Start when they're young. It will make it easier later.
Post-holiday winter downtime provides an ideal opportunity to play money games with your kids. It's cold outside, it's time to plan for the new year, and your kids may have some gifted cash they're trying to figure out how to spend. There are plenty of choices both online and off that can teach basic concepts, savings habits, money management, and business skills. Check out these money games for kids at every stage of development:
Age 3 to 6: What is this stuff?
As soon as your children are old enough not to eat money, they can start learning about it. For offline money fun, all you need is a handful of change and some small bills. The youngest kids may not grasp the notion of exchanging money for goods and services, but they can learn to recognize coins and small-denomination bills by handling them, talking about them, and playing "what's this?" with you. You ask; they answer -- easy and fun for little kids.
Once children are into pretend play, it's time to "shop." Pick a few toys or home items to stock the pretend shelves, price them in easy amounts like 25 cents or a dollar, and let your kids "shop" by finding and giving you the right amount of money. Later, you can get fancy; a soccer ball might cost $2.27, so kids have to combine coins and bills. Save making change for later. For now, just focus on the idea that coins and bills have specific values and can be traded for other things.
For online reinforcement, ABCya.com's free Learning Coins page can help kids master coin names and values. Audio instructions let pre-readers play games that include drag-and-drop coin sorting and adding coins to make a dollar. Other games are for upper-elementary kids, but younger kids can probably handle them with help from an adult.
Age 7 to 10: Saving and spending skills
Most kids this age have pocket money from an allowance or chores. What they typically don't have are budgeting skills and patience. A couple of free online games to teach these habits are Ed's Bank and Money Metropolis, both from Visa's Practical Money Skills site.
In the first game, players help Ed gather coins for a little recreational shopping and then see what they can afford. Players can go back to save more for big-ticket items or spend what they have on hand. Money Metropolis lets players save for expensive items like a puppy by working at local shops, where they'll also be tempted to spend their earnings on impulse items.
Offline, there's a special thrill to spending money for many kids this age. It's a grown-up thing to do, and if they have cash in hand and can't afford what they want, they may buy something cheaper because the act of making a purchase is more appealing to them than saving. One way to indulge this urge without breaking a little kid's bank is to take the child to a thrift store to see how many items you can buy for, say, $3. Later, after the shopping glow fades, you can talk about whether you really want or need those items and donate them if they're not needed -- a lesson in itself on impulse spending.
Tween and teens: Digging deeper into money concepts
Most role-playing games have a financial aspect, whether it's collecting treasure or buying your way out of trouble. Minecraft, recently bought from Mojang AB by Microsoft, is among the most popular games with players of all ages, and my own tween and teen have learned from Minecraft how to earn currency, save resources, and barter while building fancy houses and tossing things into virtual lava pits.
My kids are in good company. Reuters recently spelled out the intricacies of earning, savings, and macroeconomics playing out on Minecraft servers around the world. If your kids already play Minecraft and you don't, ask them to explain how it works. You may be surprised by how much financial savvy they've picked up. If they don't play, consider starting as a family and learning together. Minecraft isn't free, but as games go it's a good value.
Offline, things can get real at this age. Kids who like to compete can look into local, state, and national entrepreneurship contests, too. This year's winner of the National Youth Entrepreneurship Challenge was a Baltimore eighth-grader with a profitable legwarmer shop on Etsy. Her idea scored her $25,000 in cash, scholarships, and tech tools, along with a trip to the White House in November.
Other competitions are Wisconsin YES!, the Grow Your Own Business Challenge at Warren Buffett's Secret Millionaires Club, and Austin's Acton Children's Business Fair. Whether your kids are playing to win a competition or just playing around, investing their time this winter on money games will pay off as financial know-how in the years ahead.
