We get it. Personal finance can be a dry topic but financial savvy is important in achieving financial independence. Â So if you are ready for a long nap when the talk of money or personal finance arises, youâ€™ll be thrilled to know that video games have added an element of adventure and action to your personal accounting activities.
What types of finance lessons can be learned from games today? Â Lessons on how to manage money, business strategy, and other life and personal finance are just a few examples. So, the next time you pick up a video game for your kids, score one for yourself and battle to be crowned the ultimate king of financial savvy.
Donâ€™t Blow Your Money All on One Farm
One of the first mobile games that almost every American has heard of is Farmville. While the game is not as popular as it once was, the farm business strategy game was filled with lessons on growing your wealth with limited resources.
Just like a real-life job, showing up every day and doing the minimum required tasks leads to a steady stream of income. It is enough to feel like youâ€™re rich in the beginning, but over time that steady income starts to feel less and less. Blow everything on one big upgrade, youâ€™re left with little to improve your farm overall. This is similar to investing in yourself in real life.
You can always use your income on a new car, electronics, or new clothes. But, you can also save your income for better rewards later on. Learning to save and allocate resources is tough for most people, but if you can make it on a Farmville budget, you are should be able to learn to budget your real money.
Focus on Your Resource Bottlenecks
Clash of Clans is another popular mobile game today where players build bases and battle others to hopefully steal their resources and ultimately determine who has the strongest army and best defenses. While few of us are involved in real defense, the idea of resource management is heavily addressed in this game and one that comes up in our lives almost every day.
Play Clash of Clans for about ten minutes, you will find the biggest initial resource constraint is the builder unit, which is used to build a new building and upgrade your base. You can spend real life money or save gems in the game to add more builders, but then you will find yourself constrained by in-game gold and elixir, resources used to upgrade and build units and buildings.
In real life, you will find yourself constrained by resources as well. You can only work so many hours per day and the biggest reason most of us donâ€™t travel and improve our lives is that we lack the resources, time and cash. If you can find a way to side hustle and outsource some projects, you may find the ability to have more of both. I want more time and money, donâ€™t sell yourself short. Anything is possible!
Being Strongest Doesnâ€™t Mean You Will Win
Star Wars Heroes of the Galaxy is a top game on both iPhone and Android. The game allows you to build teams of Star Wars characters to battle other players while at the same time collecting and strengthening your stable of characters to choose from.
It is tempting to pick a few favorite characters and build up the strongest team possible, but in this game and life, the strongest do not always win. The tortoise and the hare teach that sometimes slow and steady wins the race. In this Star Wars game, strategy and brains come out ahead of brute force.
In your finances and career, make smart, strategic decisions with a long-term focus. Donâ€™t just go for a favorite short-term win. Instead, focus on the strategy and remember that retirement savings, like much of your financial life, is a marathon, not a sprint.
Sometimes Calculated Risks Pay Off
Grand Theft Auto is known for violence and adult themes, but with real-world physics and movie-worthy plot lines, players can learn a lot about risk while enjoying the Grand Theft Auto series.
In the game, players come across opportunities to earn more by undertaking risky projects and adventures. In business and investing, risk comes into play in a big way.
Sure, you can put your money in a bank account and earn 0.1% interest without any risk and little work, but investing in the stock market, which comes with more risk, often leads to returns around 7%-8% if you invest in a low fee, broad market index fund. Everyone isnâ€™t the same, but I would rather take a little risk and get about 70 to 80 times the return.
Time Is a Precious Resource
Time is a precious resource, and as many Pokemon Go players found when the game went viral in 2016, it takes a lot of time to win some games. Winning in this game requires a lot of time walking around trying to catch each of the mythical species featured in the game.
While the game is fun and collecting the cute little animals like Pikachu and a seemingly unlimited supply of Zubats, spending hours and hours playing the game takes away from your opportunity to earn more elsewhere. This use of your time is called an opportunity cost by economists. When you are playing this game, what else could you be doing with those minutes and hours? Seriously think about that every time you pick up any game. While they are fun sometimes, they also take away from your ability to earn more elsewhere.
There Is no Reset Button
One thing to keep in mind when comparing your real life finances to those in a video game is the reset button. Taking a risk in Grand Theft Auto is fun, but the worst thing that can happen is losing your guns and restarting at the nearest in-game hospital with fewer dollars in your virtual wallet. In real life, financial risk is very real, so always consider that when making an investment and personal business decisions.
But also keep in mind that like games, managing your money can be fun. â€œGamifyâ€ the way you look at your money with personal challenges and inspiring ideas to better your finances. If you win, youâ€™ll be winning on all sorts of levels!