In our last article, Examples of How To Teach Finances To My Children, we talked about Alfred Edmond, Jr.’s clever method of teaching his children at a very young age about the importance of having assets that outweigh your liabilities, through the game of Monopoly. What I didn’t tell you was that my husband and I began using a similar method on our children with the same game. One day, only one of our sons was at home, and he demanded that we stop focusing so much on work and spend some family time. (Yes, I more so than my husband, struggle with work/life balance. I’m working on it…). Nevertheless, we played Monopoly. Little did my baby boy know that he was about to get some heavy lessons during his family fun time. Now, knowing my son, there was no way we could take such a hardline approach with his lesson as Mr. Edmond did with his son. However, we were able to get in some awesome ah-has for a brother. Let’s look at the list of lessons we were able to cover in that particular game.
Because my son had been reading books that talked about the importance of investing, he was solely focused on using all of his money to buy properties and houses. Theoretically, that’s kind of nice, but just like in real life when your properties are sometimes vacant, we weren’t landing much on his properties; and it left him cash poor. We explained that being asset rich and cash poor can put you in situations where you don’t have the funds to take care of general needs or unexpected occurrences like paying the utilities or an unexpected tax bill. That was a rough experience for him. So sticking to a manageable formula like living off of 80% and investing 20% (or even a little more, if your budget can handle it), is a great idea.
Lesson 2: One Paycheck Will Land You in Depression When It’s Not Enough.
When my miniature man wasn’t getting any rent money, he found himself just waiting to pass GO. Most of us know what that’s like. You get paid on Friday and pay all of the bills you can pay so that by Wednesday, you’re counting down the days for your next check again. That’s what my son’s experience and Alfred Edmond, Jr.’s daughter experience was. They had only one source of income and were always looking forward to that next meeting with GO so they could get a little relief…., until they had to pay rent again. Hamburger! (Those of you who used to watch Def Comedy Jam back in the day will appreciate that). So, the moral of this story is, set yourself up to always have multiple streams of income and not rely upon one check to which you’ll undoubtedly become a slave. If you practice the 80/20 rule consistently, you can do this with minimal effort.
When my son wanted to buy a house for his properties, he allowed my husband, The Bank, to find the deed and tell him how much he owed for the house. But, what my husband was doing was charging my son more than what the deed said he should pay for the house, until the mommy stepped in and said this is some frackle-lackle bull! I, acting as his lawyer I guess, demanded the deed and made my son read every line of the deed, versus skimming for numbers, like he’d tried to do. Once he understood how the deeds were written, he kindly told The Bank, you owe me such and such, because you over charged me for all of these other properties. I intend for him to never forget this empowering lesson of the value of having knowledge for yourself versus relying solely upon that of others. No blind followers coming from this house! No, indeed!
Hopefully, these examples make it clear how a game can completely give your children a far better perspective and understanding than most of us received during our upbringings. Since that game, my son, understands a little better why we’ve had him reading certain books and researching and investing in stocks of the stores he likes to patronize. In a future post, we’ll cover some of the other jewels that came from that particular experience. One was the glimpse into how most of us are burdened by having more expenses than assets and having to lose our assets to cover those expenses.
But for now, tell me what you learned from these two Monopoly game stories. Are there any other games or ways you think are equally or better at teaching some of these lessons? I and other readers would love to learn from your experiences. Until next time, be fruitfull!