August 16th, 2011
**It?s Parenting Week here on the Credit Karma blog! Each day we?ll bring you a post all about tips and tricks for parents and kids alike.**
Imagine this: You?re back-to-school shopping with your teen, when he sees the perfect backpack to haul all of his school supplies. It has tons of storage and clever compartments. It has enough room for his laptop. It?s in his favorite color. The problem? It?s way out of your price range.
You try to explain that you have a budget, but your teen still wants the backpack. What do you do?
How about letting him see what it really means to budget and spend money? JA Finance Park, a new free online simulation game created by Capital One and Junior Achievement, will teach your teen how to budget for real-life expenses in a fun way.
Why it?s necessary
According to a Capital One survey, 46% of teens don?t know how to make and stick to a budget. Parents and teens have differing expectations when it comes to the cost of back-to-school supplies this year: while most parents expect to spend more than $100 back-to-school shopping, less than half of teens surveyed expect their parents will spend that much.
This gap in expectation could be due to the fact that students rarely get to see the budget of what Mom and Dad spend on back-to-school supplies. Now more than ever, kids need to be educated on the importance of making and sticking to a budget. Capital One and Junior Achievement decided to do something about it with the creation of JA Finance Park, a simulation game that assigns a real-life scenario to your teen to teach him money management.
How it works
When your teenager sets up his own JA Finance Park account, he?ll get to pick out his house, d?cor, car, cell phone and more.
After making his selections, he?ll be reminded that those choices cost money and he?ll have to make a budget to see what he can afford before picking that expensive convertible.
JA Finance Park will randomly assign your teen a life situation?a job, salary, household size, etc.?represented by a virtual I.D. card, and have him start over when choosing his expenses.
From there, he?ll determine how much he?ll have to spend each month on the things that his virtual family needs and additional expenses. He?ll be guided through the steps of budget creation and execution and be rewarded by a point system in the process.
It?s educational, but short.
JA Finance Park teaches teenagers several different aspects of money management, such as:
- Calculating net monthly income
- Budgeting for expenses wisely and distinguishing between ?wants? and ?needs?
- Monitoring basic stock market investments
The game puts some fun into the process by giving players points for a job well done to encourage smart financial moves.
One of the drawbacks of JA Finance Park is that it lacks the length and breadth of other games to keep teens interested long enough to learn lessons in depth. After a few sessions of choosing budget items, deciding on percentages and making purchases, the game comes to an end. Perhaps Junior Achievement and Capital One plan on extending the game in the future, but at the moment, it lacks the space to teach some important principles, such as:
- How to deal with financial emergencies
- How to build credit
- How to choose financial products, like credit cards and loans
The Final Word
JA Finance Park may not have the fast-paced appeal of Angry Birds, but its educational angle makes it a good choice for parents who want to initiate money management education with their teens.
Games like JA Finance Park should be just one tool in your teen?s financial literacy tool belt. Make sure that you encourage the real-life experiences needed to take his skills from virtual reality to actual reality. Next time your take him shopping, show him your spending budget so he can start seeing those lessons in action.
Disclosure: Credit Karma has not received payment or other compensation for reviewing JA Finance Park.
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Source: http://blog.creditkarma.com/kids-and-money/review-ja-financial-park-teaches-budgeting-to-teens/
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