How ‘gamifying’ your finances the right way can be a win-win

The mind-money connection

Gamification can be a game-changer when it comes to your personal finances. Here are some ideas to build your financial literacy and hit your money goals.

It’s a tried-and-true tactic: A teacher tells their students they’ll get two points for having their homework out, ready to be checked, without being prompted. Bonus point if everyone in the class does it. And the first student to reach 20 points by hitting other various goals throughout the day gets to be line leader.

The teacher in this case is motivating students with gamification. What is gamification? It’s when you take some of the most engaging elements of games, like competition and rewards, and apply them to real-life activities. The idea is that gamification can make tasks that may not be naturally exciting seem more fun and easier to accomplish.

The strategy of gamification doesn’t just work on kids—it’s great for motivating adults, too. Think, for example, of fitness apps that track your activity and give you positive feedback for hitting your exercise goals. 

“Gamifying taps into our natural desire to play, to win, to challenge, to do things differently than we currently do, to break out of the daily monotony,” says Brian Ford, head of financial wellness at Truist and co-host of the “Money and Mindset With Bright and Brian” podcast. “It allows us to accomplish things that we know are good for us, but that may otherwise be a slog.” 

Get in the game!

83% of employees who use gamified training feel more motivated at work.

27% more families  achieved their daily fitness goals when using activity trackers.

Source: “The 2019 Gamification at Work Survey,” TalentLMS, August 19, 2019.

Source: “Game Time: To Increase Exercise, Study Shows Gaming Strategies and a Buddy are Key,” Penn Medicine, October 2, 2017.

Although the term “gamification” was coined in 2002, the concept has been growing in popularity over the past decade as more companies incorporate gamification techniques to help customers, clients, or employees reach goals.Disclosure 1 With proper use, it can also be an effective (and fun!) way to hit financial goals.

Why gamification works

Hitting a goal—walking 10,000 steps in one day, completing a month-long streak of daily word puzzles, or being number one on the leaderboard for your workplace sales targets—can feel good. It taps into the pleasure center of the brain associated with rewards.Disclosure 2 Over time, these hits of positivity can serve as motivation and help you develop healthy habits.

“Play is how we learn,” says Bright Dickson, co-host of the Money and Mindset podcast and resident positive psychology expert at Truist. “Gamification, if done well, takes advantage of that to create learning and positive outcomes.”

Applying this approach to personal finances can help you build better habits with everything from borrowing to budgeting.

“A savings app, for example, makes saving a byproduct of something that’s already intrinsically motivating to the brain, which is the game,” says Dickson.

How to gamify your finances

If you want to take a gamified approach to your finances, various apps and digital tools can help you do so, or, you can take a more DIY approach. Consider the tips below when deciding if the game is worth playing—and when making sure that your financial skills and bank accounts aren’t taking a hit.

  1. Saving

    Many apps have emerged to help people strengthen their savings. Some round up your purchases and move the change directly to another account. Others allow you and a partner to challenge each other and save for a common goal. And some trigger an automatic transfer to savings when you log a completed task, whether it’s working out or cleaning out your garage.

    Then there are challenges to amplify your savings: A no-spend month can be a great way to cut back and save money. Or you can limit spending in one category, like food: “I’ve seen people try to clean out the pantry and go two, three weeks with not eating out, and not even shopping for groceries, in order to save more,” says Ford.

    A year-long savings challenge is another idea to try. Save $10 in month one. Manually or with an automatic transfer, increase the amount you save by $10 each month of the challenge. By the end of the year, you’ll have socked away an extra $780.

    Tip: Before signing up, read the fine print about how your preferred digital saving tool makes money. Some may charge a fee to manage your finances, or pocket the interest they earn on your money.Disclosure 6

  2. Credit

    “With credit, the gamification is almost built in, because there is already a score assigned to you,” says Ford. While there aren’t a ton of digital tools created solely for gamifying credit, you can easily take a DIY approach to increasing your credit score. “Whatever your score is now, how can you take it to the next level and have fun doing it? How much can you raise your score in six months, for instance?”

    By challenging yourself to improve your credit—disputing errors on your credit report, lowering your credit utilization ratio, paying bills on time—you can potentially make gains quickly and get a thrill seeing the number go up.

    Tip: You don’t have to go it alone if you’re looking to repair a damaged credit score. Expert support is available at no cost nationwide. Use a reputable nonprofit credit counseling agency or any credit counseling agency approved by the Department of Justice. Be wary of any credit repair company or debt settlement company promising to fix your credit problems for you at a cost.

  3. Debt reduction

    There are many debt payment apps that present your payoff total as a challenge. You’ll progress through different levels of payoff, and celebrate as you hit different milestones.

    Some take a more hands-on approach. You link your loan accounts, and the app will make a plan to pay off your debt, completing the transfers for you and sending extra payments when available.

    Other apps give you the strategy and leave it to you to complete the transactions: The app will show you how to apply the avalanche or snowball method to pay off your debt in an efficient manner.

    All of these techniques can be applied without an app, but by going through a digital service you should be able to visualize the payoff plan, see your debts reducing, and get the satisfaction of staying the course.

    Tip: Choose a debt reduction app that costs $0 to $5 per month. More expensive services may actually be debt settlement companies, which deal in high-cost bankruptcy filings, not good financial habits.

  4. Investing

    Want to start investing but not sure where to start? Digital investing tools have emerged as beginner-friendly options for commission-free investments. You sign up for an account, transfer in your money, and you can start buying and selling stocks. These apps are filled with gamification features, including leaderboards for stock performance, celebrations for initiating trades, and lottery systems to incentivize trading.Disclosure 7

    Tip: Really assess whether you have all your other financial needs met first. “A lot of these apps get people going in a direction that isn’t appropriate for their knowledge level,” says Ford. “People are playing these investing games when they do have considerable amounts of consumer debt, they don’t have an emergency savings account, and they don’t budget. I’m not a huge fan of that.” Although investing apps can be a fun and approachable place to begin your trading journey, you may be better off getting the support of a financial advisor or other professional investing service.

  5. Budgeting

    Many budgeting games aim to improve your financial literacy without real money on the line. This can be a great way to brush up on best practices for spending and saving.

    Other budgeting apps allow you to sync your accounts and allot a “job” for every dollar. Getting organized, hitting goals, and feeling the motivation that comes with executing a plan can make real-time budgeting apps a fun and rewarding way to manage your money.

    Tip: Budgeting apps aren’t set-it-and-forget-it tools. They take ongoing, hands-on monitoring to make sure your money is adequately allocated. Even though you may pay for the service, the app won’t be helpful if you stop paying attention to how your money is moving. 

Gamifying your finances, whether through a digital platform or on your own, can be a fun and engaging way to approach your money. But badges, leaderboards, and challenges are just flashy fronts for your actual objective: to learn more about money management and have a guide to hit your financial goals. In the end, it’s your knowledge and attitude about money that will help you manage it best, not the bells and whistles of an app. 

This content does not constitute legal, tax, accounting, financial, investment, or mental health advice. You are encouraged to consult with competent legal, tax, accounting, financial, investment, or mental health professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.