Turning your financial goals into reality is everyone’s dream. Many of us can fulfill that dream, many can’t even have that option, and some of us don’t want to fulfill it. As per CNBC, 65% of Americans save almost zero towards achieving their financial goals. They are being irresponsible towards finances and gradually fail to achieve their financial goals.
The fact is, people know very well that they have to set up financial goals and strategy for a better future. But, it’s not something that everyone can practice with the same dedication and responsibility. There’s no doubt that managing finances is a dull job. Sometimes, preparing a budget, sorting out debts, checking out expenses, handling charges, bills, fees, etc. can be too tiring to perform.
So, how do you motivate yourself to get started with the financial goals 2019? Where’s the fun or challenge in managing your own finances? Experts recommend that you should treat your financial planning as a game, and use gamification to achieve your prime financial goals.
Before going into the main discussion, let’s have a quick overview of gamification.
What is gamification?
Games are commonly used to teach complex ideas in such a manner that a person can easily relate, adapt, and respond with them. By using finance gamification method, people can make their financial planning more interesting and become financially responsible.
Gamification leverages people’s natural tendencies for competition, achievement, collaboration, and charity. It’s all about taking the challenge and doing the task with fun and motivation. After successful completion of your goals, you can reward yourself too. You may moderate and modify your financial goals as per your priority.
The biggest benefit of financial gamification is triggered motivation and unlimited focus throughout the financial period. Marcelo Rinesi, a data scientist and assistant director at the Institute for Ethics and Emerging Technologies added – “ From a psychological and behavioral point of view, using gamification to put your finances in order isn’t a matter of beginning a game—but of shifting to a more beneficial one,”
Here’s how to set financial goals and achieve them through gamification:
1. Keep an eye on your expenses
To achieve your financial goals you must tame your expenses first. But do not just start cost cutting yet. If you do, you can’t maintain it for a longer time. So, what do you have to do? Make it interesting.
You may do one thing. Every night after dinner, analyze and tally your daily expenses without fail. This way you may find out where you’ve spent the money throughout the day. Do this for one month but make sure you don’t change your spending pattern. Just track your spending, nothing more. Understand where your money is going.
Calculate the total expense of that month and write it down on your calendar. You’ll see changes in your spending pattern very soon. You’ll automatically start making fewer expenses, and without knowing it. The habit of smart spending will grow within yourself.
At the end of the next month, you’ll notice that the total monthly spending will be lowered by a small amount. That’s a great success to you. You’ll feel excited about what you could do without even doing any hard work. This will keep your motivation high and give you the confidence to save more.
2. Give yourself a monthly savings challenge
You are in need of a big fund, but you don’t have any option to arrange it, gamification of finance may give you the chance to fulfill your need.
Suppose you need a good amount to finance your home renovation within 6 months. Try to give yourself a 6-month saving challenge. If you have anything useful but unused in your possession, try to sell them at least once a day through online (Craigslist or eBay) or at any local stores.
You can sell anything. Starting from old phones, iPods, furniture, unused wedding gifts, CDs/DVDs, old books and clothes, shoes, and many more items. You will find the item easily for the first half of the month, but later it might get a little difficult to find items to sell.
That monthly challenge might give you a scope to pay off your debts. If you initiate a DIY debt consolidation method such as the debt snowball method, you may save enough money to pay off 1 or two smallest debts within 4 to 5 months. You may also contribute in your 401(k) retirement savings. Apart from that, you may increase your mortgage payment every month so that you can pay it off quickly.
3. Grow your savings
You may set up an auto pay option to pay directly from your checking account to your savings account. It’s better if you can follow the 50-30-20 method of budgeting and save 20% of each paycheck directly into your savings account. The process of the gamifying budget might be different each month. You and your spouse can alternatively cut off your paycheck and save the money. That means if you’ve deposited 20% of your paycheck in February, then your spouse should do it in March. This way, both of you can share the responsibility of saving money without hurting your existing budget. You may also be able to maintain a continuous cash flow into your savings account on a regular basis.
Then, comes the most exciting and hard part! You have to make it to the next paycheck without tapping your savings. Sounds like a real challenge, right?
This strategy includes both husband and wife and gives them a sense of responsibility to maintain the saving account. They can talk freely about budgeting and any money related issues, as both are contributing to the same account.
4. Start having a ‘No Spend’ week every month
If you really want to complete your financial goals in 2019, then you must lower your total monthly expenses as much as possible. It often happens that some unexpected bills strike on your monthly budget. Then it might become difficult for you to maintain a balance between your financial goals and strategy. To handle this situation, you may start following a “No Spend” week. Discuss with your spouse and choose a week. Do not make any purchases or other expenses except gas, essential food items, or important repair work. But make sure you pay off all the essential and basic payments prior to that week.
Such a “No Spend” week is a small but wise strategy to fulfill bigger financial goals.
How can you refrain yourself from spending? You may skip the morning coffee or take a lift from your neighbor instead of hiring a cab. If possible, you and your spouse can go to the office together, to save cab fare. Instead of having small snacks at restaurants or pubs, make sure you get your big meal from home.
You may cancel your expensive gym subscription and start working out at home together.
5. Ask your kids to join
Kids love games and fun. They also naturally invent various methods that may turn your financial quest much more interesting. Use their mind and energy for inventing financial games. Gradually you’ll find them as the most eager and avid players among all of you.
You should teach them how to set financial goals and achieve them. For example, ask your kids to do grocery shopping with a limited budget. Give them $150 each and tell them to full the cart with all the required items. Give rewards if someone buys fruits and vegetables more than chocolates or soda. Teenagers or older kids might take this challenge more seriously. They may also innovate new financial strategies to save more.
You may give them $10 each and tell them whoever saves the most will receive double the amount saved as a bonus, next day. Maintain this reward program for a week. You’ll see a big positive change in your kids. They’ll be eager to save more than spending.
Preparing financial plans and strategies won’t help you to complete your goals. It is up to you how you are implementing your plans. The more you become creative, the more you make your financial quest interesting by gamification, and you’ll get that much fun to fulfill your financial goals in 2019.