How to use Monopoly to teach your kids about money
If you want to teach your children about money, crack out the ever-popular board game Monopoly – you’ll be surprised what they can learn while you’re all having fun
Forget boring lectures and lessons, when kids can learn by playing, you’ll be surprised by what they pick up.
Competing to make each other bankrupt might even help avoid problems as adults.
Children start to pick up vital money skills and habits between the ages of three and seven, according to the Money and Pensions Service.
So it’s easy to see how learning about money while young can have a direct impact on our ability to manage money for the rest of our lives.
Parents can play a vital role in financial education by talking to their kids about money, and hopefully passing on more good financial habits than bad ones.
Check out the 12 key money lessons you can learn from Monopoly below, then use our handy “cut-out-and-keep” guide during the game.
Brush up on basic numeracy
Monopoly gives your kids the chance to put mental arithmetic in practice outside the classroom.
Addition, subtraction and even multiplication all feature, whether adding up the money to buy a property, getting change from the bank, or working out the rent owed when landing on the Electric Company or the Water Works.
Even counting out the spaces when it’s their turn to move can help young children become more comfortable with numbers.
The aim of the game is to avoid running out of money and going bankrupt – which will stand them in good stead in later life
Discover a bunch of financial terms
Beyond rent, mortgages and buying property, you may be surprised at the range of financial products and concepts slipped into classic Monopoly.
When picking up Chance and Community Chest cards, players can gain extra cash everywhere from inheritance, selling stock and bank dividends to income tax refunds and bank errors.
They also face forking out for speeding fines and repairing property.
Plus, the whole aim of the game is to avoid running out of money and going bankrupt – which will stand them in good stead in later life.
Invest to make the most of your money
Everyone starts Monopoly with the same £1,500, but you can’t win the game by sitting on the cash.
Instead, you need to invest, by snapping up properties.
With inflation ticking up higher than interest on savings, many adults could do with taking some investment risk.
Historically, investing in property or the stockmarket has delivered higher returns than sticking with a savings account.
Always remember, though, that the value of your investments can go down as well as up based on market fluctuations. How they’ve done in the past isn’t a guarantee of how they’ll perform in the future. This will therefore affect the return on investment
Monopoly soon teaches that holding out for the perfect properties leaves you lagging behind.
Waiting around for Mayfair and Park Lane can mean there is little left to buy afterwards, if other players have raced round the board scooping up properties.
Similarly, the earlier you start investing in real life, the more time there is for your money to grow.
Don’t put all your eggs in one basket
Holding a spread of properties round the board means players are more likely to land on them – so you earn more rent and are less likely to pay it.
Diversification is also vital when investing. You can minimise losses by holding a spread of investments in different types of countries, companies and industries, rather than picking shares in a single company.
Learn to be a landlord
Whether you love or hate buy-to-let landlords, Monopoly introduces the basics that those who buy property can charge other people rent to stay there. The more expensive the property, the more rent they receive.
Nabbing all the properties in the same colour also means you earn double the rent – and then earn even more by improving your properties with houses and hotels.
Meanwhile, if you aren’t able to buy enough property, you end up paying rent rather than raking it in.
Cashflow is king
Although it’s important to buy and improve properties, Monopoly also demonstrates that it’s vital to hold back some emergency savings
Without spare cash to cover rent or pay Chance and Community Chest demands, you can be forced to mortgage or sell properties to avoid going bankrupt.
Back in the real world, experts recommend trying to scrape together three to six months’ living expenses in cash savings.
Debt is expensive
Monopoly teaches some great lessons about debt and over-spending.
Cash-strapped players can raise money by remortgaging properties – but only get half as much money as the property cost to buy.
Plus, if you then want to clear a mortgage, you have to pay back an extra 10% in interest.
Better to learn about expensive interest rates from a game rather than their first credit card.
Depreciation is also expensive
Similarly, if you are forced to sell houses and hotels on your sets of properties, you only get paid half the value shown on the title deed.
The difference between the price paid for something new, and the price raised when selling something second-hand, is well worth remembering before driving a brand new car off a dealer’s forecourt.
Develop haggling skills
Haggling with other players is key in Monopoly, from trading properties and complete sets to selling “get out of jail free” cards.
You’ll be grateful for those skills as an adult, when you want to negotiate a discount or pay rise.
Classic Monopoly is a long game.
Once all the property cards have been snapped up, you have to keep going until players run out of money, one by one.
Similarly, building up a pension can take many years, but those retirement savings eventually mean you can quit work and play as many board games as you want.
Understand economic inequality
Everyone starts Monopoly with the same cash, but afterwards it is just luck of the draw where you land.
No matter how good your strategy, sometimes the dice just don’t play ball.
You lurch from income tax demands to visiting jail and free parking, while everyone else buys property.
The rich get richer, raking in rent, while the poor get poorer.
A harsh lesson, but one that can encourage your kids to make the most of any opportunities that come their way.
3 things to do right now...
Break out the board games and get the whole family playing Monopoly
Check if your kids understand the terms used, such as income tax, and have a chat if they don’t
Think about how to introduce good money habits at other times, from paying pocket money to encouraging saving and helping them budget for meals, clothes or days out
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Don’t forget that while you may think that this article is brilliant, it is intended for information purposes only and should not be mistaken for financial advice or recommendations.
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