Boost Your Kid’s Financial Literacy With Video Games

As evidenced by the near-monthly blog posts I write on the subject, I spend a lot of time and effort worrying about my child’s relationship with money.

I spend nearly as much time and effort on her financial literacy as she does on… video games.

Little Bit loves her video games, and she spends as much time as the charge on her Kindle and I will allow orchestrating singing monsters, slinging Angry Birds and catching Pokemon.

So I’ve asked myself how can I use what she loves to develop the skills I want her to have? Can I boost her financial literacy with video games?

I think in some ways, she’s doing this on her own. My job is just to make sure those lessons stick by talking her through the lessons she’s learning.  

With a little effort, though, parents can do a lot to enhance a child’s financial literacy with video games. It just takes some attention, some conversation, and some ground rules.

Know What Your Kid is Playing

There are some games that explicitly teach your kid about money, and if your kid likes those, terrific. But, I’ve found that there’s a lot I can do to boost Little Bit’s financial literacy with the games she picks out and plays on her own. It’s just a matter of knowing what she’s playing and looking for the lessons i can apply.

And that means listening, even when listening can be a chore.

It’s really easy to disengage from your child’s chatter about video games. They are discussing virtual worlds with arcane rules and it may seem like it has absolutely nothing to do with your life.

Maybe not, but that game he can’t stop talking about must be pretty important to your child. You probably need to make an effort to at least look at it. Better yet, play for a minute or two. (He’ll probably be glad to tutor you through the basics.)

If you don’t know what your child is playing, there will be no way for you to discuss it with your child to improve their financial literacy. That game is an opportunity for you to connect with your child with something she loves and connect it to real life. So listen, play and share.

Say No To In-App Purchases

The number one rule to improve your kid’s financial literacy with video games is “No in app purchases.”

Most of the games Little Bit plays are free, but as I’ve already pointed out, free games can get expensive. All it takes is a few in-app purchases and soon you’ve spent $5, $10, or even $100 to add in-game currency, speed up a few quests, or unlock premium content.

In other words, to get the good stuff and get it NOW!

Despite much pleading, cajoling, and asserting that “It’s my money!,” we do not allow her to make in app purchases. (And we also protect our accounts so she can’t buy without our permission and participation.)

Now, her dad and I have come by this decision from different angles. Jon will play an occasional video game, but it’s never been his thing. His stance is “That costs real money. We don’t use real money for pretend things.”

I game, though. I love my Japanese RPGs and puzzle games, so I tend to sympathize with Little Bit’s desire for cooler game stuff. However, because I’m a gamer, I also see that not making in-app purchases forces her to work for what she wants, accumulate resources and choose how to spend her in-game assets. 

Want to spend game money to speed things up? You can do that, but it will cut off your ability to purchase an upgrade later. Far better to wait, game hard and save for better stuff later.

That’s a lesson that only works if your child doesn’t have the ability to circumvent the game by adding outside resources. If you make your child “earn” their game progress, they learn to save and prioritize their resources. 

Make Them Save

Little Bit’s recently started saying she wants a Wii U or a 3DS.

While she’s saved as much as $90, a console game system is a bit of a reach for her. New ones tend to run $200 or more.

I’m telling her to go for it. If she can save the money for the system, her dad and I will buy her 2 games.

Considering how expensive those games are, that’s a pretty good deal. Video game consoles and console games cost a lot more than Barbie Dolls and Tonka trucks, whether the games are made by Nintendo, Sony or Microsoft.

I think it’s a great thing for my daughter to set and go for a big savings goal. Far better for her to save and use her allowance for bigger and better stuff than to trickle money out on cheap items that entertain her for an hour at most. And I won’t buy her the console (though if she gets close by Christmas, Santa might chip in a gift card to help her reach her goal.) Once she gets her initial 2 games, she’ll have to save for more.

If your kid wants expensive games, use the opportunity to make them save their allowance, earn some extra dollars, or sell some of their stuff to fund those wants. 

