Using Gamification to Boost Your Progress to Financial Independence

Today we’re talking about some geeky stuff, friends. But geeky in the best possible way. Of course, I can’t talk about geekiness and not think of this:

That, friends, is Hogwarts Castle at Universal Studios Hollywood, where Mark called in a favor from an old work contact and got us a VIP experience last week. Because he knew how gaga I would go over it, and he was right. It is to see Harry Potter and the Cursed Child on Broadway that we’re going to New York in May (NYC friends, make sure May 5 is in your calendar for the Manhattan meetup!), and short of owning a Hogwarts robe (because those things are expennnnnnsive) I’m as into this stuff as a grown ass person can get.

But we’re not here to talk about Harry Potter geekiness today. We’re here to talk about money geekiness. Specifically how you can use one of the very best parts of geek culture — gaming and gamification — to boost your progress to financial independence.

And there’s a giveaway, too! Which is a lot like magic!

I’ve been writing this blog for a bit more than three years now, but I’ve been going to town with spreadsheets and graphs for far longer. Why? Because it makes personal finance so much more fun. Just creating a budget for the sake of having a budget is no fun at all, and saving money just to save money is hardly motivating and could end up feeling like more of a sacrifice than it is.

But when you start tracking progress over time, and building that out into pretty graphs, you feel the progress in a different way, you get motivated to try to speed that progress up and some of that fun factor creeps in. I defy anyone to come up with a more fun way to spend a Friday evening than updating spreadsheets and graphs! (Just kidding.) ;-)

Well, turns out that, without realizing it, I was actually gamifying our finances by doing our tracking that way. And I think that has more than a little to do with us reaching our goal. Apparently I’ve been a big fan of financial gamification all along, and that’s why I’m so excited for today’s post.

Interview with Kristin Wong, Author of Get Money

My friend Kristin Wong’s new book Get Money came out yesterday. (Note: That’s an affiliate link. Keep reading for more from me on this, because I’m pushing for more blogger transparency.) It’s Get Money like “Go get that money!” but more so a book to help you “get” money. Get it? ;-)

Kristin is a long-time finance writer for New York Times, Lifehacker (you might recall her Basics of FIRE piece) and a whole bunch of other sites you know and love, and she’s embracing her full money geekiness in the book. JD Roth wrote a great review of Get Money on Get Rich Slowly that you should definitely check out (spoiler: he loved it), but we’ve got a special treat here. Kristin and I chatted about how both her book and its core premise — gamification of your money — can be applied specifically by those working toward financial independence or early retirement.

Enjoy the interview, and stay tuned for info on a giveaway at the end of the post!

Tanja: Congrats, Kristin, on launching your first book! I’m so excited for the world to have more from you in book form, and I’m especially excited to talk with you about Get Money on Our Next Life, because folks here will relate big time to the money geekiness. ;-) First off, what inspired you to write Get Money?

Kristin: I’ve been writing about money for about five years. And I’ve always used writing as an exercise to work through my own issues. I did that with money. I had no idea how to manage my finances, and I was tired of being broke, so I started blogging about it over at Get Rich Slowly. My writing resonated with readers, and the more I began to understand how money works, the more my writing took off, and I started contributing to places like Lifehacker, NBC News, Bankrate. Eventually my friends took notice, and they were like, “Girl, I didn’t know you had your financial sh*t together! Teach me what you know about money.” Whenever they said this, I always wished I had a book I could give them that included the best financial lessons I’d learned. So I thought, why not write that book? But I knew it wasn’t enough to explain basic money concepts to people. The old “knowledge is power” maxim does not always ring true when it comes to money. People don’t get their finances in order by simply learning about compound interest. They need to feel a sense of power, confidence and control over their money. So I really tried to focus on that with the book: helping readers gradually feel they’re “winning” at personal finance. It sounds nerdy, but I think it works!

Tanja: I know a big focus of yours in the book is to get really clear on your big life goals and values before you set your money goals, which is a lot like the “What is your ‘why’?” question that we talk about in the FI space. From your vantage point, why is focusing on life before money so important, maybe especially as it relates to FIRE?

Kristin: Money is just a tool. When we die, our regrets are never money-related. We regret not spending enough time with family, or not seeing our friends often enough, or working too much.

But the thing is, money affects all of those things. It can rule your life. For example, without money, it’s hard to go visit your friends across the country. Money can keep you in a job you hate, where you’re overworked and don’t get to spend time with your family. This is why it’s so important to learn how to master money. If you focus on money, and all of your goals are about money, then money is still ruling your life, in a way.

