye on PC’s pocketbooks.
Taking away their treasure, either through in-game theft, a rust monster, or
similar, will lead to frustration and hard feelings. Similarly, anything that
lets players turn a profit without adventuring, such as item crafting or simply
by getting a day job, could destabilize the game unexpectedly—many systems specify
that only treasure found while
adventuring counts towards XP, though determining what counts as
“while adventuring” can be something of a headache (albeit not an
insurmountable one). Additionally, this system strongly discourages wealth
imbalances between PCs, as they directly
result in some PCs being higher level than others.

Given how out-of-style this is in tabletop
games, it’s perhaps surprising that several modern video game RPGs  fall into this category in the late game. In Skyrim, for example, after I’d bought
the best weapons and armour that could be found in shops, future resources went
into buying all the world’s iron and leather to grind up my Smithing skill
again and again, giving myself easy levels.

What
to Watch for as GM: Same as with “Money as
Character Power.”

Advantages:
Eliminates post-battle XP calculation entirely,
encourages players to avoid direct confrontation, and gives players a very
strong monetary motivation (which can also be a disadvantage) without resulting
in a high-magic world.

Disadvantages:
Can strike some players as unintuitive, and strongly
encourages desperate treasure-hunting (which can also be an advantage).

Best
For: Games involving treasure-hunting and
exploration.

Money as Oxygen

With Money as Oxygen, money becomes
something that players need a steady stream of just to survive. Maybe they’re
deeply in debt, have to make rent payments, have to maintain their equipment,
or just have to feed themselves. The reason for their regular thirst for wealth
might be narrative (rent, debt, etc.) or mechanical (equipment maintenance,
etc.) in nature. In Traveller, a
huge source of motivation for the party is just trying to keep ahead of mortgage
payments for your starship. Money becomes the same as food, water, and air—a
vital necessity that you simply always
need more of.

With Money as Oxygen, players constantly
have to eye their dwindling bank accounts and do cost-benefit calculations before
accepting a mission, or else disaster could strike. This is a very, very
different genre from “Money as Character Power” or even “Money
as Narrative Power,” as it rarely results in the party spending their money
on anything other than survival. Unless they really hit a gold mine, they won’t
use money to upgrade weapons or armour, or to buy land and power, because doing
so runs the risk of starvation/bankruptcy/etc.

This probably isn’t the paradigm to use for
most D&D-esque campaigns, as it can (and should) result in players actively
avoiding heroic archetypes—if survival depends on a paycheck; the crusade
against evil is someone else’s problem.

What
to Watch for as GM: This paradigm is
bookkeeping-heavy, so make sure the players understand that from the get-go.
Also, anyone expecting “Money as Character Power” might find
themselves frustrated by their ever-dwindling resources. Make sure you have a very good handle on the math of the
players’ survival (that is, exactly how
many gold pieces/dollars/credits they need to survive a week) or you might
accidentally underpay them and lead them to ruin. Not that this shouldn’t
happen; it just shouldn’t happen by
accident. If you accidentally give them too much money, feel free to
timeskip ahead several months until they’re broke again, or dangle another
moneysink in front of them, like a one-of-a-kind, now-or-never opportunity to
buy a shiny magic item or spaceship upgrade (dipping judiciously into Money as
Character Power).

Advantages:
Makes the players feel poor, desperate, and downtrodden.

Disadvantages: Both the players and the GM have to keep a very, very close eye on finances in order to
maintain tension. If paired with a mechanical system that doesn’t result in
substantial character progression from XP (such as skills, feats, etc.), then
players can feel stuck and lacking motivation.

Best
Used For: anything that can be accurately described
with the words “seedy underbelly.”

Money for Nothing

We’ve all played games in which money is
straight-up useless. In many Zelda games, for example, like the classic Ocarina of Time, monsters drop rupees
all through the game. In addition, there are secrets, hidden chests, and
puzzles that pay out rupee rewards as if
the game thinks they would make you happy. After the first hour of the
game, it becomes blindingly obvious that there’s no point to this money, as the
things you would buy (arrows, sticks, bombs) are just as freely dropped from
monsters and bushes. Many other video games hit this point after the early game
as well (like Diablo II, where
monsters continue to drop thousands and thousands of gold throughout the game,
but there’s nothing worthwhile to spend it on).

I personally can’t see any advantages to
this system, as I don’t think it’s chosen by design.

