via Wela: It’s a one of the most iconic board games of all time. Well, technically, the most iconic since its release in 1935. Aside from being a great way to enjoy a game night in, it can also teach us a lot about personal finance and investing. While these concepts might feel exclusive to adults, there are some basic principles for which you can use Monopoly to teach your kids. The great thing about this game is a lot of the situations below will arise naturally during game play (teaching moment!). So pick your game piece, choose a banker, and get your learning on.
- Basic Financial Math SkillsWhether playing as the banker or as a regular player kids will be responsible for making financial transactions like purchasing and making change. This is great for practicing basic math skills but also getting comfortable with different denominations of currency.
- The Importance of Keeping Cash On HandIf your kid is anything like my goddaughter (who’s 5), they like quantity. She wants to buy up everything she can as quickly as she can and have more ownership of the board. However, she quickly learned she couldn’t meet her financial obligations because she was spending money faster than she made it. Game over kiddo. This is a great time to encourage your kids to think about the future and plan accordingly.
- Managing Cash Flow by Earning IncomeI saw this lesson on a blog post called “5 Educational Board Games for Money Management” over at Money Crashers. When you “Pass Go” you’re earning your salary. It’s basically your paycheck. Use this to talk about the value of living within your means, how to avoid “living” paycheck to paycheck, and income tax. You don’t have to use all the high-level adult words; the concept will stick.Related: How Your Children Benefit When You Pay Them To Do Chores
- Life is Full of SurprisesDouble whammy! Money lesson AND life lesson. Everyone starts off with the same amount of money but from there anything can happen. Player’s can experience some rough patches by being dealt a bad hand (literally) with chance cards and dice rolls but they can also have some strokes of luck. It’s important to encourage your kids to take advantage of opportunities that come their way and not to get discouraged when things go awry.
- Everyone Needs an Emergency FundSpeaking of chance cards–you can find yourself in quite a pickle if you haven’t stashed away some cash. Teach your kids to put some of their earnings in a different pile for those game “emergencies.” If you don’t have cash to pay for something like hotel repairs, or railroad rent you are forced to sell off some of your assets at a steep discount.
- BudgetingAs your kids start accruing assets on the board the game is going to get more complicated (ahh mid-20s, I remember you well). They must think about how much cash they need to have to make it around the board (ie to their next paycheck) without running out, plan ahead for taxes and income, make payments as they land on other player’s properties, etc.
- The Art of NegotiationThe game offers opportunities to negotiate with other players to sell or secure properties and even get out of jail (you can hold onto the Get Out Of Jail Free card and sell it to another player). Here they can explore their ability to reach a mutually beneficial deal. This is also a good time for you to figure out if your older kid has learned how to start manipulating your younger one into totally unfruitful deals (not saying I ever did this to my younger brother or anything…).
Money management is one of those life skills that often gets forgotten or overlooked because it feels like such a grown-ups-only topic. The fact is, the earlier you start establishing some basic principles with your children the better they will understand money as they start to earn their own. Plus board games are fun.