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How to Learn Basic Financial Principles From Animal Crossing

Tools | April 24, 2020 | By Tina Nguyen, MBA

I don’t know about y’all, but with COVID-19 and the stay-at-home order, I’ve had to come up with ways to stay sane. After seeing the Snapchats and Instagram Stories about Animal Crossing: New Horizons, I decided to buy in and see what the hype was all about. Little did I know, I’d be obsessively playing it every day after work. 

I’m not stuck in quarantine…I’m currently living on a deserted island (which I’ve named Quarantina), fishing, catching bugs, and working on my island’s infrastructure. After playing the game, I’ve realized there are aspects of the game that set kids up with some basic financial principles that are beneficial and can be applied to the real world. Hear me out…

I’m not stuck in quarantine…I’m currently living on a deserted island (which I’ve named Quarantina), fishing, catching bugs, and working on my island’s infrastructure.

Mortgages & Loan Payments

The currency on the island is called Bells. You’ll need it to purchase items, pay construction fees, and pay off your loans with Bells. That’s right – there are loans! You’ll be given a home loan to upgrade from a tent to a house – sound familiar? It’s essentially a mortgage without credit checks, interest rates, and payment dates. In order to expand your house (additional rooms and space), you’ll need to pay off your current home loan. This concept gives kids a brief background about what it looks like to buy a home.

Working & Trade

You’re probably wondering how do I pay off my home loan or even obtain Bells? Well, that leads to the next financial concept: buying and selling goods. There are plenty of things to do around the island in order to make Bells. You can sell fish and bugs you’ve caught or sell furniture and items you don’t need. Just head to the island store, Nook’s Cranny, and sell whatever you want. Tommy and Timmy (the store clerks) will tell what they’re willing to pay. The game also provides a tip that selling fruit at another island will yield a higher return than selling on your own island.

Savings & Cash

Animal Crossing also introduces the idea of savings. There is the option to set aside money in your savings through the ABD (Automatic Bell Dispenser) or you can keep Bells in your pocket to spend on everyday things. At the beginning of the game, I made it a goal to set aside 10,000 Bells in my Savings each day, in order to have those Bells to pay off my loan or put away an emergency fund. Through this aspect of the game, kids learn what it means to deposit, withdraw, and save.

Investments & Risk

I really like the turnip selling aspect included in the game, because it gives kids the chance to learn about investment, when the right time to sell is, and how to turn a profit. On Sundays, Daisy Mae will come to the island to sell her turnips (sold in a batch of 10). You can purchase and sell these turnips for a higher price, in hopes of making a profit. I feel like this aspect really teaches you the concept of investing and whether you’re risk-seeking or risk-averse. In my first encounter with Daisy Mae, I purchased only 1 batch of turnips totaling 990 Bells (99 per turnip). Each day, there is a set selling price for the turnips, however, if the turnips aren’t sold by the end of Sunday, they rot and are useless. 

On the first day I checked, the selling price was 79 Bells. I knew I didn’t want to sell at that price because I wouldn’t be making a profit and would be at a loss. The second day, the selling price was 110 Bells; since I’m risk-averse, I decided to sell that day, reaping a profit of 110 Bells. I checked the following day to see if I made a good decision, only to find out the selling price was 200 Bells. I could’ve made a higher profit on the turnips if I was more risk-seeking.

Education & Entertainment

Animal Crossing is a great game to teach kids the fundamentals of finance. Even better, it can help them to see the benefits of becoming financially responsible. Imagine for a moment all the kids who are running around the house saying, “I finally paid off my home loan!” or “I need to save for an emergency!”, all because of latest game on the Switch. Not a terrible result, right?

In conclusion, games like Animal Crossing can truly be used as a teaching tool and not just for entertainment. Sure, there are some addictive tendencies involved, but overall there is a case to be made that entertainment can be pretty educational after all.

Games like Animal Crossing can truly be used as a teaching tool and not just for entertainment. Sure, there are some addictive tendencies involved, but overall there is a case to be made that entertainment can be pretty educational after all.

About the Author

Tina Nguyen, MBA

Account Manager, Clean Finances

Tina joined the Clean Finances team in 2018 after completing her M.B.A. from the University of Texas at Arlington. She also has her B.S. in Psychology with a Minor in Business Administration and Sociology from Texas A&M.

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