Understanding What Is Gamified Financing

Well, who does not like to win something? Everyone likes to win. It is a psychological phenomenon. The same “winning” phenomenon is the substance of “Gamified Financing”. Although, the concept is relatively new in India; it is well established in Europe and America. Why this concept is relatively new in India? Because we are taught to save right from childhood. Every Indian person saves his money for something. That’s why a traditional Indian family does not or is reluctant to use Credit Cards because the psychology of Indian people is to save money and not to spend with borrowed money.

Gamification means turning a task or thing into a game where the winner gets some rewards and because there are some rewards, people get motivated to participate. Gamified Financing means basically linking your financial transactions to some “Reward-Based” financial transactions wherein “small but achievable rewards” are allocated for entering into a financial transaction.

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For example, if you have shopped online on Amazon / Flipkart / Myntra etc. you must have received an email or notification saying “you have won a scratch card” or “you have won a reward” for your recent spend on that online shopping portal. It is a typical example of Gamified Financing which motivates you to spend / shop on that particular online shopping portal because you usually get or might get some discount offers, cashback, discount, etc.

A recent trend showed that most people used their Credit Cards for shopping in the year 2021. The reason behind this is simple and obvious since Financial Institutions have Gamified Credit Cards in form of Rewards Points, Cashbacks, Special Discount Offers, etc. Although, primarily it is a marketing gimmick to promote Credit Cards or online shopping; the end user i. e. a customer is also benefitted in terms of “money savings”. It is a win-win situation for both the sellers as well as customers wherein products/services get promoted and a customer also saves money.

Gamification of Finances will definitely save you money and will motivate you to achieve your financial goals in long run. There is an old saying that “The money saved is the money earned”. If you are able to save some of the money which was anyway spent for luxuries, pleasure, household expenses, etc. then you will definitely have a larger bank balance than you usually would have had. You can use “Gamification of Finances” in saving more money for “Goal-based investments”.

There are many digital platforms/apps which can help you “save” your money or help you create your budgets etc. Although there are very few such platforms operating in India, you can design some of your own challenges to Gamify your Finances with the sole purpose of saving your hard-earned money. Create some reward-based challenges to achieve your savings in basically following ways:

Optimize your spending habits for smaller cash-outflows
Save money for goal-based investments
Create Emergency Fund for any eventualities
Create Enjoyment Fund for your recreational activities
Plan your taxes which are anyway an inevitable cash-outflow from your pocket

Ultimately, when your target is to save some money or allocate part of your income to a specific expenditure or investment, you can challenge yourself for achieving that goal in an optimum time frame. All you have to do is to create a budget, allocate funds and gamify your finances to achieve that allocation of money in the least possible time.

To begin with, design some “Monthly No Spend Challenge” amongst the family and see how family members end up saving money for that psychological desire of winning at the end of the day!! After all, when the reward for the winner is directly linked to a monetary benefit, it will be dear to everyone’s heart.

CA Amol Kulkarni

FCA

amol@rjkca.com

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