Did Monopoly Teach You Anything About Managing Money?

by Scott on March 1, 2009

Monopoly in the Park
photo credit: HarshLight

Countless hours were spent as a kid playing my favorite board game, collecting rent on apartments and hotels while negotiating for Park Place and Boardwalk. What type of Monopoly player are you? Do you play with the properties you land on or do you like to barter and make deals? Playing Monopoly might seem like a childish game, but it definitely has some sound money managing principles that teaches you to stay within a budget and not stretch yourself thin. In Monopoly if you can’t pay your rent, you must declare bankruptcy. In the end the bank forecloses on your property and the other players can pay off the liens.

The game of Monopoly may have been the first time that you learned some basics about budgeting your money. The rules are easy to follow, but how you play the game is up to you. You can simply roll the dice and pay rent or you can build up a vast wealth of apartments and hotels.

Even though Monopoly is just a game, what are some money management tips we can learn from it?

1. Cash is king. The bank in Monopoly only accepts cash. Building up passive income through property rentals can help you achieve your goal of building apartments or hotels. Today, you are payed by your employer in cash and it’s up to you on whether you invest the money or just pay your landlord rent.

2. Negotiate. You won’t get anything unless you ask. That goes for a raise from your boss or Board Walk that your friend currently owns. Will they sell it for $300 or $1,000? It probably depends on how they are doing in the game at the time. If you don’t attempt to negotiate and make a deal, you might not win the game. If the asking price is $2,000 for your future wife’s diamond ring, will you ask to negotiate? Did you?

3. Pay your bills on time. It’s funny how Monopoly imitates life. When you land on luxury tax, you must pay it or start selling off properties. The game comes to a stop until you take action. You don’t have a chance to pay the minimum on a credit card and move money towards another debt.

4. Being a landlord can be fun.
Owning hotels on Park Place or Boardwalk can be very lucrative when a fellow player stops on your property. Owning property can create a passive income stream that can pay for your retirement or children’s college. In real life you obviously want to charge a market rate and not something expensive like Boardwalk that has the potential to put your tenant into bankruptcy.

5. An emergency fund is always needed. One roll of the dice and you could wind up in jail or owing a huge luxury tax. If you’ve overextended yourself and purchased property without an adequate emergency fund, you’ll wind up having to sell something. Having an emergency cash fund or rainy day fund can help you navigate through tough times. Having an emergency account in real life can help you fix a flat tire or purchase a new washing machine.

Do you have a favorite game you played that taught you money management skill?

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{ 6 comments… read them below or add one }

1 Abigail March 1, 2009 at 1:21 pm

These are good points. But what I really remember from Monopoly was mortgaging things until you’re broke. It seems to me that lots of Monopoly players spent every last dollar on properties, then wouldn’t be able to pay rent when they landed on someone else’s spot.

At least to me, the point of the game always seemed to be that you should buy buy buy property, overextending yourself. And if you then needed money? Mortgage one of your properties. If you needed more money? Keep going, until you couldn’t access any more money.

Kind of reminds me of the current crisis.

2 Brandon March 1, 2009 at 6:46 pm

I swear that Monopoly helped me decide I wanted to own my own businesses. It helped mold me in a strange way. Great post friend! It got me thinking about the good old days. ‘
BTW, I finally got you on my blogroll! You have a great blog here!
Peace,
TAM

3 Penelope Pince March 1, 2009 at 8:30 pm

My sister, cousins and I loved Monopoly as kids and would play for hours. But we always just bought all the properties we could till we went broke and then started cutting deals with each other.

Last summer, one of our cousins came to stay with us for 3 months and we pulled out our Monopoly game and I’m still playing exactly the same way – buy everything I land on and hope I don’t go broke – and I did go broke almost every time. Of course, I’m not this way in real life; games are an outlet for my unfrugal urges.

But now that we were finance and frugal living bloggers, we had the idea of creating Monopoly game expansions that parents can use to teach children money management skills.

We’ve created several which come with rules and forms that parents can print out to use to educate their kids on finance. If you don’t mind my sharing them:

Monopoly Game Expansion #1: Personal Savings Account
Monopoly Game Expansion #2: Personal Checking Account
Monopoly Game Expansion #3: Certificate of Deposit
Monopoly Game Expansion #4: Personal Credit Card Account
Monopoly Game Expansion #5: Income Tax Edition

We had a really good time test-playing these expansions, and actually have a few more that we still need to finish making and put up. I had forgotten about them till I read your post. Thanks for the reminder! :)

Cheers,
Penelope

4 Miranda March 2, 2009 at 9:00 am

I agree that Monopoly offers some good learning points, but like many others, we ended up mortgaged and broke. Actually, one thing I remember is one guy mortgaging A TON and buying up everything, and none of us could afford rents when we landed on his place. So then we’d have to mortgage what we had to pay him, or turn over our own properties. After about 45 minutes, it was just depressing because he was basically a slumlord and we couldn’t get out of the hole.

5 Gledwood March 2, 2009 at 12:47 pm

Good points but no I don’t really think Monopoly does teach you about managing money. To be honest I think the element of chance is greater in Monopoly than in the real world where you make your own luck…

6 Happiness Is Better March 18, 2009 at 6:47 am

I think I had a better experience than some of the other commenters on this post. Perhaps it was because I was the slum lord. It was definitely a good starter game, but I feel Cashflow is slightly more realistic. Have you guys and gals played cashflow? If so, what did you think?

Thanks!
-Dustin

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