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Monopoly Jr and Behavioral Finance: How playing a game can help children with money

While playing Monopoly, I saw a great opportunity to further my children’s instruction on money management

I didn’t realize playing Monopoly,\ Jr would also be a lesson in Behavioral Finance!

In the times of social distancing and quarantine, I, like all of you, have been using a wide variety of activities to keep our minds and hands busy. With 9 and 6-year-old girls in my house, keeping them busy avoids fights, tears and TV binging. Family game nights/days/15 minutes have been a constant in our house and Monopoly Jr. is our go-to.

Behavioral Finance: a 9 and 6 year old’s biases

My 9-year-old is very responsible and conservative with her money. She puts half of her money in the bank and keeps the other half in a jar in her room. In Behavioral Finance, this is called mental accounting.Her goal with the money in the bank is to buy a car when she gets her license and help pay for her college. (Be still my heart…) The money she keeps in her room, she likes to count, organize and buy trinkets for herself. She likes the Dollar Tree because you get more for your money versus Target.

My 6-year-old spends every dollar she receives. Her bank account has cobwebs and her piggy banks are empty. She likes to go to the store because she buys toys, gets “more money back” aka change from the cashier and a receipt, which in her opinion is worth more than money. (face-palm) Her decision making with money is usually driven by emotions, which is a concept in Behavioral Finance called the Emotional Gap

Both girls are taught the value of a dollar, the bank half/keep half methodology and that you must work hard and do your chores to receive an allowance. But the way they treat money is so different that you would think we have completely different rules and lessons for each of them. Their money management styles though, reflect their personalities: my eldest is conservative and responsible, the 6-year-old is my wild child.

While playing Monopoly with my two girls, their money behavior shines through.

The younger one is buying every property she can, laughs when her money gets low and somehow earns more and digs herself out of any financial hole she’s in. My older daughter is very selective when buying properties, neatly piles up her play money and wouldn’t purposely dare get close to running out of money.

I fall in between, so I can emphasize with both. My Monopoly personality is pretty similar to my real-life money management. During the game, my stomach sinks a little when my pile of money isn’t high as I’d like, but I also like to buy everything I can.

How I help kids with money while playing a game

Now that I can clearly see my kids’ money behavior, I am going to use Monopoly Jr to further teach them money lessons. I am going to encourage my eldest to keep good tabs on her pile and to continue being selective with how she spends her money, but part of the game (and life) is to take chances. And as long as she has a pile of money that she is comfortable with, it is OK to spend and to reward yourself every once in a while (go ahead, buy Boardwalk… Park Place too!). My younger child’s lesson is going to be a little different, you need to have two piles of money: a save pile and a spend pile. If you want to buy a property it has to be out of the spend pile.

I am curious to see 20 years from now how much my girls’ real-life money behavior changes, I have a feeling not that much. Hopefully though, they hold onto the concepts learned while playing Monopoly in quarantine. Most importantly though, I hope they will still play Monopoly with me.

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