Video games have come a long way from pong; today, there are approximately 1.2 billion gamers around the globe, and gaming now attracts a much wider audience than in the past. That is because Gamification is all around us – from corporations that leverage it to train employees to marketers who use games to attract new customers. If you are not familiar with the term, let’s clarify things a little. The University of Pennsylvania defines Gamification as “the application of game elements and digital game techniques to non-game problems”. For instance, if you have ever used a Fitbit, then you are just one of the million users who have turned fitness into a game.
Gamification and Personal Finances
In fact, according to Syble Solomon, the author of “Bringing Money into the Conversation”, games are usually associated with positive social experiences, so people do not turn off mentally; and when they are actively engaged, certain pathways in their brains stay open, so they can learn and retain more information. Of course, if deployed carelessly, gamification can lead to disastrous behavior patterns. Gamification is one the most notable behavior-modification techniques known and its power comes from the fact that it speaks to our most automatic drives. So how can a person take virtual cues from it to improve his or her financial situation?
The Psychology Behind the Process
Much of way people interact with their finances is already set up like a game, whether you realize it or not. Boosting your credit score, earning credit points and handing over money to get instant satisfaction all draw from elements of gaming. Therefore, from a psychological standpoint, using Gamification to put your finances in order is not a matter of starting a game – but of shifting to a beneficial one. This can be quite difficult, due to the fact that we do not always feel instant gratification, when it comes to things like saving for retirement.
For instance, if someone earns $50,000 per year, saves 10% of their income, invests that $5,000 and earns a hypothetical 5%, in a year he or she has amassed about $250 in interest. While that is a nice amount of saving and an excellent return, it comes out to less than $21 a month. Your average person might perceive it as giving up a vacation to earn a small sum of money. Enter gamification, which could help you boost your finances, by teaching you how to gain satisfaction, not from the end goal, but from the steps that can get you there. As Gabe Zichermann, author of “The Gamification Revolution” explains it; gamification can help people stay focused on the “small daily actions they can take to control their destiny”.
Gamifying the Future
While most people accept that their financial knowledge can be improved, few are willing to spend the time needed to get acquainted with their problems, and improve their financial situation. However, gamification elements such as progress bars and advanced features that are locked until a certain tasks are completed can provide a sense of accomplishment for the user. The whole concept of gamification may sound complicated to an older demographic, but the fact is, these days you can contribute to your retirement or you can pay rent online easier than ever before, and earn credits for your financial behavior in the process.
Gamification promises to change the way we learn new things, make purchasing decisions, and is some places, it will even determine whether you travel abroad or get a loan. Furthermore, bloggers are using it to build a following of devoted readers, and some people are using it to build good habits with tools such as HabitRPG. Some may question its efficiency, however, according to a recent survey conducted by TalentLMS, almost 90% of people think that a point system boost their efficiency, both in the workplace and at home.