Here's How Gamified Finance Apps Could Make Managing Your Money — Dare I Say It — Fun

Me, making a deposit in my savings: Yeah, I'm a gamer.

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When it comes to money management, I like to use lots of different apps that make things a little easier for me. I've got budget apps, investing apps, rewards apps, saving apps, apps for banking and education...the list goes on and on. But there's a big trend that I've been noticing in all of my finance apps recently: They feel more and more like games.

Drop / Via earnwithdrop.com

Here's a quick example of what I mean: I use the rewards app Drop, which works by giving me points when I buy something through the app, fill out a survey, or play a game on my phone. It feels like a game, but unlike when I go on a Words With Friends bender, with Drop I can redeem my points for a gift card from brands like Sephora and DoorDash.

And even apps that didn't feel very game-like to me before (like the budget app Mint and the investing app Acorns) have added sweepstakes giveaways where you earn entries by checking your budget or investing money. Personally, I really like some of these features. They give me a little extra push to take actions that I know I need to do anyway, and it's fun to daydream about what I'd do if I won the big prize.

Once I noticed the gamification in my finance apps, I started to pick up on it everywhere. And I had a lot of questions, like what happens in our brains when we're playing these kinds of games and whether games can actually help us build healthy money management habits.

Mint / Via mint.intuit.com

On the one hand, gamified finance apps can encourage some helpful behaviors, and many of us need a little extra motivation to be more proactive with our cash. But they come with some pretty important limitations too. So I put on my research pants (sweats, duh), made some phone calls, and learned a whole lot about our brains on games.

For starters, "Gamification basically means using game-like features to achieve certain goals, such as creating challenges and competitions and giving rewards, bonuses, and things of that nature," says Jordan van Rijn, Senior Economist at the Credit Union National Association (CUNA) and Associate Lecturer at the University of Wisconsin-Madison.

Yotta / Via withyotta.com

So pretty much any time you see leaderboards, rewards, points, and prizes, you're looking at an example of gamification. "Applied to personal finance, goals might include meeting a savings target, maybe for retirement or emergency savings or a down payment on a home, paying down debt, or making progress with raising your credit score," Jordan continued.

And when we play games (or use finance apps with game-like features), some really interesting things happen in our brains that make us feel good and help us focus. "There are many mental biases working against us when we try to learn something new, especially if it's a potentially boring or intimidating topic," Jordan said.

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"There's present bias, where we really just want to focus on the current situation; information overload, where maybe we get overwhelmed with too much information; or even things like overconfidence, where we just think we know it all. But gamification sort of puts things into the reward center of our brain and gives us that rush of dopamine and can also help us get into this feeling of flow." FYI, dopamine is the feel-good neurotransmitter that your brain releases when you get a reward or experience something pleasurable. Sometimes, just *anticipating* an event, like a future vacation or getting a cookie when you finish your work, can trigger your brain to release a little dopamine.

But let's get back to the idea of flow, because this is a big part of why gamification can be helpful. If you have a hobby that you love, you've probably noticed that sometimes you get into "the zone" when you're doing this activity. You get super focused on the task at hand (but in a really fun way) and can easily lose track of time.

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Psychologists call this feeling "flow," and people experience it during all kinds of activities, from music and the arts to sports and at work. It's thought that getting into the state of flow can help you sharpen your skills, learn new things, and feel good while you do it. Sign me up!

Being in "flow" feels really, really good, and the dopamine that we get from playing games helps to bring us into this state. So when we use apps that apply game-like features to our finances, they can actually help us overcome negative feelings like anxiety or being overwhelmed that we might normally associate with money management by nudging us into flow.

@thabookledge / Via instagram.com

Basically, when we play games, we're taking our brains out of work-mode and into a more relaxed and receptive state. "If you've come across Daniel Kahneman's book Thinking, Fast and Slow about the two systems of thinking — system one is very fast and intuitive, automatic, and effortless thinking that's able to make really quick reactions," Jordan says. "System two is much more deliberate, logical, and methodical, but system two takes a lot more effort. Gamification helps us get into that 'system one' mode of thinking, where we get into that feeling of flow and things are more fun."