Boost Your Kid's Financial Literacy With Video Games

Game Lessons to Point Out

While you can probably teach financial literacy to your kid with any video game, some games are better suited than others to the task and some lessons are easier to find. For instance, my daughter runs out of energy on Bad Piggies pretty fast, so we can talk about delayed gratification:

“No. I’m not spending $2.99 so you can play the game for 5 more minutes today. Go play something else for a couple of hours and give your energy time to recharge.”‘

And games that teach delayed gratification or making (and living with) choices about  what to do with game money are easy to find. Fortunately, those are two pretty important lessons that need to be covered in detail and in Little Bit’s case, on a regular basis (I really want them to sink in!)

But Little Bit also plays Animal Crossing on my her Nintendo DS, a simulation game that has all the lessons you could expect of living in a town full of cute and furry animals to provide. So she gets the joy of paying off a mortgage, selling items from virtual dumpster diving, and playing the stalk market (You can clean up if you sell those turnips at the right time.)

Games that require some strategic planning generally have a lot of economic lessons to teach. Simulations, war games and role playing games are all particularly good for this. Want to build an army? You better build up the resources to feed and supply it first. Want to build up resources for an epic quest? What do you have that you can sell? Should you sell it to a vendor, or is there an in-game auction? What should you be spending money on to advance? What’s a waste?

There are a wealth of lessons to learn.

Improving Financial Literacy With Video Games

Play is a child’s work, and children learn valuable lessons through play that they don’t even know they are learning. 

And you just thought that was about Legos and baby dolls, sharing and taking turns and developing fine muscle control. Those preschool lessons are important, but play doesn’t stop at preschool.  As kids get older more and more of that play becomes digital. Kids between 8-12 years old average 13 hours a week on video games. 

That’s an awful lot of time.

If your child plays video games, it’s far better to make the most of them by looking for what lessons you can out of it. Engage with your child, participate, and bring out those financial literacy and other life lessons.

What are your views on the benefits and drawbacks of video games? Have you thought about how you can improve your child’s financial literacy with video games?

*Part of Financially Savvy Saturdays on brokeGIRLrich. *< and Vickie’s Kitchen and Garden. *

Fun Money Mom

28 thoughts on “Boost Your Kid’s Financial Literacy With Video Games

  1. When I first read the title I didn’t think about the games itself about teaching the lesson but the transaction of buying and selling video games. All three of my children are video game fans. I play a bit myself. We have used selling of old or unused games to raise money for new games or systems. My youngest son sold a bunch of his angry bird plush toys to fund a purchase a new Wii U system. We have used e-bay, Gamestop and yard sales to do so too. All great ways to teach kids about money.
    Brian @ Debt Discipline recently posted…Tips to Help You Get Out of DebtMy Profile

    • I think kids can learn a lot from getting the games if they have to do at least some of it themselves, because the systems and new games are so expensive. I think it’s great that your son raised the money for a Wii U. If wanting the games gets a kid hustling, saving and bargain hunting, they have learned some good lessons.

  2. This is a really cool article! I like that you looked at the economics surrounding the game (and purchasing the game) and the lessons that you can learn from playing the game. I found that I learned a lot of life lessons from games growing up. I think the largest benefit has been to my problem-solving abilities and ability to think and adjust on the fly, but I can definitely see where finance concepts would come into play, as well.
    Matt @ Optimize Your Life recently posted…How Much Does Happiness Really Cost?My Profile

    • I also think gaming is teaching my kid to live with and learn from her failures. My daughter gets so frustrated, but then she goes back and succeeds. No one likes to lose, but no one wins all the time. Great thoughts on other benefits, Matt.

  3. Wow, that is a lot of time playing video games. Video games and consoles like Nintendo, Sega and Playstation were all popular as I was growing up. My parents didn’t have a problem with me playing them, but they didn’t allow me to have a console myself…meaning I can only play them at friends house basically. Looking back on it now, I sort of appreciate that because it forced me to be outside more.

