Teaching kids about money and financial literacy with video games

Teaching kids about money and financial literacy with video gamesTeaching kids about money and financial literacy with video gamesThis post is inspired by a discussion I had withMelissa Blevinsabout financial literacy. I appreciate her lending meher platformto help you use stories and analogies to improve your own financial lives as well as your childrens. Teaching children to have a healthy relationship with money is imperative, however many of the available tools come up short, reaching children often requires some out-of-the-box methods.Sometimes people in the personal finance space question my use ofgeek cultureto teach financial lessons. When I have offered to do guests posts on other peoples blogs tying back some financial topic to the latestTV show,video game, or manga book I often get some resistance. Allow me to explain why I use stories and analogies to teach lessons and why as a parentyoushould be doing the same.Follow Ladders on FlipboardFollow Ladders magazines on Flipbo ard covering Happiness, Productivity, Job Satisfaction, Neuroscience, and moreWhen it comes to personal behavior, we are resistant to change, whether is with finances, fitness, productivity. Any improvement in behavior immediately presupposes the old behavior was wrong and people (myself included) do leid like to be wrong. The knee-jerk reaction to anyone suggesting we are wrong is to become defensive, maybe make excuses or justification of the behavior. Some people go as so far as to become depressed or despondent over a worsening behavior, creating a vicious self-fulling cycle.Why stories?Stories, through the use of analogies, metaphors, or just a healthygeeky discussionhave an excellent way of bypassing our defenses. Its much easier to see the faults in some fictional character or situation than our own. However, we can see ourselves in these situations and learn from them neither the less. Analogies are certainly elend a new teaching aid, they have been around since Biblical tim es. Fables have been used for centuries to pass on knowledge, and even today stories and games are used toeducate young children.I think at one point everyone collectively decides money is such a serious topic that we cant have a bit of fun with financial literacy. Well, themasses are not in great financial shape, despite all the financial information available online or otherwise. So its clear we need to change how information is presented and taught.Financial literacy for kidsYou cant teach what you cant demonstrate, and as parents, if you do not have a healthy relationship with money the best tools in the world will not out teach a bad example. Reading blogs like this blog is a great start, and Melissa has some greatresources to help you improve your finances.As parents, I think that there are two critical topics to teach kids about money.The difference between a want and a needIts ok want something as long as youre willing to do the work to earn it.I see parents routinely teachi ng their children the difference between a need and a want. This is a tremendous financial lesson to learn however, its crucial not overly to rely on frugality and delayed satisfaction. Imagine if you were trying to teach a child about healthy eating. Would you solely focus on calorie restriction? Or would you choose to focus on a balanced diet coupled with activity and, yes, even occasional rewards, like the occasional cookie as a treat? What approach do you think would develop the healthiest relationship with food? Raisinghealthy kidsis about teaching them the balance between delayed gratification and working hard for a goal.Hopefully, you choose the latter, as research suggests, diets based on a combination of increased activity and healthy balanced eating are more successful than dieting alone.So, when we are trying to help our kids have a healthy relationship with money, we want to utilize a similar approach. Giving children the opportunity to earn something they want is the fi nancial version of the exercise.Tip When taking your children shopping, dont tell them you cant afford something. Its crucial you come from abundance. Instead, point out that its not in the current budget, as you are prioritizing other things that are of greater value to the family. Let your children know, they canmake money, save, and budget for these wants if these choose.Using video games to teach kids about moneyIf you grew up playing Atari and have not played video games since you had a regular Nintendo in grade school, you must be wondering whatany of thishas to do with finances. Well, video games have evolved since the 8-bit era of jumping over pipes or rescuing Princess Peach. Today, games are massive multi-faceted worlds that are a microcosm of modern society. Most even have in-game economies encouraging players tomake money online.Many Modern games allow players to complete tasks to earn in-game currency (money) to purchase upgrades, enhancements, or skins. Some video game s, go so far as allow you to set up markets to earn in-game loot, or even craft items to sell to in-game merchants.The gameSkyrim, for example, affords players the opportunity to collect ore and gems and turn the raw materials into jewelry that can be sold to in-game merchants. Your childs very first business venture could end up being an in-game virtual one.Use this as a teaching moment, discuss with them that what they are doing when turning the ore into profit is adding value and explain how thats done in real life.Caution some games may be to mature for your child, its important that you understand what games your child can handle. Observe, them playing the games and if you see them engaging in any questionable behavior be prepared to intervene. Keep in mind most modern games have a social element, and your children may be speaking with people online.A discussion about the best video games to teach kids about money is beyond the scope of this article. Although it would be fun to do, I couldnt recommend a game because I do not know you or your family. A game that one family may find lind could offend another family. Additionally, children mature at different paces. As an example, my youngest can handle some more advanced games, because he grew up watching his big sister playing games and she always is willing to lend a hand when he gets stuck.Tip If youre looking milder games or in particular games for younger children, Nintendo tends to cater to the casual and family crowd. Nintendo prides its self on maintaining a safe and family-friendly standard.Caution Some companies such as EA attempt to monetize games by selling randomized, that are effectively barely legalized gambling.Even a relatively simple game likeCandy Crushcan be used to impartfinancial wisdom. Mobile freemium games usually sell extras to speed up playing the game. This is a great opportunity to teach your children about work and money. If your children want to buy a five dollar pack of lives give them the opportunity to earn money, doing work thats over and above any choirs that are expected of them. Set a timer and record how much time it took them to earn the money, and how long it took them to spend it.Then sit down and discuss with them.Was the effort worth it? Would that have saved up and bought something real instead of the in-game currency? Did the work take more time then what it takes for the lives to refresh in the game?This article originally appeared on Your Money Geek.