Prize-linked savings accounts, like Save to Win and Yotta, that enter users in weekly lottery drawings for cash prizes are a great example of a financial service using gamification to encourage healthy money habits. The more you save in these accounts, the more chances you have to win a big chunk of cash. And unlike playing the regular lottery, you still have the money you "paid" for your tickets in your savings account, so you can't really lose.

Yotta / Via withyotta.com

And if you've been looking for a way to just boost your basic financial knowledge, there are plenty of game-like apps out there that can help you get a handle on this whole money thing. Jordan mentioned Zogo Finance, where you earn points by completing money lessons and taking trivia quizzes. Even better, you can redeem your points for gift cards or donate them to a non-profit like Operation Hope.

But gamification can be a double-edged sword. Because it's fun getting into flow, you could actually find yourself spending a bit too much time playing games and engaging with these apps.

@selfcareisforeveryone / Via instagram.com

You know how sometimes you pick up your phone to check something "for a second" and end up scrolling through Instragram aimlessly for two hours? This happens in part because your brain got an initial hit of dopamine from seeing a new notification, like, or comment, and so you spend more time in the app looking for more of that good, rewarding feeling. Believe it or not, the exact same thing can happen with finance apps.

So if you download one of these apps, be mindful of how much time you spend with it. If it's easy for you to lose track of time, you might even like to set a timer for 10 or 15 minutes to help manage your play time.

Another important thing to remember is that these apps can offer broad financial education or help you target a particular habit, but they aren't very personalized. So you might spend a lot of time earning points and getting rewards without really making progress on your individual goals.

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According to Dan Egan, Managing Director of Behavioral Finance at Betterment, "Focusing on the ‘game’ will make you worse off when the game's rewards diverge from your own in some meaningful way." This pitfall can be especially tricky if you're using an app that encourages you to compete against friends or other users. "If you’re in bad financial shape, but your peers are all in worse financial shape, knowing that you’re marginally better off than them may make you feel better…and may de-motivate you from getting into actual good financial shape. You win the game but lose at real life. So be wary of comparisons that don’t spur you to improve."

Dan also cautions to be wary of apps that gamify investing. "The platforms that gamify investing are trying to make money for themselves, not you, so the rewards are not necessarily optimized around you growing your money."

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"An app that gamifies the act of trading instead of investing will push you to churn your portfolio rather than let your winners ride, for example," says Dan.

Because investing is complex and every investment carries the risk of losing money, educate yourself about the market before you jump in or even think about engaging with it through games. "Just like Vegas, for trading set aside a specific budget to play with," Dan advises. "Check your ego periodically to make sure you’re not compromising any boundaries you set up initially. Track how much time you’re spending on the game aspect of things, and that it's in line with your priorities. Enjoying yourself is fine, as long as it doesn’t derail your real life."

You can also gamify your money IRL by setting goals, tracking them with family and friends, and treating yourself when you reach milestones along the way.

@savingforfutureme / Via instagram.com

You might try doing a savings challenge, a debt payoff plan, or picking another important goal you want to tackle. By taking gamification offline, you can use rewards to help you meet your specific individual goals rather than an app's broader goals that might not really suit you.

And if games appeal to you, there are other easy things you can do to help yourself stay on track with your money, like setting up automatic savings deposits and contributing to retirement accounts like an IRA or 401(k).

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"Make good behavior easy," Dan suggests. "For example, use auto-deposits, even small ones. Often people avoid saving anything because they feel like they can’t save enough. Start small, say with 50% of your eventual savings target. Do it for three months and see how it goes, then increase it in line with your comfort level."

At the end of the day, games can be a great way to get motivated to tackle your finances, but you should probably make sure you're using other strategies too.

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If you find that using an app like Yotta helps you save more money, or that you love getting rewards on your spending through apps like Drop, it's great to know that these game-like features can help you. But if you want to get the most out of your money, make sure you're taking action outside of an app too.

Do you use any game-like apps to manage your money or learn about personal finance? Tell us about them in the comments below.

And for more money tips and tricks, check out the rest of our personal finance posts.