Learning Finance from Animal Crossing: New Horizons

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Learning Finance from Animal Crossing: New Horizons

The Nintendo Switch video game Animal Crossing: New Horizons has been quite the viral sensation. Released around mid-March, it allows players to explore an island and create their own virtual life. It even has seemingly realistic tasks one performs every day, like pulling weeds and catching bugs.

You might think that this game sounds weird. Trust me; it is. But, the ability to explore a virtual world in the middle of a pandemic has been a healthy escape for many. 

The most appealing thing about the game isn’t, say, spending 20 minutes fishing. It is, selling those fishes for bells. These bells are a currency you can use to change the appearance of the island to suit your imagination. You can build furniture, add rooms and even change your clothes. The sky is the limit!

But to build one’s life, practicing financial discipline is important. And, the lessons from ACNH are pretty important in the real world, too. Here are a few important pieces of financial advice that you can practice in your life!

Building a Budget

There are several fun games like Animal Crossing: New Horizons where you can explore places and buy whatever you want to. This is similar to how consumers in the real world behave.

Unfortunately, if you run around hoarding clothes that you won’t need, your bells will drop to zero. It will take forever to earn enough money to invest in furniture that you will need in your apartment. Forget furniture, you will find adding rooms to your house expensive.

This holds true in one’s life too. Purchasing a product or a vehicle requires budgeting and planning. One can start by creating a budgeting worksheet to dedicate savings for long-term use. 

Practising Self-Control

Sticking to a planned budget requires self-control. You’re saving up for a new car. But then, you see a local store selling a mint green electric bass guitar. Would you spend 50,000 bells on your guitar to rock out Bohemian Rhapsody, or will you stick to the budget you have created? 

You know what the responsible thing to do is. Impulse purchases can derail one’s budget plan. Staying disciplined is necessary to achieve long term goals. It also involves investment in one’s health and education. That doesn’t mean you have to stop having fun. But planning out a budget carefully is important.

Understanding the Cost of Convenience

We know that a cup of coffee at home is cheaper than getting a cup at Starbucks. Going on a drive to buy groceries is cheaper than having them delivered to our doorstep. But, we want the convenience and are willing to pay a premium for a service provider who can do the task for us. 

But knowing what is important and what isn’t important helps achieve financial success. In ACNH, your convenience charge is high if you want to sell your products quickly. Convenience always has a cost that one should calculate before making a financial decision. 

The Value of Labor

In Animal Crossing, raw materials aren’t worth as much as finished goods. The mangoes in your backyard will sell for 50 bells per piece. But, if you turn those mangoes into a jam, it’s worth over triple the value of the fruit.

Few people can carve a furniture piece in real life. But in ACNH, you are capable of customizing your own rooms. Here, the crafty ones can go all out.

You can save a lot of money by doing things yourself (whatever it is that you are capable of doing). Purchasing finished goods is an expense. You can also turn your handmade goods into a side hustle and find buyers willing to pay for them.

De-Clutter

If you browse the internet, you’ll find pristine and well-appointed homes and retreat areas. But, a lot of households (perhaps your own) features messy storage and garages stuffed with documents from years ago.

That clutter is bad for your aesthetics and your pocketbook. Do you need everything in the garage that you’re paying rent on? You can always sell the appliances that you don’t use for a few extra bucks. 

In ACNH, it’s easier to pick a product and sell it than it is in real life. But that should not stop you from decluttering your life. 

Coupons and Rewards

Another way to save bells in the game is to make use of coupons and vouchers. Daily tasks for “Nook Miles” can be performed and exchanged for furniture and clothes. One can also participate in loyalty programmes. These programmes make use of tickets that you can use for your future purchases.

This applies to real life too. Online coupons, codes, cash-back offers and punch cards can be used to access discounts and freebies. This helps you save cash. Smart shopping is the best way to shop.

Speculation = High risk and high reward

ACNH is known for its turnips “stalk market”. A piglet with a runny nose shows up to sell vegetables at a fixed cost. If one is lucky, the local shopkeepers will buy it at a higher price in a few days. 

But, there is no guarantee of the price you will be offered. Turnips don’t last forever. If the prices stay low, you’ll never sell the vegetables. In the end, you’ll be left with rotten turnips and no bells. 

The rewards are not the norm, despite some examples of people turning into millionaires because of their fast-moving stock. The rewards shouldn’t stop one from short-term speculation with hard-earned bells.

Low-Risk Instruments

An alternative in the stalk market is a profit-making idea. In Animal Crossing, one can rely on the interests of your bank savings. This return is low. Investing always involves looking into one’s long-term financial goals and budget. Bank interests might seem small to matter. However, this is a method of ensuring certainty in finances. 

The best part of the game is that you can never win. The game is infinite and filled with surprises. It helps one develop a financial perspective. There is no time limit or objectives to complete. Life feels a lot more freeing. Animal Crossing helps one enjoy the tiny things in life. Lastly, the game is a wonderful example of the fact that life lessons can be learnt anywhere. 

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