How to Gamify Your Budget

Many consumers love games. So, our goal today is to help turn a love for games and match it with something that is pretty boring: budgeting and money management. If you can turn budgeting into a game you can beat the high score and ideally be swimming in extra money and savings.

There is a very concrete connection between saving money and having a well-planned and well-defined budget. Consumers who are good at budgeting typically have a great understanding of price fluctuations and therefore are more attuned to price sensitivity leading to extra savings elsewhere as well. These consumers tend to have extra savings and find better prices when grocery shopping.

Unique Tips to Gamify Budgeting & Money Management

You first need to create a benchmark month that will be used as your score to beat, you can do so using a monthly budget calculator for each month of the year. If you don’t first have a budget completed it’ll be very difficult to gamify it!

Creating a Benchmark Month

In order to get your benchmark month, we take the average of all monthly expenses over the course of the year and divided by 12. Once you have your average monthly budget, you have a benchmark you can put your skills up against in the hopes that you lower your monthly expenses. You’ll use this to keep making new high scores! Creating an average benchmark also helps since many expenses might be paid annually, semi-annually, quarterly, etc., and can be sometimes more difficult to incorporate into a simple monthly budget.

Beating Your Benchmark Month

Now that you have your benchmark month in place you can like to start surpassing it and creating new high scores in terms of savings and monthly expenses with your new budgeting tips.

Categorizing Average Expenses

When you categorize average expenses for your budget, you can get a ballpark estimate of how much you allocate towards a certain category. For example, if you spend $200 a month on poultry, meat and fish products you can more easily try to acquire the same amount of food for less or leave the food out entirely since you have the knowledge of what you typically spend and how to beat your previous score.

Paying Attention to Fluctuations in Price

It always helps to pay attention to fluctuations in price. If you tend to buy coffee in bulk and notice that coffee tends to go on sale every couple month or so, try to stock up when it’s on sale so that you can avoid buying it when it’s not on sale.

Bulk Purchases

Bulk purchases can be a double-edged sword for consumers who don’t know how to utilize them. They can either make you spend more or can help you save more depending on how you go about things. If you’re looking to buy certain grocery products that you know you’ll be buying no matter what, it might make sense to buy these items in bulk especially if they are non-perishable (i.e. paper towels, toilet paper, soap, etc.)

What is The Best Way to Implement This into Your Budgeting Habits?

Take the time to really categorize your savings, spending & earnings for each month. If you can do this well you should excel in achieving new high scores and getting a better handle on your budget and spending. You want to use these three categories as a “benchmark” or “high score” that you should look to surpass each month. This works well with individuals that are particularly competitive and the good thing is that you can use different benchmarks, you may earn more money one month and save more another, etc.

How to Handle Things like Wealth Effect and Increased Spending When Income Increases:

When your income increases, counter the trend! Save more of your money, invest it, establish a rainy day or emergency savings. The best way to do this is by better understanding human nature. Account for the fact that things may not always be as “rosy” as they are now and things can change especially in today’s economic climate. In the long term, investing your extra earnings is always a much wiser decision.

To avoid spending more allocate more of your income into automatic distributions for savings and investing. It’s best if these distributions are automatically deducted from your paycheck.

Tactical budgeting will also help in this scenario. If your income has increased by 20% you need to be fully aware of what you are spending on and understand that you should not increase spending by the same amount “just because”.

Benefits of Budgeting:

Consumers with concrete budgets keep track of their spending more and therefore are much more conservative in how they spend. Like anything else, this is a habit and skill we must learn to build on and practice repeatedly. The best way to incentivize budgeting habits are by gamifying the experience. Treat each month as a benchmark that you are looking to surpass. Every time you set a new high score (meaning you cut more expenses) you will setup a positive feedback loop that reinforces budgeting habits and incentivizes savings.