How much do you love money? Weird question, I know.
Wouldn't it be great if you could save enough money without being excessively frugal?
In India, 75% of millennials, young adults, and adults are literate, but only 24% are financially literate and stable by understanding savings, investment, debt, and budgeting.
However, most of these millennials are gamers who are good at gaming and have it habitual, so turning something they enjoy into savings is a boon.
Savings is the need of the hour, and after being stoked by a pandemic, we understood how essential it is for a person. Whether a long-term or a short-term goal, it is an absolute necessity. Now is the time to start. We have all heard stories of financial crises, or we have stood in the face of them. Savings can help you avoid such a crisis. No matter your age, it’s never too late to start your savings and see how to maximize them. But what should we do about it?
Games can be a very effective way toward financial independence. They keep us attentive to the task. The entertainment industry is dominated by gaming. From streaming to social media and the box office, it dwarfs all other forms of media. But what is it about gaming that has us so transfixed?
Games, by design, are meant to reinforce behavior and keep you coming back. The brain loves novelty. Games use techniques that activate dopamine and oxytocin in our brains, putting our minds in hyper-focused immersive states. Games reduce the stress of making decisions, so app designers have now used game structures to help people learn new information and make new decisions. And one of the most interesting applications is in the financial decision-making of your savings.
So, if games strongly influence our brains, how can we leverage games to make better financial decisions and save them?
And if we do, what’s the worst that could happen?
We all want instant gratification, but to get good stuff later, we have to save money, and that’s a painful stimulus for the brain. So it’s processed like pain when we have to give something up, like give up money. And so overcoming that requires metabolic energy, but the brain’s a lazy organ. It takes so much power to run your brain that it wants to idle most of the time. The brain compensates for laziness by forming pathways that allow us to achieve tasks on autopilot. And these are called habits.
Some gamification apps focus so much on fun, as opposed to a learning experience, that they are just like any other game. Financial savings are hard. In this way, by breaking down tasks in an environment that makes making difficult decisions fun, people can better understand what they're doing while changing their default behavior. And we get in the habit of, for example, savings.
Fello platform uses some techniques to change habitual gaming behavior into savings. A lot of people have trouble engaging with their finances. So how do we get you to start changing your behavior?
At Fello, we use incentives called prize-linked savings accounts to increase our users’ savings habits. Whenever they save money, they are rewarded with access to mini-games with cash prizes, which allows them to grow their savings even further. And those little rewards make them want to save even more. The prize money is won on top of interest, so users’ money is never at risk. They move the fun part of spending money, like buying games, into a savings component.
People love gaming. The gaming industry is a US$203 billion size industry in the world, and the people buying games are the people that least should be buying games. And so, how can we redirect that spending into something helping them in their lives? Prize-linked savings is one way to do that.
But not all gamification leads to better habits. Apps focusing on financial decision-making with a high return to taking risks can also establish negative pathways in the brain where you’re training the brain to take more and more risks. And do you want to be careful that the games you’re playing are not driving you towards behaviors that may not be adaptive outside the game world? Brains are wired for instant gratification, so when it comes to making financial decisions, we require patience, discipline, and help. We found that people want assistance when it comes to making difficult decisions. And so there’s a large portion of the US and a world population that is either unbanked or underbanked, and part of that is just lack of knowledge.
From my perspective, any app that helps you save more effectively is probably good, but I think we need to do a lot more work to figure out the neuroscience behind gamification. As such, we must design games that teach the player how to "level up in life," not just how to level up in games.
Comments