    Granted, times continue to change and evolve and video games are everywhere…the phone etc. So I think that is great you’ve used them to incorporate lessons and engage with them. We’ll have to give this thought as our little one continues to age.
    The Green Swan recently posted…The Frugal MillionaireMy Profile

    • I’ve found that with the proliferation of cellphone and tablet games, kids are playing video games much earlier and more often than they used to when they needed a dedicated console or computer. I’m a little surprised that it hasn’t come up for you yet, even though your kid is only 2, because so many parents start out adding a few video games on their phones to keep their little ones busy in waiting situations.

      Anyway, if the child is going to do something, might as well make the most of it!

  4. I’ve never gotten the appeal of video games, but my wife used to be an avid gamer. As I understand it, some of the more complex games have whole economies built in, so lessons in making money, buying and selling, wants vs. needs, and saving money should be easy enough to find. I think it’s a great method to teach financial literacy to kids in a way that will keep them interested.
    Gary @ Super Saving Tips recently posted…Couple Money Management: When a Saver Loves a SpenderMy Profile

    • My guess is there are some serious academic papers written on the economies of games like World of Warcraft, which is interesting because there are both in and out of game money dynamics (gold farming, paid account swaps, auction house arbitrage, etc. While I’m not ready for Little Bit to play online games where she’ll get exposed to unfiltered adult conversations, flaming and other dangers, I do think MMORPGs offer a ton more lessons through their complexity. Maybe when she’s 13 there will be an equivalent I can guide her through.

      While there are gamers of all ages, I do wonder where the natural cutoffs are. Jon and I have an 8 year age gap and very different experiences with and affinities for video games, and you’ve said that you and Suzanne have an age gap as well. I know that for me, arcade games and D&D became popular when I was in middle school, and the Atari hit around high school (I got to play with my younger brothers.) So I grew up around the games, but they were more of a choice for geeky kids like me than something all kids seem to do like they are now. Little Bit has no conception of a world without smart phones that allow kids to play games pretty much anywhere anytime.

  5. I totally agree about using video games to somehow teach about money, saving and spending! I guess I’ve done this with my son through the years but I didn’t realize it. We never bought the latest game systems – he saved and used birthday or Christmas money to buy his systems. I think he has taken better care of them because of that too. All the extras (XBox membership, etc.) need to be considered too! Great ideas!
    Vicki@Make Smarter Decisions recently posted…Our Snowbird Housing Plan – Two Homes for Under $100,000My Profile

    • Ahhh, the extras. Since we have been away from console gaming for a while, I’m less knowledgeable about those, but I’m sure they can add up quickly.

      I do think you are right about kids who have to buy their own stuff take better care of it. They also tend to be pickier with their own money than they are with yours.

      I also think using their own money will make them savvier about “needing” the latest and greatest too. A video game that costs $70 on release day might drop to $50 3 months later, or $20-$30 after a couple of years (even less used). At least, that’s what I’m hoping I can teach my daughter. Hopefully it will translate in a lifetime of buying quality “new to her” cars instead of the latest models.

  6. It’s funny, when I was a kid my dad tricked me into playing Reader Rabbit from a floppy disk to learn how to read. So my inner child is glad to see that you’re working with your kid’s choice. Very smart, and likely sustainable. The delayed gratification lessons you’ve come up with sound particularly poignant!
    Jay recently posted…Visa Stock Pick – Behind the Scenes VideoMy Profile

    • Ha, I think my daughter’s video games have improved her reading quite a bit. I know she seldom asks me to read the game content for her…just help with a word or two here and there.

      I admire teachers who can turn kid’s choices into learning opportunities, and it’s a lot easier to teach kids from what they are playing than to get them to play a lot of the deliberately educational games. Some of them are great and appealing, but some are way too much like their regular school…more fun than a worksheet, maybe but not something the kid will gravitate towards naturally.

