Caitlin's Corner

Monopoly & The Way We Behave with Money

I never played Monopoly as a kid, which feels somewhat ironic considering I became a real estate investor as an adult. So over the weekend, I experienced the board game for the first time, with my husband and our 7- and 10-year old daughters.

This board game went about as you'd expect a game in our family to go; we all started with high hopes and little by little, people (the kids, I swear 😉) started melting down when "chance" cards or high rent threatened our financial stability. We're all good now, and I can say that after several hours of watching our family buy, sell, hoard, negotiate, and spend our way around the board, I realized that we were doing the exact same things with Monopoly money that adults do with real money.

We Get Attached to Our Money

At one point, my youngest daughter was faced with a seemingly simple decision: choose how to pay someone $60. Amid her money pile were several $20 bills and one $50 bill. She was very reluctant to give up the $50. In fact, she was perfectly willing to hand over three $20 bills instead if it meant she could keep her $50.

Most of us could look at this situation and see that it makes no difference to your net wealth if you pay someone with a $50 bill or pay someone with two $20s and a $10. Then you watch a seven-year-old agonize over which bills to surrender and you realize something painfully obvious about humans: we get emotionally attached to the things we own.

It's easy to laugh at this in a Monopoly game, but adults do it all the time with real investments. I held onto a single company stock for decades because it was gifted to me by my late grandfather, and it had been part of his compensation when he worked for the company. It literally felt like his sweat and tears were in that stock and for a long time, I couldn't bring myself to sell it.

Everyday, humans hang onto homes that no longer fit them because of the memories made, or the creative imprint they've left there over decades. I've been there! Two years ago we struggled to make the decision to sell the house where we had our wedding, brought our kids home from the hospital, buried our beloved dogs, and poured hours into when designing a remodel. We decided to keep it when we moved, and the result is that we're now selling it at a worse time, for a lower price.

Our attachment to something we own can make it very difficult to make a rational decision about whether we should continue owning it. My daughter demonstrated this with a $50 Monopoly bill.

Knowing What to Do with Our Money Isn't How We Master the Game

One thing I find so fascinating about finance is how small of a part money actually plays in it. Knowing what we should do with our money is a fraction of the journey. How we behave with money is the rest.

Watching my daughter agonize over giving up a $50 Monopoly bill was a silly, low-stakes reminder of how deeply our emotions are tied to the things we own. While her attachment to that $50 might seem irrational, the truth is that adults do the same thing with far more consequential financial decisions every day.

I think understanding those behaviors is one of the best ways to start making more rational decisions with our money. None of us will ever behave perfectly rational, but when we recognize that our emotions might be influencing us, we can have a better understanding of our behavior, which might help us change it.

Maybe just as importantly, understanding our own money behaviors can help us have a little more compassion for the people with whom we share financial decisions.

What I'm Reading

📘 The secret history of monopoly show us how actually, Monopoly shows us the evil of the system we live in. While I had believed the game was invented by a wealthy landowner, it was in fact a creative experiment by a female land use activist in 1903. She once said: "let the children once see clearly the gross injustice of our present land system, and when they grow up, if they are allowed to develop naturally, the evil will soon be remedied".

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