Teaching Tool of the Month: Monopoly
Every month we are highlighting one teaching tool that has our stamp of approval in helping parents or grown ups put the FUN in teaching the fundamentals of finance.
We independently research, test, review and recommend the best products—for FAQs about us click here. If you buy something through our links, we may earn a commission.
Game: Monopoly
Manufacturer: Hasbro
Age Range: 8 years old and up (Junior Monopoly can be 5 and up)
Most of us are familiar with the game Monopoly having played it growing. What you may not realize, however, is the game carries many teachable financial lessons to our kids and can be a great place to start financial literacy discussions.
The object of the game is simple: be the last payer standing without going bankrupt. The act of winning, however, requires a combination of strategy, patience, and a bit of luck (similar to life).
Now just a few words before we dive in. Don’t worry if everything we talk about below doesn’t sink in right away; these lessons take time for our kids (think about how many times you have told them to do something before they do it!). What’s important is the repetition of playing while getting the kiddos to start to think about money principles in a way that ultimately can help them live the life they want to live.
Lastly, we would also advise to remember to try to keep discussions age appropriate with more detail the older the kids are (but ultimately we leave it to you on knowing what your own kids may or may not be ready to handle).
Ok, so lets dive in and get into some important principles that we think Monopoly can teach our kiddos.
Saving And The Principle of Deferred Gratification
Saving, deferred gratification, and learning to wait for something we want is one of the most important principles we can learn around money and life. The earlier our kids learn this principle the better.
Does our kid want to be a doctor one day? Well that is going to require years of school and deferred gratification. Does our kid want to get that new expensive pair of shoes? That may require some saving, planning, and deferred gratification to achieve their goal. Does our kid want to get to a point in life where he or she is living the life that they want for themselves? That most surely will also require patience, persistence, and mastering the principle of deferred gratification.
The good news is that Monopoly is a great way to start talking and learning about this principle with our kids. One thing to do right from the top is to make sure that once you decided to start a game, you finish. The game itself can take a long time and just the act of getting through to completion can cultivate this lesson. It doesn’t all have to be in one day, but make sure you set aside the time to complete what you set out to do.
Also, as you move through the game, talk about the decisions you both are making. Be sure to point our when you use your money to buy a property and why you are doing it (in the hopes that you will earn more money with it later - that’s deferred gratification!)
Investing And The Concept of Price vs. Value
Warren Buffett, perhaps the greatest investor of all time, has a famous saying: “price is what you pay, value is what you get.” The meaning behind this is that it really matters less what something costs, what matters more is how much value it carries. Being able to asses this for our own lives is vitally important and it is something we can start to talk about with our kids during Monopoly (i.e. was spending money on that toy worth it?)
When they make decisions moving around the board, ask them about why or why did they not decide to purchase a space. The answer most undoubtedly will be something in the form of “because I didn’t think it was worth it.” Have them talk this through with you a bit more about why they didn’t thinks so. Once they do this is a great segue into explaining how you make some decisions with real money that have more value to you than other things (i.e. you choose to buy one brand of coffee at the grocery store vs. another because you like it and think it has more value to you even though it costs less than some others).
As the game moves on you can revisit these decisions and ask them again about what may or may not truly have had more value than they thought (should they really have bought the Pennsylvania Railroad?!).
Money Decision Making
As each player starts and goes through the game there are lots of decisions to be made with money. The primary decisions are around accumulating cash for saving or deciding to spend it to buy properties on the board in the hopes of collecting rent from anyone who happens to land on that space. This is a great way to start talking to kids about how you as a parent have to make similar decisions with your money in real life.
Do you want to save up for a rainy day, put the cash to use now for something you will enjoy or invest for the future? As our kids land on spaces and decide to use or not use their cash, have them explain their decision making process. In the end, we all don’t make perfect decisions with our money (we at Future Funders sure don’t!), but having the kiddos at least start to think through why they are choosing to do something with their money can ultimately get them on the path to thinking about how they may want to use money in their own life as they grow.
How To Earn Money
Earning money is an essential part of life, but do we ever stop and actually think about the three main ways we can actually earn? Most of us work hard at school, get a job, and money comes to us as a result. We are not taught much about how we earn money. Well here it is, people mainly earn money consistently from: Entrepreneurship (we call it Skills For Self-Empowerment), a traditional job working for someone else (we call it Skills For Hire), or Investing (or some combination of the three).
We believe that learning how to earn money is a key that can help us live the life we want, and Monopoly is a great way to start to introduce these three methods. When we play the game, we are primarily tapping into two ways to earn, namely Skills For Self Empowerment and Investing. We are using our own money as we move through the game to build a real estate business (by buying properties) which we hope to profit off later (this is one avenue for entrepreneurship).
We are also investing our money in the hopes that we will get back more later from either selling properties or collecting rent (or possibly negotiating a trade which we cover below). As we play the game, it can be a great time to start talking to our kids about these three ways we all earn money and how they are choosing to do it throughout the game.
How To Negotiate
Negotiation is an important skill to learn in life as it can help you get the life you want to live. There are two forms of negotiation that we think can be talked about through the game of monopoly: negotiation with yourself and negotiation with others.
Negotiation with yourself happens every day, do you decide to get up early a do some exercise or sleep in? Do you decide to spend some money now on that dress or save it for something else better later? We negotiate with ourselves all the time and when it comes to learning how to use money as a tool to help us live the life we want, and learning how to negotiate with ourselves effectively is an important skill.
The second form of negotiation is with others. Whether you are trading at a flea market or negotiating for a hire salary at work we also need to learn how this skill can help us when adapted for money.
As we play the game of Monopoly, the players can negotiate trades of properties or money for properties and we can help our kids by talking through the negotiating process.
Help them to understand that they should seek to get what they think will have the most value to them in the game (and in life) while offering something else of value to someone else. Learning this skill early can help them down the road in moving pieces around to shape the life they want, and Monopoly is a great place to start cultivating this skill.
