A new game teaches financial literacy and decision-making

    How can you identify and overcome biases that hurt you financially? NOVA teamed up with Duke University’s Center for Advanced Hindsight to design the NOVA Financial Lab, a game that breaks down the behavioral science behind financial decision-making.

    ByKara NortonNOVA EducationNOVA Education

    In NOVA's newest lab, practice making financial decisions and examine the behaviors that influence how money is spent, and how these decisions can increase or stall progress toward financial well-being.

    When purchasing a new vehicle, you can choose many add-ons and customizations. But while a sunroof, heated seats, and built-in GPS may sound appealing, they all come with a cost. Choosing to spend money on extra features could result in the loss of another opportunity, such as the ability to go on a road trip, see your favorite band play, or fulfill a preexisting financial goal. These losses are known as opportunity cost: the lost opportunity when you choose one option over another. It’s one of many subtle concepts that play an important role in personal financial management.

    Illuminating those kinds of concepts is exactly what NOVA's newest lab is designed to do. The online game, launched in February, lets students practice making financial decisions and examine the behaviors that influence how money is spent. And, ultimately, understand how these decisions can increase or stall progress toward financial well-being.

    The NOVA Financial Lab weaves real world examples into a narrative structure, centering psychology and behavior by design. In contrast to other financial literacy games, the lab focuses on behavioral principles related to spending and saving, and provides context for applying new knowledge to build healthy financial behaviors. The science of spending is broken down into three mini-games that allow players to identify common biases that crop up when we think about money, and allows users to practice strategies for overcoming them by taking care of an imaginary pet.

    A 2018 study found that teens in Estonia, Finland, Canada, Poland, and Australia all scored higher on average than U.S. teens on a financial literacy assessment. These findings are from the financial literacy portion of the Program for International Student Assessment (PISA), an international survey that collects data from 15-year old students in 20 education systems around the world. The 2015 PISA survey found that one in five 15-year-olds in the United States lacks basic financial literacy skills and knowledge of key concepts required to make financial decisions.

    A potential reason for gaps in financial knowledge is that many students do not learn about finances and money management in the classroom—but rather from their parents. Many American students gain financial knowledge by observing and learning from their parents, and such financial skills are strongly related to socioeconomic status.

    It’s not all bad news: There has been a push within public schools to equip students with the financial knowledge they will need to take control and plan their future. Today, American teachers have a wider range of out-of-school education programs and activities they can use to teach about financial topics such as debt accrual, credit cards, and investing. And high school students in 21 states are now required to complete a personal finance class as a graduation requirement, according to the Council for Economic Education. But there is still a serious knowledge deficit.

    “The (PISA) study shows that many of our students—roughly one-fifth overall—don’t have the skills they need to make prudent decisions about their personal finances and struggle with everyday tasks, like determining the best value between two products at the market and knowing how to respond to a phishing email that looks like it’s coming from their bank,” Peggy G. Carr, associate commissioner of assessments at the National Center for Education Statistics, which administers the test in the U.S., told CNBC in 2020.

    While players of NOVA’s Financial Lab probably will not need to sneak their pets into a concert or draft a retirement plan for them in real life, doing so in an interactive game can help them learn about concepts like budgeting, interest, and debt. “What we hope people start to do is really think ‘What decisions should I make now to make better decisions later?’” says Jonathan Corbin, senior behavioral scientist at the Center for Advanced Hindsight at Duke University. Here’s a quick preview:

    Shopportunity Cost explores the concept of opportunity cost, the missed opportunity that results from choosing one option and forgoing another.

    Game 1: In Shopportunity Cost, players are getting ready to go to a concert with their pet! But in order to sneak them in, they will need to make sure their pet passes as human. With each item users buy comes a challenge: how to maximize your pet’s happiness while sticking to a budget. This scenario introduces players to an important financial concept known as opportunity cost, the loss of an opportunity that results from choosing one option over another.

    Mental accounting is a cognitive bias that explains how humans tend to assign subjective value to finances, depending on how the money was earned, how it was intended to be used, and how it influences wellbeing.

    Game 2: In Budget Buster, players learn about the concept of mental accounting, a behavioral economics concept that explains how humans tend to assign subjective value to finances, depending on how the money was earned, how it was intended to be used, and how it influences wellbeing. In Game 2, users will manage checking, credit, and savings accounts while caring for a pet over a six-month period. Along with purchasing essential and non-essential items to attend to their pet’s basic needs and happiness, players have to contend with unforeseen circumstances like medical emergencies. The game also introduces the 50-30-20 rule, a budgeting concept that involves devoting 50% of income to essentials, 30% to non-essentials, and 20% to savings.

    In this mini game, players must overcome exponential growth bias by grasping the effect of interest rates over time, and strategize the best way to pay off their pet’s long-term debts and invest in retirement savings based on interest rates.

    Game 3: In Exponential Potential, the focus is on longer term financial planning. When players glimpse their pet’s future, the outcome is not looking very good. Luckily, players can go back in time to decide how to pay off debts and make investments to maximize net worth. Players’ success depends on mastering compound interest and using it to their advantage.

    After each playthrough, players earn a trophy for their pet and a tip for how to apply what they’ve learned to making financial decisions in real life. Managing money is something we all have to contend with. There are many factors that are beyond people’s control, starting with the social and economic situation they are born into. But when it comes to what you can control–your behavior–a little insight and practice overcoming the bad habits that undermine financial health, and which companies try to exploit, can really pay off.


    Visit the Financial Lab collection on PBS LearningMedia which includes a lesson plan, a teaching guide with instructions for navigating the game, and discussion questions for several of the videos in the game.

    Major funding for NOVA is provided by the NOVA Science Trust, the Corporation for Public Broadcasting, and PBS viewers.