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The Monopoly Money Experiment! Budgeting for kids

I've talked to my daughters about budgeting before, however, it wasn't until I did something really simple that they really appreciated the need for budgeting as they grow up.

Monopoly Money Experiment

The very simple experiment essentially started with me giving both of my daughters some Monopoly Money.

I gave each of them 8,000 (using different notes). I told them to imagine that they were both adults and that this was a lot of money. I then asked them what they'd do with it.

As the only money decisions they've had to make as kids is to consider how much to invest, spend or give, they talked about how they'd split the amount into those three buckets.

This is where it started to get interesting! I started to show them how the real-world works and where most of this money would actually be going.

Paying Tax ...

I told them before they could do any of that, they each needed to give me 2,000 back as they have to pay their tax.

They didn't like this but they remembered that adults do need to pay tax (as it was one of the stories in Grandpa's Fortune Fables book, 'The Money Birds' story).

They were still OK as they still had 6,000 each.

Now down to 6,000!

Paying for accommodation ...

Next, we talked about where they might want to live. For this, I took another 2,000 from them both.

This money would be for rent or to pay the mortgage.

They now saw their money go from 8,000 to 4,000 each. They still were ok as 4,000 seemed like a lot to them.

Now down to 4,000!

Paying for bills ...

I asked them, "In your house, do you want electricity, water, Apple Music, Netflix, and gas for cooking?"

They said "Yes" to them all. I therefore took another 400 from them both.

Now down to 3,600!

They struggled to think of other expenses so they were happy.

But there was more ....

Eating ...

"Do you want to eat?" I asked them.

"Yep" they both replied!

"Great! Each give me another 700 for the supermarket, takeaways and going to restaurants" I demanded

Down to 2,900!

Education ...

As we are in Thailand, we have to pay for international school. So I asked them if they wanted to stay at their current school or move to another school. They really wanted to stay at their current school. So I took another 1,000 from each of them.

Down to 1,900!

At this point they were getting annoyed that so much money was going but still felt 1,900 was a lot.

I hadn't finished yet ....

Transport ...

We have a car and they like having a car.

I reminded them of all the expenses of owning a car. They enjoyed this part as one of their favourite stories I've told them was 'The Dragon That Pooped Too Much!' which is all about car expenses.

I took another 300 from them both

Down to 1,600!

Clothes, presents, and stuff around the home ...

Down to our last regular expense. I grouped the other expenses that we pay for. This included new clothes, presents for friends and family, replacing things that break around the house or new things for the house.

I took another 300 from them.

Down to 1,300!

I could see the disappointment in going from 8,000 to 1,300 so quickly. They still felt that 1,300 was quite a lot and they could save that money. My youngest (8) said that she'd still be saving 1 out of every 10 she received (the first rule of wealth!). She was right, however, she hadn't taken into account one last category of expenses 'Wants'.

Budgeting for Kids: Wants vs Needs

In the experience so far, I had strategically focused on the needs (granted, things like Netflix and Apple Music could fall under 'wants'). I then talked about the things we really enjoy spending our money on and asked them what they'd like to spend their money on. They choose the following:

  • Holidays, 700 each (average over time)

  • Cinema, 50 each

  • Sport activities (e.g., football practice, swimming), 50 each

  • Giving to charity, 100 each

They ended up with 400 each!

This is the amount they could save / invest to start growing their Blue Tree Forest (as we call our investments Blue Trees, with the goal of growing a forest which produces more seeds which will then cover some of the expenses).

Although, sadly for them, I told them that they could invest all of that money. They might need some money spare in case of an emergency!

[I note that the above is for illustration and not a true reflection of the initial income, the exact expenses or the final amount we save as a family]

Additional lessons that this experiment taught

Apart from just highlighting the different expenses that they will need to be aware of, the experiment had a few extra bonuses:

Appreciation for what parents do: This really helped my daughters appreciate that my wife and I spend a lot of money to keep the household going.

Saving before spending: Whilst the experiment had 'savings' as an end result, I told my daughters than my wife and I actually agreed on an amount that we want to save first (as we follow the First Rule of Wealth). We then control our expenses to ensure this can happen. For example, if we didn't feel it was possible to save / invest money over the year, we would find ways to reduce our expenses (live in a smaller house, less take-aways, less holidays etc).

Managing expenses: I used this experiment to highlight that our goal as a family is to find ways to generate money to cover all the above expenses without having to work every day. This requires us to ensure our expenses don't get too large and that we find ways to generate money.

Lifestyle creep: I explained that when people earn more money, they end up spending more money. As they spend more on one thing (nicer house), they spend more on other things (nicer furniture, nicer car and shop at more expensive supermarkets). As the expenses go up, it makes it harder for them to save, even though they earn more money. This is known as the Diderot effect.

Tips for doing this experiment with your kids

Personalise based on your lifestyle: Whilst I made up the numbers above (i.e., these don't represent exact pounds or dollars), the relative amounts for expenses are reasonable. If you do this for your kids, adjust the relative amounts based on your lifestyle, i.e., if you love cars then increase that amount or if you camp rather than stay in hotels, then reduce the amount for holidays etc.

Decide what is a want and need for your family: I note that things like clothes and cars could fall under 'wants' rather than 'needs'. I personally hate shopping for clothes and we now see a car as a convenience rather than something that we really want, hence these are both 'needs'. You can decide where these items go based on your preferences.

Don't have Monopoly: If you don't have Monopoly Money at home, then you can cut out pieces of paper to create your own.

Teaching kids about money using Monopoly
Click to read blog

Although I would strongly recommend that you consider getting Monopoly and playing it with your kids. There are so many great money lessons the game can teach them.


Whilst I have spoken about money to my daughters using games and stories, this experiment had one of the biggest impacts on them. They really got to see that most of the money adults receive, they don't get to keep (sadly).

I admit that budgeting isn't the most enjoyable topic for kids but it is essential. Managing expenses is so important. For many adults, they earn then start spending. It then takes them a while (sometimes years) to realise they need to start saving. By that time they have adopted a certain lifestyle and it is really hard for them to reduce their expenses. It's much better to understand and control expenses from the start.

I hope you try this experiment with your kids (especially if you have older kids).

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p.s. I have a favour to ask! I'm super keen to get to 200 reviews on Amazon for my book, Grandpa's Fortune Fables (currently at 189 on Amazon UK). Therefore, if you have read the book, and enjoyed it, I would really appreciate it if you could spend just 1 minute writing a review. Thank you in advance.

Book to help kids learn about money


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