Growing up, I didn’t have the benefit of having a rich family. My parents were divorced and I was raised by my mom who made around $30k a year. When I was older, I also didn’t have the benefit of a high paying job. Yet somehow I managed to provide for myself, pay my way through school, and graduate with a bachelor’s degree without any debt. I also seemed to have more money than my friends that higher paying jobs than I did; my income was lower than theirs, but my bank account was fuller than theirs. How could that be?

No, I didn’t do anything illegal. I just developed very good personal financial habits. I had these habits ingrained into me from a very young age, but I didn’t receive any allowance as a kid, so I didn’t have my own money when I was young. My mom and my friends never really spoke to me about how to save my money either. And I also wasn’t reading any personal finance books or blogs back then.

I learned a lot of what I know from playing Neopets.

For those of you who don’t know or don’t remember what Neopets is, it’s a website that allows you to have a virtual life with virtual pets, virtual money, and virtual items. Think The Sims, but browser based and free. I’ve been playing Neopets on and off since the early 2000’s when I was a child and I still play it today as a fully fledged adult. Lots of people would say that I’m wasting my time, but I disagree. Here are five things that I learned as a child from playing Neopets that translated into real world results.
1) Money doesn’t come from thin air
Like many other games, Neopets has its own economy with virtual currency, neopoints. If you wanted more money in the game, you have to work for it. Can’t have your parents buy things for you here like they could in real life (unless they played the game too). To someone like you and I, this is less than profound, but to someone who was ten years old, this helped me understand why my mom wouldn’t buy me all the toys that I wanted.
2) You can either work hard for your income or you could work smart for your income
You could either work for your money or have your money work for you. In Neopets, one of the easiest ways to make money was by playing games, however it’s pretty time consuming and you’re not rewarded very handsomely. You could risk some of your hard earned money and become an aspiring entrepreneur/store manager at the benefit of a much greater return. You could invest in the Neopian stock market and look to earn money there (way less risk and a lot less complex than in real life, but the basic concept still remains). You could look to generate passive income, which would earn you money around the clock with minimal effort. The more passive income you had, the more time you can devote yourself to doing other things while not having to worry about money. Just like in real life, how efficient you are at generating income was up to you.
3) Income disparity is a real thing
In Neopets, there are those who are super rich, those who are super poor, and everyone in between, just like the real world. Here’s the thing though, everyone starts out with the same empty bank account, but it’s up to you whether you want to be rich or poor. Some figure out what they need to do to earn money and rocket their way up to becoming millionaires. Others have played this game for years on end and still struggle to hang on to a few thousand neopoints. Since everyone starts on equal ground, the income disparity arises not from one’s circumstances (e.g. being born in a rich family), but from how well money is managed. Which side of the coin you fall on depends on you, which brings me to my next point.
4) The secret to growing your net worth: spend less than what you make
If at the end of the day you added more money to your bank account than you took away from it, you’ll eventually be a millionaire. The way it works in the game works the same way in real life. The biggest obstacle to building your net worth isn’t how are you going to make more money, it’s how you’re going to keep all of it. The number one reason people can’t hang on to their neopoints is because they keep seeing things that they want and they decide to keep spending every penny that they have, leaving them broke. Many first generation millionaires didn’t all of a sudden stumble upon their fortunes when walking down the street one day; they saved for it. (The other lucky bastards got to inherit their money, but my point still stands.)
5) Always shop around
The first deal you see isn’t always the best one. Just like in the real world, consumers in Neopets have imperfect information about the market (we don’t know all the available prices we could purchase at), but that doesn’t mean that we’re doomed to the first price we see. There’s always the option of going to other shops first and seeing what others list their prices at. If you want your net worth to grow at a significant rate, then don’t needlessly throw your money away by not taking a few moments of your life to see if a better deal doesn’t exist. With the advent of smartphones these days, all it takes is an internet connection and three seconds to scan a barcode to find out what everyone else is selling something for. Those small savings add up to a significant amount of money over time.
And there you have it, the five basic fundamentals of personal finance that I had ingrained into me as a child from a video game. Playing Neopets allowed me to learn how to manage my money and control my spending (and make mistakes) with virtual currency before I got my hands on any real money, putting me ahead on the personal finance experience curve.