Built to click: Digital financial literacy for kids starts with the brain

If your child plays online games, you’re likely no stranger to requests for coins, credits or upgrades. You also know that reasoning with a kid mid-game is like trying to bargain with a toddler in the candy aisle.

“When coins or credits hit their account, it’s like an instant dopamine rush,” says Dr. Roseann Capanna-Hodge, a licensed school psychologist and founder of the Global Institute of Children’s Mental Health.

Why? Because kids are wired to chase the rush before they’ve built the brakes to slow it down, Capanna-Hodge says. The results can be good: The pull toward rewards drives kids to explore, try new things and connect socially—all important parts of growing up. But when it comes to spending, a lack of impulse control can be costly. That means the challenge for parents is to guide financial literacy for kids when it comes to spending money in games.

Think about setting those spending limits in games as a practice in self-control. Capanna-Hodge explains how.

Teach kids about spending in games and financial literacy starts before they go online.

Talk first, not mid-game. Set gaming ground rules. These rules should cover spending as well as safety, and how to treat people.

Set a budget together. Each family handles money differently, but kids need to know how much they can spend, and what’s left (if anything).

Use parental controls as training wheels. Most gaming platforms let you block or approve purchases so that kids can’t spend without permission. Think about those controls like training wheels: they’ll change up when they get more stable on their own.

Power to the pause.

Capanna-Hodge suggests simple scripts that help kids pause and reflect. “That pause builds better decision-making and helps slow down the next impulse buy,” she says.

Try this:

• “I get it. You really want that upgrade. Let’s talk about how much it costs and how much you’ll have left after you buy it. If you still want it tomorrow, we can make a decision together.”

• “When you’ve saved half your birthday money, then you can spend the other half.”

If a purchase leads to regret, Capanna-Hodge says to use it as a conversation starter:

• “I’ve bought things I regret, too. What did you hope for, and what did you actually get?”

These small conversations are building blocks of digital financial literacy for kids, teaching them to weigh short-term wants against long-term goals.

When should parents worry about in-game spending?

For some kids, talking about basic digital literacy skills will be enough to keep spending in check. For other kids—especially those who struggle with impulsivity and emotional regulation—online spending can cause real harm.

What to watch for:

Sneaking purchases. Parental controls can be a way to build trust with teens. If a teen tries to bypass them, treat it as a chance to reset expectations and change up spending limits.

Fixating on spending. It’s normal to ask for an upgrade occasionally, but it’s concerning if they’re asking daily or can’t play without spending.

Resisting limits. Parents should set a budget for their kids, and expect a little push-back, but watch for repeated tantrums or meltdowns when limits are set.

If you notice these patterns, Capanna-Hodge says it may be time to pause gaming and reset the rules. With open conversations, clear limits and a focus on digital financial literacy for kids, they can learn to enjoy games in healthier ways.

“Sometimes you need to take the game away, but don’t stop there,” she says. ”Help them learn healthy ways to manage urges and money.” Check in for understanding before allowing access to the game again.

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