Crossing the Streams

Of course, few games fall strictly into one
of the above categories, and most aim to do two or even three, which can lead
to some common pitfalls. For example, the 3e splatbook the Stronghold Builder’s
Guide allowed players to spend tens of thousands, even hundreds of
thousands, of GP on elaborate castles and mansions. These was very cool, and
the rulebook is one of my favourites from the edition… but I’ve never seen it
used in actual play, because any player who did so would find themselves
handicapped for the remainder of the campaign, as they hadn’t invested their
gold in magic items, as the system requires
you to. (Again: the math of monster design in 3.x assumes and requires that
player characters gain magic items at a set rate).  

Some of the paradigms play nicer with each
other than others. For example, many variants of “Money as XP”
practically require a secondary output for money. Unless the XP is only gained
by spending the money, all of that accumulated loot has to go somewhere—typically either into magic
items (Money as Character Power) or into strongholds (Money as Narrative
Power). Games that have large-scale battle rules (which, I’ve been told, ACKS
does, though I haven’t played it firsthand) blur the lines between Narrative
and Player power, because the castles and hirelings a player buys actually do something, mechanically, though they
typically don’t help you in an actual dungeon. “Money as Oxygen,”
similarly, may require temporarily dipping into another paradigm to bleed off
surplus money from the party to keep them permanently poor (something Traveller does gracefully by allowing
incredibly-expensive spaceship upgrades).

The Full Plate Threshold

The Full Plate Threshold: once the players have
bought the most expensive item available to them, the nature of money
permanently changes.

One very common dynamic is for games to
have Money as Character Power in early levels, and transition to another
paradigm (or fall into Money for Nothing) at later levels. This is particularly
common in video game RPGs, where after the early game, nothing anyone sells in
stores is of any value whatsoever (or if they do, the price is trivial), yet
despite this, monsters continue to drop
thousands upon thousands of gold. If these games have a multiplayer
aspect, players usually settle on a rare item as the de facto “currency” for trades.

This is also the dynamic that results when
the sale of magic items in D&D-esque games is restricted, as in early
levels, players save up to buy half-plate to replace their breastplates,
warhorses to replace their feet, composite bows to replace their shortbows, and
so-on. Once the most expensive upgrade has been bought (in D&D, the last
character to make this transition is typically the fighter, as the best mundane
armour available is a steep 1,500 GP in 3.x and 5e—a friend of mine dubbed this
the “Full Plate Threshold” after my 5e paladin bought full plate, and we all suddenly stopped caring
about gold), money is no longer convertible to Character Power. At this point,
which can happen between level 3 and 7 depending on character class, system, and GM
generosity, the nature of money in the campaign will change. This could result in the widening of scope in the
campaign, as players invest in land, armies, and castles, or it could result in
money piling up like in Diablo or Final Fantasy, totally meaninglessly. Similarly,
many campaigns that start with “Money as Oxygen” can escalate into
“Money as Narrative Power” as players finally hit the jackpot, and no
longer need to worry about maintenance/mortgages/etc.

As a GM, handling this transition can be
tricky. If it sneaks up on you without realizing (many 5e D&D GMs might not
know (because they weren’t told), for instance, that the nature of money
changes dramatically the second
someone buys full plate), they might suddenly find their players disinterested
and bored around the table even though seemingly nothing else has changed. Their adventures are just as gripping, their monsters just as scary, their dungeons just as unique… but the players seem to be just going through the motions If your
system or campaign doesn’t have an endless supply of increasingly-expensive
bits and baubles for players to buy, you’re going to have to manage this
transition, whether you want it or not.

Wrapping Up

There is no objective “right” or
“wrong” way to handle money in an RPG, but some methods definitely
work better for certain genres than others, as changing the “rules”
of money in your campaign will massively change the feel and pace of the game.
On the same note, be careful of follow-on effects from changing the rules:
simply saying “magic items can’t be bought,” without making any other
changes, will lead 3.x campaigns into a series of very predictable roadblocks (weakening
martial characters, unevenly and unpredictably increasing encounter difficulty,
and potentially eliminating motivation to go on some adventures) that you have
to have solutions to. Similarly, adding a “magic item store” to a
system not initially designed for it, such as D20 Modern, can lead to massive
imbalance and weird behaviour. For instance, due to bizarre math, even
relatively powerful magic daggers fall below the threshold at which rich
characters lose wealth points in that system, making them literally free, while buying an unenchanted, off-the-shelf AK-47 (which
is just above that same threshold) permanently
drops the wealth bonus of any character. This leads to the system incentivizing
any problem that can be solved with
thousands of +3 Daggers being solved with thousands of +3 Daggers in a way that neither GMs nor
(I assume) game designers intended.

These incentives matter. If a game penalizes one option and incentivizes another,
that second option is just going to be taken more often. Maybe a lot more often. If you can align your
campaign’s incentives with desired behaviour for your players, you’ll save a
lot of headache, frustration, and counter-intuitive behaviour for everyone involved.