By Liam Gibson
Wealth of Geeks
According to a recent study from Greenlight, 93% of U.S. teens say they need financial knowledge and skills to reach their life goals, and 97% of their parents agree.
It seems there is little Americans can agree on these days, but the need for improving financial literacy among young adults is something everyone can get behind. As financial institutions launch online games for children advertised as educational tools to improve their money habits, many people wonder, are they trustworthy?
There is a real need to educate the younger generation on financial matters. Fortunately, teens appear hungry for money and know-how.
Yet when financial education is the aim of the game, does it really ‘make cents’ to play?
Does gamifying financial education make money topics more accessible and enjoyable for children? Financial advisors offer their perspective on what tools parents can use to teach the next generation about money.
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Getting in the game
There is a desperate need to deliver financial advice to young adults and teenagers about money, and bridging the financial knowledge void is proving challenging. Junior Achievement USA and Citizens Bank surveyed 1,000 teenagers last year and found 54% worry about financing their futures. The problem is not going away as they enter adulthood, either.
According to a 2022 Fidelity study, 59% of young adults dread checking their bank account balances, and many face financial difficulties. Yet the firm claims its new games can make a difference.
“We apply a scan, try, and scale approach to innovation, and our experimentation with new platforms is no different,” said Kathryn Condon, Head of Marketing at Fidelity. “Helping the next generation of investors build long-lasting money habits is a priority. With these new and relevant experiences, we’re providing them with tools to build their knowledge and create a strong financial foundation for the future.”
Fidelity is not alone. There are numerous other fin-ed games out there. Visa and the National Football League launched Financial Football, a fast-paced, interactive game that teaches children personal finance skills. Users answer financial questions to move their players up the field and score a touchdown.
With Stax, an investing game, students experience the consequences of investment decisions made 20 years ago. Users receive a fixed monthly income and steadily build a portfolio, unlocking new assets while holding enough cash for emergency expenses.
Pancake Empire Tower Tycoon and Bloom-o-drama may sound like follow-ups to Candy Crush or Farmville, but these aren’t ordinary games. These are two new digital experiences from Fidelity Investments aimed at helping the young develop their financial know-how and build healthier money habits.
Pancake Empire Tower Tycoon, available on the Roblox platform, lets users practice spending, saving, and investing activities spending. Bloom-o-rama users will wander through the metaverse platform Decentraland to unlock investing tips, money mantras, and quizzes reinforcing financial know-how.
“Gamification can be a fun and effective tool for teaching kids about money and investing, but it’s crucial to strike a balance between entertainment and education,” says Jorey Bernstein, Founder of Bernstein Investment Consultants. “It’s important to ensure that children understand the difference between real money and in-game currency.”
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Too young to make cents?
Exploring children’s financial education opens up the age-old question of when is the right time to start a financial education.
Academic studies have shown that most money habits begin to be set around age nine. Parents’ preferences will differ. Some parents find it appropriate to wait until elementary school to teach their children about money. Still, there’s also a case for starting earlier.
Some experts, like author Beth Kobliner, claim toddlers as young as three can begin to understand basic money concepts.
“The age at which children should start learning about finances depends on their maturity level and understanding of money,” says Bernstein. “However, starting with basic financial concepts around the age of eight to ten can set them up for financial success in the future.”
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Keep it simple
While gamification can be fun, not all financial education tools must be jam-packed with colorful characters and clicky popups.
“A tool that we’ve had good luck with and recommended to clients with younger kids is to use a Google sheet savings account,” Chris Kimmet, Financial Planner at Steady Climb Financial Planning. “The sheet displays their balance and how much interest they earn daily. It helps them understand how money grows over time, and they get excited when we look ahead to what their balance will be if they keep their money in the account and allow it to grow versus taking it out and spending it.”
“I have found that tangible cash is the best way to get kids excited about earning money, saving, and learning about the value of money,” says Chris Randall, Founder & CEO of Axis Capital Management. “They are learning about money in school, and they are eager to apply those concepts in the real world, like at the grocery store.”
When educating teenagers and children about money, there is no one-size-fits-all approach. Money remains part of the adult world and can seem out of reach to kids. Making it relevant for children requires both creativity and experimentation.
Any method that captures the child’s imagination and has them absorb key money lessons should be encouraged, whether through games, financial coaching, hands-on activities, or even classroom lessons. By informing the younger generation of how money decisions impact their future, we can ensure they have the tools to pave the way for their financially secure future.
