Games have been a part of society practically since the dawn of time. From the days of ancient Greeks and Romans, the Chinese Empire, and Aztec civilizations, games have played a critical role in how we learn, relate, and absorb information—particularly for children. In modern society, “gamified” learning is on the rise in a somewhat surprising way: it’s being used to teach kids about finance.
Some of the oldest games in the Americas date back almost 5,000 years, with evidence of prehistoric dice games being found in Chiapas, Mexico. Games have come a long way since then, and some have done wonders for teaching kids about critical aspects and concepts about finance. Just look at games like Monopoly or Life, which have sustained longevity (not to mention popularity) in the modern era.
Gamified learning as it relates to teaching children about finance, money, and investing is currently enjoying a renaissance. The advent of digital and mobile technologies, along with the emerging emphasis on Emotional Intelligence (EQ) in investing, is making kids love finance more than ever.
Games are Biologically Rooted
It’s important to understand that our propensity for games is rooted in biological human nature. For millennia, humans lived in hunter-gatherer societies. There were no farms, offices, or factories that forced people into structured routines. During that period of human development, the primary method of learning was through playing games. This was true especially for children, and remained the case until about two thousand years ago. Children would play hide-and-seek, manipulate rocks and sticks, and interact with nature in the form of “games” to learn about their surroundings.
This type of information absorption, synthesis, and analysis is the natural, biological way that we have been programmed to learn. However, society began straying from this model with the advent of the agricultural revolution. In this new economy and way of life, a rigidity of systems became paramount. Crops had to be planted and harvested at set intervals, and animals had to be herded at the right time of year. The Industrial Revolution only exacerbated these conditions, seeping into the educational system. Games were largely seen as a waste of time, and more emphasis was placed on rote routine and memorization.
Gamified Education is Coming Back
The result of the Industrial Revolution was that in industrialized nations, education was no longer viewed as something that was meant to be fun. Games went by the wayside, and while the new generation had more knowledge than ever, many lacked skills and understanding of basic finance. One needn’t look any further than Baby Boomers, one of the first generations educated under this new model, to see an example of how unprepared people now are for retirement. The average household aged 51 to 65 has less than $200,000 stashed away for their golden years.
How much of this is due to a deficiency in financial education, as opposed to other factors, remains up for debate. But most financial advisors and professionals would agree that people, in general, are financially ill-informed and undereducated. That’s exactly why innovators, technologists, and financial professionals are bringing in gamification to make learning about finance fun and interesting again. In other words, we’re returning to learning about finance the way we used to—through games. The difference is that today, much of learning now takes place in an interactive way via mobile technology and video games.
Tomorrow’s Gamified Finance Education
The evolution of gamification in finance education resembles how youth learned and acquired new skills in hunter-gatherer societies. Children would gain skills in order to up their “experience” or “power” before progressing to the next level. Kids in primitive societies might first learn how to track a deer, then impersonate one, and finally how to kill one. Ask any boy or girl today, and they’ll probably tell you that while they don’t enjoy school, they love to play games.
If you take child psychology and place it into historical context, it’s easy to conclude that gamification is the best methodology for helping kids learn about finance, and will most effectively give them the tools to make financial progress later in life. With technology, gamified learning is more dynamic and engaging than it ever has been. Children can play games that simulate driving a car, and after a while, they actually want to learn how to drive a real car. These same principles can be applied to finance, creating more advanced digital games similar to Monopoly to achieve similar results. For instance, think of micro-economies within games like World of Warcraft that have the potential to teach important financial concepts like supply and demand, resource management, and investing.
More advanced gamification frameworks are already being developed. Take Octalysis Prime, which creates a virtual gaming environment where people can visit certain areas to “power up” their financial knowledge and literacy. There’s no denying the impact that gaming has on our basic human nature. As gamification enjoys a renaissance and applications like Octalysis Prime evolve, the next generation of Americans might just play their way to being the most financially literate generation ever.