Gaming and financial literacy for kids

Earlier this year, my 8-year-old said, “All I want for my birthday is Robux.” Initially I wondered if he should aspire for something more than video game currency like this, but my wife offered a different perspective. She found it remarkable that he was saving up for something. As a professor of information technology, I’ve long recognized the value of video games. For example, gaming motivated my kids to learn to read. So it shouldn’t have been a surprise that gaming could help them learn financial literacy as well.

With a little guidance and some room to make mistakes, our kids are now learning how to earn, save and budget money using their favorite games. Here are four ways my wife and I use gaming to teach financial literacy to our kids.

What is financial literacy for kids? And what’s the best age to teach financial literacy?

For my family, financial literacy for kids means helping them grasp the essential skills involved in saving and budgeting money. Once kids start comprehending basic concepts in math, usually by the second or third grade, they can start learning about financial literacy. My wife and I focus on the following with our kids:

1. Learning how to spend within a budget

2. Earning in-game money by doing chores at home

3. Talking about strategies for saving and investing

What is a microtransaction in gaming?

Many games have their own in-game currency, or credit system. For example, Robux is the name of the in-game currency in Roblox. You purchase Robux with real money that’s added from the debit or credit card linked to the account, or a gift card you can buy online.

Robux can be used to make microtransactions. These are purchases in the game for items like outfits, called skins, or access to special servers to play a more customized version of the game. You can also use Robux to buy special items to help win a game. These items can go up and down in price, and some are only available for a special event.

For example, it currently costs $4.99 to get 400 Robux. Some items can cost thousands of Robux—for example, the Korblox Deathwalker skin is currently 29,000 Robux. When kids get a gift card loaded with 400 Robux, they decide how they want to spend it or if they want to save for a more expensive item. This is where the learning begins!

Financial literacy for kids and gaming: 4 tips

1. Create a system for earning the game’s currency by doing chores.

My wife and I have created chore star charts. This way, our kids can do things we need to have done around the house. The chores are simpler for our youngest—things like cleaning his room and brushing his teeth—but involve more responsibility and effort—like mowing the lawn—for our oldest. They can earn $5 per week if they stay on task. And they can choose to use that money for Robux.

2. Set up a gaming budget.

Given the limited number of occasions that our kids get Robux gift cards—like holidays and birthdays—my wife and I created a budget for their in-game purchases. Our kids can only spend in the games what they earn from their allowance. If there’s an outstanding achievement, like a remarkable report card, we might offer extra funds for their Robux budget, but they understand that simply asking for more won’t lead to a positive response.

Since some items in games like Roblox are limited, our kids need enough in-game currency to buy the item when it is available, or it could be gone forever. So our kids started learning how to save for these bigger and rarer items. They’re already motivated to save to acquire these more expensive items, and we encourage them.

3. Let them make mistakes.

Sometimes financial literacy for kids means making mistakes, too. Initially, my kids made poor choices with their in-game money, and I allowed it. When they realized they spent all their money on something they didn’t actually want, they cried out for more, which served as a valuable lesson. They needed to learn to consider what they really wanted and avoid overspending on unnecessary things.

We also talk about the importance of making thoughtful decisions and advise them to refrain from making impulse purchases. We suggest waiting a day or two so they can determine if they genuinely desire an item. They grasped the concept and have shown significant improvement since those initial mistakes.

4. Talk about the wins.

Financial literacy for kids is also about the wins. My oldest son started making money in the game by selling items. I was pretty happy about this as it was teaching him how to start a business, as well as how to code. These are skills I highly value. He and his brothers were also learning about digital currency.

All of these are great lessons, but buying virtual currency has some watch-outs that can be part of learning financial literacy for kids, too.

• First, these are all virtual, so if the game disappears or you stop playing, any purchases or currency are lost. It may also be worth emphasizing how virtual products differ from tangible, real world purchases in how often you can use and keep such things.

• Additionally, there are numerous fraudulent websites that sell fake gift cards, so it’s advisable to purchase them directly from the game’s official website or reputable in-person or online retailers.

I believe these games have a wide range of uses, including financial literacy for kids. With some guidance, a plan, a budget and permission to make mistakes, games can make learning to save and budget much more enjoyable.

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