What is the top reason that people stop an activity?
The most common answer might be that the topic, activity, or task isn’t stimulating or exciting. In short, it is boring. Boredom is an interesting concept and can lead to a lethargic or apathetic approach to the task at hand.
Some people feel this way about their finances. In general, economics is not seen as the most stimulating topic or area of study (just consult the US saving crisis and you’ll see). But there are some people (like me) who are fascinated by the trends, strategy, and mechanisms that keep our financial landscape operating.
Translating this passion and excitement for finances can sometimes be as difficult as translating Mandarin into English because there wasn’t a bridge that advisors could use to help instill that same level of excitement to clients. That was true until the process of gamification came around.
What is gamification and how can it be used to fuel your savings strategy? Let’s find out.
What Is Gamification?
Gamification is a process that uses techniques and strategies from games and applies it to a principle or activity to help fuel motivation, loyalty, and overall engagement levels. As a neologism, gamification is a relatively young concept only coming on the scene at the dawn of the recent video game revolution.
Origin of Gamification
While the origin of the phrase remains a mystery, entrepreneuer and author Gabe Zimmerman in his 2010 book Game-Based Marketing gave his own definition of the term. He says that gamification is “the process of using game thinking and mechanics to engage audiences and solve problems.” From then on, gamification has been applied to many tasks and principles to help fuel creative thinking while also improving productivity levels.
But what makes games so appealing?
There are many reasons why we as a society enjoy playing games. While each game is different in look and story, they all share similar concepts:
So we know that games are interesting and that gamification can be used to help enhance a task. But how can it redefine the way you look at your savings strategy?
Gamification Meets Finances
I will present two scenarios for you and I want you to decide which sounds like more fun.
Option 1: You put money away each month in your savings account.
Option 2: Each month you add to your savings account you unlock new rewards.
Option 2 probably sounds more interesting because it has the added benefit of a reward and “unlocking” new potential each move you make. You can apply gamification to your savings strategy in so many ways to help keep you motivated in your savings journey.
Fixed Amount Challenge
One option many people are familiar with is the 52-Day Challenge. This task requires participants to save $1 per week and increasing by $1 each week so that by the end you are saving $52 in a week. You can also turn this into a 30-day challenge, using the same structure until you reach $30 at the end of each month.
One Percent (1%) Challenge
You can try and take this one step further by doing a One Percent Challenge. You begin by saving 1% of your paycheck and increase the percentage by 1 throughout the year so by the end of the year you are saving 12% of your paycheck.
The Benefits of Trying
After you participate in any of these or other challenges, you can work towards beating your own record or challenging yourself even further with a No Spend Challenge for a set amount of time. Some people do this challenge for 2 weeks and others try for a month. No matter what you decide, try a challenge that will work well for you and keep you motivated to save. Once you see how much you were able to save, you will want to stay on that good path.
When you apply gamification to your savings strategy, you will be able to have a deeper investment into your finances and have more fun with them at the same time. When you are using this strategy to save more money remember to follow this process:
- Establish your goal (Saving “X” amount of money)
- Create a plan for achieving that goal (The game or challenge)
- Check-in on your progress along the way (Where is the finish line?)
- Establish a reward system (For every $500 you save, you treat yourself to a movie for example)
When you stick with a process that works, you will see results. Don’t try and overdo it by making an unrealistic goal for yourself. Set realistic goals, expectations, and plans to get there and you will be surprised at the amount you are able to save.
There are many tools that exist to help you use gamification to save more money like through apps like Minted and SaveUp. SaveUp is really interesting in that the app gives you reward points for contributing to your savings goal and those points can be used for instant-win games and even opportunities to win larger prizes like a car or a vacation. The technology is available, it is time to use it to your advantage.
A Financial Planner Can Help
Financial planners are there to help you reach your biggest (and toughest) financial goals. It is our mission to find creative, logical, and result-driven ways to get you where you need to be. If you would like to talk about how gamification could help your savings strategy, give us a call!