  7. I love this post, Emily! I’m not a gamer myself, but my kids certainly are – particularly my 16 year old son. I like all of the points you make here. We don’t pay for anything related to gaming so our kids have to save up and make the purchases themselves. Sometimes I help navigate Craigslist sales and purchases but, monetarily, they are on their own.

    And they’ve learned so, so much from not only gaming, but the doing research and learning on the internet. My son wants to be a pilot, so he flies flight simulators and watches long (what I would think would be boring) youtube videos on everything and anything related to piloting. He has an incredible wealth of knowledge on the subject already.

    My favorite part of your post is this: “Maybe not, but that game he can’t stop talking about must be pretty important to your child. You probably need to make an effort to at least look at it.” AGREED! Rather than just telling kids to stop playing, join them and talk to them about it. They will LOVE it and it is a huge boost to parent-child bonding.
    Amanda @ centsiblyrich recently posted…Money Saving Tips and TricksMy Profile

    • I wonder how many kids develop their first real money skills when their parents refuse to buy them video games and tell them they can have them if they can pay for them. I also wonder how many kids opt for Gamefly as a more cost-effective solution to funding a game habit.

      You do need to engage with your kids on the stuff they like. And sometimes that stuff is not necessarily what you’d pick to spend your (or their) time on. But, different strokes for different folks, even if they are your offspring.

    • That’s terrific. I sometimes wish Little Bit was a little less focused on games, but she is my kid. Apple…tree. I just try to work it into the money-training plan as best as I can.

  8. “We don’t use real money for pretend things.” LOVE IT! We make our kids save for any kind of game purchases as well. They LOVE Minecraft, but the only money we’ve paid out for it was a small dollar amount to host a server where they can choose the people they multi-play with so we can keep it limited to people they truly know.

    • Paying for privacy is a bit different than paying for the game itself, so I can see that as a legitimate parent expense. It’s something I hadn’t thought of, and probably should. (Little Bit’s expressed an interest in Minecraft but hasn’t played yet.)

    • Best to think now. When Little Bit first started playing games we would let her do the occasional in app purchase as part of her allowance. I think changing strategies is helping, but it was harder to teach the delayed gratification lesson because she knows she used to be able to handle it differently.

  9. I love that you are teaching your daughter how to save up for something that she wants. That is so incredibly smart and a valuable financial lesson for her. I remember having to save up for games and various toys throughout the years. I definitely appreciated those toys and games way more and was super protective to ensure that nobody would damage them. Thanks for sharing.
    Mustard Seed Money recently posted…Saving Money When You Have A BabyMy Profile

    • My kid definitely asks. And sometimes my MiL will say yes when Little Bit plays on her tablet (only grandchild). But, I know from my own experience with freemium games, sometimes I want to buy the in app purchases but I understand that I can save and prioritize and play free. Someday Little Bit may have her own iTunes/Amazon/Google Play account and I won’t be able to say no to wasteful spending. She needs to learn to control impulses like that now.

  10. I absolutely love this! I’m a huge gamer; started when I was about 4 years old, and I’ve always wanted to pass it on to my daughter, who turns 3 in a few weeks. I’m also into the Japanese RPGs and actually attribute my reading and vocabulary skills to those games. =) So much reading involved! I totally see where the financial aspect can come in, too. I used to play Neopets off and on for like 10 years, and I feel like everything I know about money I learned there: the idea of supply and demand, the stock market… it’s amazing how video games can teach you so much!

    • I’ve really enjoyed watching my daughter cut back on the “dressing the princess” games to make more time for Animal Crossing and Brave Frontier. I figure Final Fantasy is right around the corner. Long term games (and JRPGs can be LONNNGGGG term) are great for thinking about resource management. Good luck with your daughter! I’m sure she’ll be a champion gamer soon enough!

    • Games have really evolved as they have gone mobile. There aren’t too many kids who don’t play at all anymore, so it’s more important than ever that parents (and grandparents like you) engage with them about their games.

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