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A cockatiel is a social bird who loves to spend time interacting with his cohabitants, be they a mate, a flock or a human family. If you are a bird's sole companion, you'll have to include her in your life actively to keep her well. The type of interaction is less important than your frequency and consistency. He'll appreciate the time and attention as long as it doesn't involve loud noises and sudden movements that might scare him.
It doesn't matter whether he understands what you say, your cockatiel will enjoy and respond to your voice. He may even try to imitate certain words or phrases if you repeat them often enough. If you are trying to teach him to speak, incorporate the word or phrase you hope to teach frequently in the conversation. Otherwise, spend time each day speaking to your cockatiel while he is either relaxed in his cage or on your hand. If he attempts to respond with sounds of his own, stop and listen, then begin conversing again. What you say is not as important as keeping your voice light, happy and engaging.
If your cockatiel is comfortable perching on your finger, you can play with him and give him some exercise at the same time by having him step up from the index finger of one hand to the index finger of the other as if up a ladder. Have him perch on your finger as usual and, outside the cage, ask him to step onto your other index finger. Once he's up there, have him step up on the first finger again. Repeat this as long as he enjoys it.
Singing and Whistling
Cockatiels love music. Sing or whistle a cheery tune and watch his reaction. If he dances, move in time to the music with him. If he responds with a tune of his own, listen and even dance a little to it, then answer with a new tune of your own. You can also play music near his cage and dance or bop along to the tune. He will likely follow suit after a while and eventually may begin dancing any time he hears the music.
If your cockatiel is too shy to sit on your hand or shoulder while you talk or sing, he will learn that interacting with you is enjoyable if you offer him an occasional treat. Softly talk, sing, whistle or hum to him while holding the treat near him. If he won't take it from your hand, place it in the cage next to him and keep talking or singing as long as he is paying attention and seems interested. Each day try again until he takes the treat from your hand.
Like a cat or dog, you can engage your cockatiel in play with his toys. Encourage him to pick up or play with the toys and then follow his lead. For example, roll a ball designed for birds toward him and watch his reaction. He may engage you in a game of fetch by offering the ball back to you, or he may play with the ball a little bit before dropping it, waiting for you to roll it to him again. Either way, the idea is to spend time interacting and bonding, not to play any specific game.