“Life is a game. Money is how we keep score.”
Ted Turner
Games can create positive personal financial growth, but harbor triggers for bad behavior.
Opinions on how video games influence children are rampant. They corrupt minds and lead to aggressive behavior, some say. Others posit, they can teach children valuable lessons for life and personal finance. We’ll cover both sides here.
Per the American Academy of Child and Adolescent Psychiatry: “children between the ages of 8 and 12 spend four to six hours per day watching or using screens. For teenagers, that number increases to as much as nine hours per day.” If Malcolm Gladwell is right about 10,000 hours, your kid should go pro in about 2.5 years. They could also find success as coders, developers, and entrepreneurs of games.
Overall, there’s no slowing the gaming industry, which is expected to reach $219 Billion by 2024. This market and technology will have a profound effect on Generation Z and Generation Alpha.
The Influence of Games on Kids and Personal Finance: The Bad
Parents criticize games as wastes of time where kids get lost in unrealistic fantasies. That time could be spent studying, playing or socializing, instead of on a screen. This is why kids who play games too much often have lower grades, poor social skills and worse health. This translates to weaker personal finance skills now and outcomes in the future.
The whole ecosystem is rife with corruption. Bad influencers and predators prey on kids on sites like Twitch. They’re online for other nefarious reasons, but they’ll take you and your kids’ money, too. Don’t give your credit card number to your kids for video games (for any reason, actually) because they could end up running up crazy bills, and they could also be duped by online scams.
Not to mention, when kids spend fake currency like it doesn’t matter in the digital realm, that can bleed into poor spending habits in the real world. They can binge spend as if it doesn’t matter in their actual life. That has long term consequences and you can’t just restart like on Xbox or Switch.
The Influence of Games on Kids and Personal Finance: The Good
On a positive note, video games can advance higher-level and abstract thinking skills, while improving math, reading and logic skills. Games can also directly impact their personal financial practices and knowledge. Plus, they spend time with other kids in multiplayer games, which presents opportunities to form relationship-building habits like teamwork and cooperation.
Animal Crossing: New Horizons is one of the most popular games of this century. You can build an island, be an animal, sell and buy goods and services, even invest your money and own a home. Sure you’re a talking racoon, but that’s the whole point. AC:NH gamifies the experience while incepting these economic and personal finance concepts in kids’ developing brains.It’s not all about spending money, either. Kids can make serious money playing video games! They can coach other players, test games, stream on twitch, develop their own games, and go professional. Still, pro gamers earn as little as $1k – $5k per month. So, your “pro gamer” kid will probably still be living in your basement.
The Influence of Games on Kids and Personal Finance: The Balance
Get the kids up and out the house. They need to spend vastly more time IRL than in front of a screen. They can learn as much and more about personal finance in the real world instead of online. If they want money to game, how about giving them the same money to invest? Far less fun now, but it will stick in their craw for the long term.
In the real world, it’s important to teach kids what they need to earn to spend in the virtual world. Spending money on in-game features should come from their allowance. When kids spend their own money, it’s different than when it comes from the never-ending stream. It requires thought, and making choices and trade-offs.
Set a budget with them. Go over what they want to buy and how much that would cost. Then discuss ways for them to earn money toward that expense.
If you kid games, incentivize them to earn time to game. Give them more time on the weekends if they meet goals through the week. Permit them the ability to earn their own money and time to spend with games while in your house.
Who knows? They could go pro… and still live in your house…
