Helping kids turn virtual into reality: Is Fortnite good for kids?
How video games can help plan for the future
It is the gaming sensation that has kids across the world talking, not only about the game but also to each other, and 12-year old Aidan Hayes is just one of those kids.
“He talks about it all time. I actually get tired of him talking about Fortnite,” said Aidan’s mom, Rhea Hayes, with a big smile on her face. “It’s like they graduated from other games to this more advanced one, so we find it very important to set some limits.”
Fortnite is an online video game that allows players, either as a single player or a team, to battle other players in an effort to be the last one standing.
“I like that everyone can play it,” said Aidan. “It is free, so you don’t have to spend a bunch of money. Although I ended up spending a bunch of money on it.”
Aidan explained that he spends money to buy virtual skins (armor and outfits), and weapons that didn’t necessarily give him a better chance of winning.
“They look cool,” said Aidan.
While some parents question if Fortnite is good for their kids, kids can’t resist all the things the game offers. And experts say parents and their children can find life lessons from video games, including financial lessons that can prepare children for their future.
Lesson #1: Online safety
When it comes to online transactions, experts say that keeping personal information safe is key. It’s one of the greatest things to learn from playing video games, a place where children frequently purchase items.
For Aidan’s mom, the other online safety concern is around her son chatting with others while playing the game. She wants to make sure that Fortnite is good for her kid and not exposing him to dangerous individuals.
“My only defense in all of this is just staying involved,” said Hayes. “I am constantly asking him who did he play with today? What are their names? Just so I feel better about the whole thing.”
But online safety is not solely about stranger danger; it is something that requires vigilance throughout life to protect oneself against identity thieves, including those that would steal a tax refund using their identity.
“Never share personal information with anonymous players, even if you feel like you know them well.,” said Mike Slack, lead tax research analyst at The Tax Institute at H&R Block. “Identity thieves could use your personal information to file fraudulent tax returns in your name or commit other forms of fraud.”
Lesson #2: Learning to budget
Aidan has spent close to $900 on the video game. But many kids find that making the purchases are not easy since it does require a credit card. Although he does ask for money, he and his parents discuss things further before he can make a purchase.
“Since he doesn’t have a credit card, someone has to make the online transaction for him,” said Hayes. “So, if he has $5 in his hand, he has to give it to me and then I make the transaction on my credit card, so he understands where the real cash is going.”
Seventy-five percent of teens say that learning more about money management including budgeting, saving and investing is one of their top priorities, but few know how to do it. Experts say discussions like the ones Aidan has with his mom before each purchase can help prepare kids for their financial future. These conversations are great way to infuse life lessons into video games like Fortnite.
Lesson #3: Planning for the future
Fortnite is a game that is about building up resources to protect players from attack. This is also the time parents can talk to their children about building up their financial resources so they are ready for the future. It’s what video games can teach about patience and long-term savings that relate so well to financial well-being.
“In addition to savings accounts, there are mutual funds and retirement accounts, such as an IRA or a 401(k),” said Slack. “It is never too early for children to learn what these are so they can learn about their future savings options and how to plan for them.”
Lesson #4: Earning money
Children are using Twitch streaming, a live video streaming program, to watch as someone plays a game or walks them through ways of beating opponents.
While it does cost to view and broadcast on Twitch, there are also money-earning opportunities for those streaming. Making money is an invaluable life lesson that video games like Fortnite can teach with monetization on Twitch and social media.
“While the majority of children receiving small amounts of income from playing Fortnite will not have to worry about paying taxes on that money, if your child starts receiving income in the hundreds of dollars you might want to examine the possible tax implications,” said Slack. “Specifically, you will want to be aware that this might cause them to be required to file their own tax return to report that earned income, as it cannot be included on your own tax return.”
Lesson #5: Filing a return
While it might surprise parents to learn that their young child would have to file their own tax return, it is not necessarily uncommon. Children whose only income is earned income must file a return once their earned income surpasses $12,000. Children with unearned income, such as interest or dividends, must file if their gross income exceeds the greater of $1,050 or earned income (up to $11,650) plus $350. If a child’s income exceeds these filing thresholds, the child’s income will be included in the household’s total income, which can impact the amount of premium tax credit the family can qualify for to offset the cost of health insurance premiums.
“As a parent, you generally can file their return for them, including signing the return, without having to take any special steps,” said Slack. “Furthermore, the parent who signs the return has the right to deal with the IRS on all matters related to that particular return.”
So, whether it is Fortnite or another online game, the key is to sit down and have a conversation around what this all may mean for them in the future. Parents and their children may both be surprised by the life lessons from a video game.