Can Monopoly Teach Kids Economics?

We all grew up with the classic board game, Monopoly. The thrill of owning half the board, having hotels everywhere, and holding a stack of cash in your hand is positively intoxicating as a child. But have you ever considered using Monopoly to teach your children some basic economic principles? Even for most adults, economics can be obscure. Finding ways to teach children about economics is challenging, but games like Monopoly help make it fun and educational.

We all grew up with the classic board game, Monopoly. The thrill of owning half the board, having hotels everywhere, and holding a stack of cash in your hand is positively intoxicating as a child. But have you ever considered using Monopoly to teach your children some basic economic principles? Even for most adults, economics can be obscure. Finding ways to teach children about economics is challenging, but games like Monopoly help make it fun and educational.

We live in a world of easy access to financing, and in an extended period of unusually low interest rates, and the increased use of virtual money (credit cards, Apple Pay, and Pay Pal, for example). These virtual payment options conspire against us, making it more difficult to teach our children about money. Our children grow up with the perception that you don’t need money; a plastic card in your wallet will get you everything you want.

Thus, finding other ways to teach your children about money is important. Monopoly is built on a handful of economic principles, including supply and demand, the barter system, mortgages, the cost of borrowing, and limited resources, to name just a few.

To make it both manageable and realistic, the rules of the game provide limitations. For example, the prices of properties in Monopoly are pre-determined, and all players start with the same amount of cash. Players learn about economics through the specific lens of the real estate industry, by purchasing properties, and then profiting from them.

The realism of the game makes it a valuable teaching tool. Here are just a few ways Monopoly mimics real-world economics:

• In the real world, people get paid for working, either from an employer, or by running their own businesses. We only get paid if we perform the work our employer gives us, and if we stay at our jobs. Going around the board and passing GO to collect $200 in Monopoly is like working.
• In both Monopoly and the real world, buying property is an opportunity cost. Money you use to purchase a lot or a house can’t be used to buy other things, such as a new car, or a vacation to Disneyland. Once you’ve made the decision to purchase, you no longer have the money for when you land on another player’s lot, or want to buy houses and hotels. This teaches children how to make economically sound choices.
• When you run out of money in Monopoly, you have to choose either to sell what you have, or borrow against it. Selling assets and borrowing from them increases your costs, and limits your ability to earn income. Selling your homes and hotels on the Monopoly board provides needed cash for respite, but reduces how much you make when someone else lands on your lot. When you have to mortgage a property, you can no longer earn anything. This teaches children about financial consequences.

These are just a few examples of how Monopoly provides learning opportunities. You can also use the game to teach your children economic principles such as the barter system, supply and demand, taxes, profit, working capital, and more. If you mistake Monopoly for simple child’s play, you risk missing out on an excellent opportunity to raise your children to be money smart.

For more ideas to help improve your kids’ money sense, purchase the book A Parent’s Guide to Raising Money-Smart Kids from CPA Canada, or contact us for a copy.