Click here for a printable version of our Game for Kids: Intro to Personal Finance (12 pages).
Module 6 – Risk
Hello, and welcome to Module 6: Risk. See Page 10 of the game for the Risk Module.
Risk is such an important part of financial planning, I knew it had to be included in this game. The problem is, kids can’t relate to the financial risks that adults face – it’s simply not a part of their worlds yet. Luckily, there are lots of ways to understand the concept of risk, and to encourage the Stop and Think mindset when faced with decisions. My hope is to encourage our children to consider risk often, in their own environments, so they will grow up with stronger-than-average “Should I do this?” filters.
The top third of the Risk Module has a paragraph for your child to read, then a matching game. Older kids should read on for a more exhaustive explanation of how to weigh options. Afterward, please ask your children the questions on the bottom of the page to hear their ideas for how to handle realistic risky situations. Talk through their answers and suggest solutions if your kids are stumped.
What I learned
- My ten-year-old daughter Jojo rocked the questions at the bottom of the page. The first question is: “Imagine you have guests coming over, and one of them is a toddler who puts everything in her mouth and throws toys on the floor. You’re worried she might break your stuff. What can you do to protect your favorite things before your guests arrive?” In my mind, the bare-minimum answer for this one is: “I’d put my special things away so the baby couldn’t ruin them.” Jojo did say that, but then surprised me with her additional ideas: “I would check the floor for anything sharp, since you said she likes to put things in her mouth.” Wow, great idea! Scan the area for baby-proofing while you’re cleaning up your special things. “I would also get out something safe for the baby to play with so she’d have fun.” Man, kids are so great.
- The third question, “What do you think is a risky thing to do with money?” is a flexible one. Jojo’s answer revolved around the physical security of money (which is really the only way she can relate to money and risk at this point in her life). She said she would keep her money organized and tucked away, out of sight. She said she wouldn’t put cash in a small pocket, where it might fall out.
- If you’re going through this module with an older child, encourage them to dig deeper on this third question. Encourage them to think about why it’s a bad idea to use their debit card on a shady website. Tell them that if they let a friend borrow $20 they may never see that money again. Explain the importance of reading fine print – if something sounds too good to be true, it probably is!
Next up, Module Seven: Phases of Life
Here is a blog from our archives, Risk Management in Your Financial Plan, if a parent, grandparent, or older teen would like to read a bit more about risk.
If your child would like to dive even deeper into personal finance, check out this app offered by Mint.com.