What Is Gamification and How Can it Help Your Finances?

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There’s a reason why saving money and making financially sound choices are hard. Most of the time, they aren’t enjoyable. According to a survey by Northwestern Mutual, money stresses people out more than almost any other topic, including work and relationships.

Because of this negative association, many people avoid taking a good look at their budgets or getting a thorough understanding of where their finances stand. While it’s always important to work on your finances even if they aren’t enjoyable, there is a way to make them a little more fun.

Gamification can turn a lackluster savings plan into an engaging activity. No matter if your goal is to pay down debt, own a home, or retire early, with a unique kind of motivation you’re more likely to reach your financial goals.

What Is Gamification?

Gamification is when you apply game mechanics to something in order to increase motivation and success. By making an unexciting task, like saving money, more engaging and fun, you increase your chances of success.

Whether you’re most familiar with board games, football, or video games, the elements that make them enjoyable are actually more similar than you might think. These are the main recognizable parts of a game:

  • A points system
  • The ability to level up
  • Competition or collaboration
  • Fast feedback
  • Clear goals
  • Rewards and achievements

Once you know what to look for, you’ll likely spot elements of gamification across a wide variety of industries. It is commonly seen in marketing campaigns, eLearning courses, social media, and business. As more ads, platforms, and commercials compete for our attention each day, the more the world will utilize game elements to keep users or employees engaged. It’s estimated that the gamification industry will have a compound annual growth rate of 30 percent over the next five years.

Read on to learn how to apply these techniques to maximize the effectiveness of your efforts:

How to Apply Game Design to Your Finances

Whether saving for a home or simply trying to curb an expensive habit, try making the task more fun by gamifying it. Use elements of game design that reward you for behaviors you’d usually avoid, or make others more enjoyable to engage in.

Keep in mind the importance of balancing intrinsic and extrinsic motivation. While an external motivator like rewards or competition can help kick-start your savings, intrinsic motivators will help you stay on track over a longer period of time. Consider what intrinsic rewards you may gain from paying closer attention to your finances, whether its knowledge, confidence, or the satisfaction gained from control.

What motivates you is individual to you, so here are some ideas to get you started on ways gamify your finances:

Set a No-Spend Challenge

There can be no game without a goal — so try embarking on a no-spend weekend, or if you’re feeling bold, a no-spend week. By setting a clear short-term goal, you’ll be much more likely to be able to tap into the power of games to motivate you through clear objectives.

Invite Player Two to Join

Competition is a huge part of what makes any game hard to put away, so get someone else on board to help you push yourself to save. Try competing to see who can save the most over the course of a month. The best part is no matter who wins, neither of you truly lose.

Alternatively, you can both work collaboratively towards a shared goal, like saving for a down payment on a house. This way you’re more likely to feel accountable for what you contribute towards the goal.

Keep Score

Think of your money in terms of a point system. By breaking down each step into smaller goals you track, you make each action towards your goal more manageable and rewarding. Whether you’re saving money or trying to raise your credit score, keeping track of how close you are to reaching your goal can help you stay motivated.

Make keeping score fun rather than tedious by doing it in a way that is enjoyable to you. Maybe this means filling in a score in your journal, announcing it on a whiteboard, or color-coding a spreadsheet. Linking your progress to an enjoyable and repeatable action is a great way to make saving feel more like a game.

Unlock Rewards

If the motivation to have a solid emergency fund or finally pay off your student loans isn’t quite enough to get you motivated each day, plan other rewards for accomplishing your goals. Just like points and in-game rewards, you use day to day motivation.

Try setting up rewards that are either small splurges or not monetarily linked to ensure you don’t undo any progress you’ve made. In some cases, smaller, yet more frequently positive feedback may be more effective in motivating you.

Sources: Pew | Talentlms | Forbes 1, 2 | Cnet |

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