As much as 90 per cent of children in the UK play some form of video game and spend an average of £38 per month on in-game purchases. But as parents struggle to find an effective way to teach responsible spending, it turns out the solution may actually lie in the video games themselves, according to European credit management company Lowell.
Lowell has revealed that 81 per cent of parents believe their children learn positive money habits from gaming on Animal Crossing and The Sims. These games feature in-game economies, currencies and incentives to save.
To delve into the possibly untapped potential of life-simulation games in shaping positive financial habits, Lowell has joined forces with financial education charity MyBnk to survey parents on the role gaming could play in financial literacy.
The results suggest that while most parents (89 per cent) actively monitor their children’s in-game spending, many had their children asking questions about saving and budgeting after playing these games.
In many cases, parents believe that their children have learned genuine transferable financial habits from video games. Half (50 per cent) of parents said that their children had learnt about saving money while playing games, followed by:
- Budgeting (46 per cent)
- Responsibilities of home ownership (27 per cent)
- Managing credit (25 per cent)
- Taking out loans (16 per cent)
These results aren’t necessarily unsurprising, especially considering the University of Cambridge says that many children have already started forming their money habits by the age of seven.
Skills such as delayed gratification (that occurs when waiting for a new level or skin to unlock, for example) and even basic habit formation (such as logging in every day to complete a challenge) are all positive financial skills and habits that can form through gameplay.
Encouraging financial education from a young age
John Pears, UK CEO of Lowell, also added: “Talking about money and debt within the family is essential. It removes the stigma around these topics and ensures that children grow up with a healthy understanding of financial responsibility, helping people make less risky and more informed financial decisions. This partnership with MyBnk highlights how we can turn everyday moments, even gaming, into valuable financial lessons.”
“We believe the language of money is a language for life,” added a MyBnk representative. “Starting early with practical lessons in everyday life is key to raising financially confident and responsible young people.
“With greater financial independence for children and young people comes a greater risk of them engaging in such activity with less parent/guardian knowledge. Government-backed or -mandated financial education for young people, including content around gambling, could be an essential tool in awareness raising of such activity.
“Parental controls for purchasing in video games could also be tighter, allowing parents/guardians to more closely monitor the activity of their children’s online spending and activity in-game. This is harder to mandate and difficult to control, but the guidance to parents on keeping their children safe online, including looking at online gambling regulation, could be improved.”
Tips to reinforce positive behaviours
MyBnk has also shared everyday activities to help children learn positive financial behaviours. It says parents can help children understand the real-world value of their in-game spending by getting their children to include gaming spending in their budget and encouraging their children to make choices with their own money.
By involving children in family budgeting, like planning the weekly food shop, to introduce the concept of managing money. Discuss the differences between physical money and digital payments to ensure children understand that ‘tapping’ a card is still spending.
Regarding playing video games, MyBnk also says parents can get children to wait 24 hours before making an in-game purchase, encouraging them to reflect on whether they truly want or need the item, reducing impulse buying.