How to Gamify Your Savings
Dear Rich Lifer,
In 2014, the New York Times introduced an online application for its famous crossword puzzle. In less than two years, the Times’ crossword app had gained over 400,000 subscribers, each paying $6.95 per month.
What is it about games that’s so appealing to us?
Whether it’s crossword puzzles, card games, or sports, there’s something about friendly competition that brings out the best (and sometimes worst) in all of us.
If you haven’t noticed, a growing trend in the world of personal finance is gamification.
What Is “Gamification”?
Gamification is adding game-like elements (scoring, winning, competing with others) to any sort of non-game product or process.
If you’ve ever had the “chance to win” a prize at checkout or earn points that can later be redeemed for future savings at a store, these are all forms of games businesses use to encourage customer loyalty.
Even banks and credit unions are jumping on board. Depending where you live, you could open a prize-linked savings account – where every time you save a certain amount, you earn a chance to compete for various prizes.
In the Save to Win program, for example, each $25 deposit earns you an entry into the prize drawings, and you can receive up to 10 entries a month.
“Anyone 18 or older can open a prize-linked savings account, but the programs have been especially popular with lower-income individuals who struggle to save,” says Bankrate.
Does Gamifying Your Savings Actually Work?
The idea of gamifying your money habits to boost savings might sound a bit silly. But there is evidence suggesting that it works.
Commonwealth, an organization helping people become financially secure, has conducted studies and developed games like SavingsQuest, an online and mobile tool considered to be the first “Fitbit for savings.”
“In a pilot targeting prepaid cardholders, SavingsQuest users could earn badges by saving money and completing challenges,” says Bankrate. “These users saved on average, 25 percent more often than other card users.”
In another study, Walmart MoneyCard users saved 35 percent more, on average, when offered the chance to win cash for saving money.
While there’s no guarantee that gamifying your finances will help you save more, it’s worth a shot if you’ve tried budgeting in the past and failed. Today we’re going to share five ways you can start gamifying your finances.
Gamify Your Grocery Bill
The top three monthly expenses for most households are housing, transportation, and food. A fun game you can play is see how low you can get your grocery bill. This works great if you shop once a week.
Start by benchmarking yourself: go shopping for a week’s worth of groceries and keep the receipt – snap a photo of it when you get home. The next week you go shopping, make it a competition with yourself to spend less on your total bill.
One rule is you can’t compromise the quality of the meals you prepare. You can’t just buy Kraft Dinner because it’s cheapest. The food you buy has to provide the same nutritional value as what you’d normally buy.
As you play this game, you’ll figure out creative ways to save. You’ll leverage coupons and begin buying non-perishables in bulk, you’ll try new recipes that use up items you already have in your pantry. You’ll be surprised how little you need to spend on food when you force yourself to break out of your normal routine.
Try a ‘No Spend’ Week
Another fun challenge is to try spending nothing for one week. There are some caveats to this like paying your bills or covering emergencies. However, the stricter you can be, the better.
Before you try this challenge, track your spending for one week. Then when you run the challenge, keep track of how much you spend, with your goal being to not spend anything.
If you successfully complete the challenge, you’ll have saved whatever you normally spend in one week, which often equates to a few hundred bucks kept in your pocket.
See How Long You Can Go Without Driving
With stay-at-home measures still in place for a lot of people and companies asking employees to work from home, there’s really no reason why you shouldn’t be able to forgo using your vehicle for a few days or weeks.
This challenge will also depend on where you live. If you live in a rural area, then this might not be doable. But, if you live in a city or place within walking distance to most necessities, you can have some fun with this one.
Try walking or biking to get your groceries or go visit friends. This challenge will probably shine a light on how much you need your vehicle. Maybe you rely on your car more than you realize? Or maybe you don’t need your car as bad as you think and downsizing to just one vehicle is possible?
Ban Yourself from Online Shopping
With so many stores being forced to close their doors or only having limited hours, you’ve probably become more reliant on online shopping these days. The fact that we live in a world where you can buy almost anything online and have it delivered to your doorstep has created problems with people overspending.
How many times have you added items you don’t really need to your online shopping cart to get free shipping? We’ve all done it. A fun way to challenge yourself to not spend so much on things you don’t actually need is to remove the convenience of shopping online.
Try going 10, 20, even 30 days without buying anything online. You can still buy the stuff you were planning to buy online, but you have to buy them in-store. You’ll be surprised how many impulse buys are not worth the trip to the store when you implement this rule.
Beat Your Lowest Electric Bill
This last game might take years to perfect. But it is possible to significantly lower your electric bill by hacking your home.
For instance, installing a programmable thermostat will lower your electric bill by an average $180 annually. If you already have one installed, you might have to look elsewhere for savings. Maybe your window seals are leaking more than you know or there’s a door that could use some draft blockers?
Learning where the energy hogs are in your home will allow you to better manage how you and your family use electricity. For example, when you leave the house for a few days, try unplugging some larger appliances. Getting in the habit of reducing phantom loads will go a long way in lowering your total electric bill.
Also, leveraging ceiling fans and opening your windows at night to help cool your house faster are all smart ways to reduce electricity. The point is you’ll have to find what works best for your home.
A Final Word…
Saving money is hard because you don’t typically get the kind of instant gratification that spending money provides. But if you learn to gamify how you spend your money, you can make saving addictive and you’ll reap the rewards.
To a richer life,
The Rich Life Roadmap Team