2 ways to teach kids about the risks of gambling

Whether you teach your kids much about money or not, this topic needs to be drilled into their mind – Gambling is bad! Lottery is one of the worst forms of investment! Don’t believe us? Warren Buffet agrees with this and shows how he taught his children the losses that can occur as a result of gambling. If there is anything that needs subliminal marketing – its this lesson. Your children will thank you for this later in their life.

Lottery

The lottery is a form of gambling. It’s a zero-sum game and there is usually just one winner in millions of participants. We start with the topic of lottery because it is accessible & ubiquitous – which means any child can observe their parents playing the lottery. This could give them the wrong idea! It is important to teach your kids how bad of an idea the lottery really is. Here is a fun idea: create your own lottery game (from their allowance money) :

The Lottery Option

Step 1: Announce to your kids that they now have an option to spend 50% of their weekly allowance into the game of lottery. If they win the game, they will win 20 times of what they have spent (Feel free to alter this recommendation to your taste).

Step 2: Explain them the game.

  • The kids can pick up to 4 numbers from 2 to 12 (repetitions possible) – for example (12, 3, 12, 10 must be in order). They need to write the numbers on a piece of paper clearly. The order of the numbers is important!
  • Each set of numbers (4 numbers per set) will cost them $2 from their allowance/savings.
  • Take the money from them (This is important, the children should understand that there are consequences to their choices: the same money they spent on stupid odds, could be used to buy theirroulette-1253621 favorite toy.)
  • Explain them to this every time the kids want to play this game: The odds of them winning this game are 1 in 1.5 million every time they play the game (the odds do not change if they play the game multiple times). They must understand it is highly unlikely they will ever win.

Step 3: Play the game & record the history:

  • Every weekend you will take two dice and roll them 4 times and record the numbers (in order). If the numbers that the kids have selected match the roll, then they would win 20 times what they have invested. If not, they loose the money.
  • Keep a record of how much money the kids have lost playing the Lottery. Explain to them what else they could have done with that money to make it grow.

Step 4: Stop after 4-8 weeks of this game, especially when kids seem to understand the point and are reluctant to put their money into the lottery pit.

Gambling

Let’s get this straight – Gambling is neither an investment nor a way to earn a living. Adults sometimes may indulge in recreational gambling, especially when they have money to spend, however, if you indulge in this and you have a problem. Children need to understand this from an early stage. Just talking to them that gambling is bad along with the lottery activity we suggested above may suffice. Or you could go the Warren Buffet way and simulate a gambling situation to help them understand.

 

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