Play Your Way to Financial Security with Gamification

Managing your personal finances well is a reward in and of itself, but for many of us, that’s the problem. Despite the well-known benefits of managing money wisely, including having less debt and better prospects for a secure retirement, it still remains difficult to limit credit card spending and pass up costly indulgences in favor of funding a savings account.

However, you might be able to achieve your personal finance goals if you seek an extra motivational boost from the concept of gamification.

What is gamification?

Gamification is an emerging discipline that’s being successfully applied to many arenas, including weight loss, classroom education, employee motivation and more. It’s a long word for a simple concept: using the features that make video games so effective at encouraging us to play them — like visual cues, ranks, rewards and social interaction — to change behavior in other areas.

At Mint.com, you can see gamification in action by clicking the “Goals” tab from the main page. The progress bars in Mint.com are examples of how gamification uses visual cues to tell you how you’re doing on, say, saving up for that vacation or paying off debt.

How gamification helps you reach your financial goals

Let’s assume you have a goal of paying off your credit card. After you click the “Pay off Credit Card Debt” button on the “Goals” page, Mint.com will display the credit card accounts that you may want to whittle down. You can select candidates for elimination by clicking next to the account name, which will allow you to give your paying down debt campaign a catchy name, such as “The Everlasting Freedom Project.”

In the following screens you may need to update interest rates and minimum payments on accounts you’ve chosen. Then, Mint.com will present a slider bar allowing you to vary the amount you plan to pay each month. Click-and-drag in a manner familiar to any computer gamer to find out how soon you’ll be free if you commit to paying a certain monthly amount.

In the final screen, Mint.com verbally slaps you on the back with a congratulatory, “Boom!” Then you get some good advice: make your commitment more public by posting details via social media. It’s been shown that people do better sticking to goals when others get involved.

After you’ve set up your campaign, you’ll see a thermometer-shaped graphic that looks like a charity’s goal-raising campaign status indicator. These sorts of visual cues have been demonstrated to help motivate and guide people to achieve their objectives.

In this way, Mint.com’s gamification helps make it a little easier and even somewhat fun to do things like save for emergencies, build a retirement nest egg and save for college. You can also create custom goals to suit your unique needs and wishes.

The future of gamification

While video games have been around a long time, the concept gamification is still somewhat new. Only a few of the basic elements of what can make a chore seem like a game are fairly well understood. Graphic illustrations of progress, stair-stepping levels of achievement, recognition in the form of badges and ranks, and social involvement with peers are all elements of most gamification approaches.

As we learn more about the concept of gamification, we’ll be seeing a lot more of it — and not just in personal finance. Businesses hope to gamify interactions with customers to create loyal markets for their goods and employers hope to gamify work so that employees are motivated to engage in behaviors that benefit the organization.

If gamification becomes more widespread, it may lose some effectiveness if people become desensitized or start resisting it. At least until then, gamification represents an intriguing and effective new way to help us win one of the most challenging games around – the money game.

“Play Your Way to Financial Security with Gamification” was written by Mark Henricks.