Is It Time to “Gamify” Your Financial Plan?
March 09, 2015Managing finances can be a real challenge for many of us.When it comes to reaching our most important life goals, we’re not talking about a game here. We’re talking about something far more relevant in our lives such as our visions for the future, values, and life goals.
Last week, we discussed some financial lessons from the Game of Life. The board game is a far cry from the real world life experience, but playing the game with my kids got me thinking that it cannot hurt to “gamify” our own financial plans a bit. Managing our personal finances is serious business but it doesn’t have to be boring.
There is a new concept called “gamification” that is emerging to help make the process of managing our finances and learning about money matters more enjoyable. In fact, gamification is more than just a concept. It’s an emerging industry with approximately $2.8 billion dollars estimated to be devoted towards it by the year 2016.
Games can be successful at keeping people engaged while trying to improve their financial health, promote financial self-efficacy and financial literacy, and enable people to take action and improve real-world financial behaviors. Let’s face it. With financial literacy levels so low in our country, most people aren’t jumping up and down with excitement to start learning or increasing their financial knowledge, especially the younger generations who grew up with gaming consoles and smartphones with numerous gaming apps in their houses and college dorms.
In fact, as I am currently typing, I can hear my kids playing a game together on their Nintendo Wii. During long car trips, it’s inevitable they will wind up playing games on their iPads. (Although they occasionally enjoy old school device-free games such as car bingo and the shopping/memory game.) Gamification seeks to turn the learning process into a game using some simple concepts that may be familiar to people who grew up playing video games. Here are some examples of gamification that you can check out in your own financial journey:
Mint.com is a popular online budgeting program that helps people automate their finances. In addition to helping people track their income and expenses, Mint also allows users to establish financial goals. Mint provides progress bars that provide visual cues to let you know how you are tracking towards reaching important savings goals or paying off debt.
At Financial Finesse, we have an industry-leading Financial Wellness Assessment that employees of participating client companies can use to constantly track their overall financial health. Not only does the scorecard provide people with tangible results regarding how they’re progressing and their level of financial wellness in comparison to national averages, it also provides specific next steps that people can take to go beyond simply tracking progress to making positive behavioral changes that impact their finances.
SaveUp is another excellent example of gamification at work. SaveUp is a free site designed to make the process of paying down debt or building up savings fun for users. It allows for the consolidation of financial accounts using a process where paying down debt and building up savings in investments are awarded through a point system that provides credits that users can use to play games with actual rewards. Participants can also view educational videos to earn credits that can be used to play games of chance in an attempt to win prizes. There’s also a social component to this to encourage positive financial behaviors. Despite my personal assessment that SaveUp would benefit from the creation of a more robust library of financial education materials and videos, the concept of rewarding good behavior with the opportunity to win prizes and a point system is a step in the right direction for many people that need some nudging along the journey to financial change.
“Gamification” is still a relatively new term and its actual definition is still somewhat vague to many. Nevertheless, these ideas are expected to continue to grow in the personal finance arena over the coming years. Whether it’s a tracking bar used to monitor goal progress, financial wellness scores, or the opportunity to convert positive financial behaviors into gaming opportunities, it’s essential that we find that extra nudge in our own personal lives to move in the right direction financially.
Consider some additional ways to “gamify” your own personal financial plan. Track your net worth on a regular basis and set small rewards as you hit certain benchmarks. Just be sure to celebrate those small victories and make sure the rewards are immediate. You can do the same thing with your debt reduction plans and reward yourself with a weekend getaway (that fits into your spending plan of course) or other fun experience after you have paid off that final credit card balance. Have a spending competition with your spouse or friends to see who has the lowest amount of discretionary expenses for an entire month. Share your wins on social media sites.
How about you? Are you using any “gamification” concepts to keep you motivated with your own financial life plan? If so, please share your experiences in the comments section below.