Parents often forget that learning can actually be fun for their children, if they take the time to find entertaining ways to teach important lessons. Financial literacy is a problem in many parts of the civilized world because there are so few ways to learn about finances from a young age. The burden fails to the parents to teach their children about fiscal responsibility, and there is a simple tool that can easily help children pick up the complex concepts associated with finance. That tool has been around since 1935, and it is nothing other than the popular board game called Monopoly.
Learn While Playing
Monopoly is one of those quintessential board games that was a staple of growing up in the past, but it has since been replaced by the numerous computer games that exist in the current world. Parents are much more likely to be familiar with the game from their own childhood, which makes it an ideal way for parents and children to connect in this day and age. The game is best saved for a rainy day, or any other occasion where the family is caught indoors for an extended period.
It has long since been established that training is best done through hands-on experience, and games are a great way to incorporate knowledge into a fun system. Monopoly is one such game. It is based almost entirely on financial responsibility and dealings, so it is a good way for children to practice for the real world.
Math is a skill of huge value, and Monopoly teaches children about addition and subtraction on the fly thanks to the monetary system the game uses. Parents should allow their children to act as the banker during the game to further increase their interaction and cognitive abilities. Younger players also benefit from the game by learning to count out their movement after they roll.
Monopoly is basically a game of chance that involves investing in property with the hope the investment will pay off when someone lands on your property and has to pay rent. This helps teach children the idea of capitol gains through investing in real world markets.
Perhaps the most important aspect of Monopoly is budgeting, and that can be said of real life as well. Budgeting helps prevent overspending or over investing. For children learning to play a game, this is often a trial and error situation. You may find your child buying every single piece of property that he or she lands on, simply because that seems like it should be a good idea. Once they’ve exhausted their funds, they’ll naturally learn that blowing all your money isn’t a good idea, even if that money is going into investments.
How players budget through Monopoly also teaches the value of waiting to buy only what is going to be most beneficial to you. Children who are new to game often buy up the first few properties, which offer the lowest return on investment in the game. They’ll quickly learn that buying everything leaves you without liquid financing, which can be an issue when it comes time to settle a debt.
Budgeting is also exemplified through the ‘Pass Go’ feature of the game, where the player collects $200 every time they pass the starting space. This helps teach about regular income and how it should be saved for larger purchases. This can be tricky, however, because it can teach children to rely on funds before they receive them. Keeping a balance between the two will result in a high level of responsibility.
Reward Vs Risk
The game of Monopoly is quite similar to real life in that you have no idea whether or not a risk is going to pay off. You may find yourself investing heavily in properties that have a high ROI, but that doesn’t mean the investment will be repaid to you. Parents can use Monopoly to teach their children about taking risks in the short run to boost long-term earning potential. Monopoly also includes spaces that allow players to draw Chance or Community Chest cards, which is nothing more than an additional unknown variable.
While it’s something most people hope to avoid altogether, bankruptcy is a very real aspect of society. Monopoly teaches about bankruptcy in a straightforward way. Players who declare bankruptcy must forfeit their properties or mortgage them to the bank in order to pay off any debts. This stage is great for teaching negotiation skills as well, since the bankrupt player can bargain with their debt owner over what will clear the debt, and they may reach an understanding that is beneficial to both parties.
Just like life, there will be people who play Monopoly and end up incredibly lucky the entire game. Parents can use luck to teach their children that the world isn’t necessarily a fair place, and that some people are just going to be better off for no reason. Monopoly calls it ‘Free Parking’, but the real world calls it a cash windfall. There are so many ways that people might stumble upon found cash, either through the lottery or inheritance.
Monopoly has been around for nearly 100 years, and its popularity is due to the fact that so many people use the game to hone their financing skills. Parents should take full advantage of such a powerful tool, especially since children don’t see it as a learning experience. For them, it is simply fun.