Money is meant to be used as a tool. If you know what you want to accomplish in life, it’s a lot easier to figure out how to that tool to make those accomplishments happen. And I think this is applicable when it comes to FIRE. For me, the main draw of FIRE is the freedom of not having to consider money in my decisions. I want to be able to do everything I want — write books, visit friends, travel — without having money rule my life. Reaching FIRE is just like reaching any other money goal. You have to identify why it matters to you, why it’s meaningful, so that you actually have the motivation to stick with it — and so you know how much you need.

It’s also worth noting that there are some things FIRE will not solve. If you hate your job and don’t know what you want to do in life, FIRE is not necessarily going to solve that. I think you need a clear understanding of how you can use FIRE as a tool to accomplish your goals.

Tanja: I love the idea of using FIRE itself as a tool! And thinking of money as a tool and not as a status symbol is something that puts you in good company here! While the FIRE community talks about using money to let you never work again, that is only one definition of “financial independence.” FI could also mean not relying on others for support and having enough money to be able to turn down work that doesn’t speak to you, so you have control over what you say yes to.

Kristin: Totally. I think the key word is independence. I think of FI as independence from money. Like, you don’t have to worry about it as much, and if you do work while you’re in FI, it’s just “extra,” you know? To me, financial independence has nothing to do with whether you work or don’t work. The allure of it, for me at least, is being able to make decisions without having to think so damn much about money.

Tanja: One of the things that really sets your book apart is your focus on gamification of your money. As someone who enjoys a bit of XP here and there, this really spoke to me. Can you share more about what gamification is, for those who aren’t already familiar?

Kristin: A lot of people think of gamification as a gimmicky, geeky “points and leaderboards” type of thing. But when done right, gamification is so much more than that. It’s all psychological. Gamification is essentially the process of using elements of game design to make otherwise mundane tasks more engaging and fun. When “users” are engaged, they feel motivated and empowered and they want to complete the task at hand.

Think of the McDonald’s Monopoly sweepstakes. Buying a Big Mac? Not terribly exciting. But when you add rewards to the mix, suddenly you want to buy more Big Macs. And there’s this idea of competency: you feel you’re actually making progress and moving through the “game.” Buy more fast food, make more progress.

Not to knock McDonald’s, but you can use that concept for healthier habits, like building a budget or getting out of debt. These things are boring! Nobody wants to do them! So in the book, I use many of the elements of game design to motivate readers to complete these otherwise mundane money tasks. I wanted to make them gradually feel they’re “winning” at personal finance. So as they read the book, do the exercises, take the quizzes and complete the assignments, they feel a bit more empowered over their money.

One of the more complicated elements of game design is feedback. Users need to feel like they’re on the right track with their progress. This was hard to do with a book! So I actually take the book online. You can go to a website to watch video tutorials, download worksheets, get feedback in the Get Money group and so on.

Tanja: How do you think people pursuing FIRE especially can use gamification of their money to help them reach their goals?

Kristin: Here are just a few elements of gamification, based on Yu-Kai Chou’s framework in the book Actionable Gamification, along with some ideas for using these elements with FIRE.

Epic Meaning: Users need to feel like they’re contributing to a bigger picture. In practice, this is why it’s important to establish WHY you want to be financially independent in the first place. What does FI represent to you?

[Tanja’s addition: The idea of FIRE as a tool fits really well here, too. What will achieving FIRE allow you to do that adds meaning to your life? Answer that and then undertake your epic quest!]

Social Influence: Users need feel connected with others going through the task. You’re reading this blog, so that’s a good start. Join FI groups. Get an FI accountability partner. Any method that offers feedback on where you’re at in your FI journey will motivate you to stick with the goal.

[Tanja’s add: This doesn’t have to mean spilling all your numbers to others, but find support online or in real life so you have folks cheering you on.]

Accomplishment: Reward yourself! This is also known as “gold star” effect. Users need to feel a sense of progress and accomplishment going through the process. So reward yourself for your FI savings milestones!

[Tanja’s add: You know I am a big believer in the gold stars. Award them to yourself shamelessly, and then throw in a real reward for the big milestones.]

Tanja: I completely agree with those ideas. And even just thinking about them as a game makes the whole journey more fun, like a quest instead of a slog. So this is outside the topic of your book, but do you think of yourself as on the FIRE path?

Kristin: It’s definitely something I’m interested in for all those reasons I mentioned. Right now, I’m sort of in the “what is your why” stage. I want to figure out what I want for this next stage in my life, what it takes to get there, and how FIRE fits into all of that.

Tanja: That makes total sense. I can’t wait for people to read your book! 

Gamification Takeaways

There’s lots more in Kristin’s book that folks at all levels of financial knowledge will find interesting, but here are a few takeaways from this interview, Get Money and my own thinking about how we inadvertently gamified our finances, which helped us level up again and again:

Identify Your Own XP (extra points) — There are a lot of things you can track, but ask yourself which metric gives you most pleasure. For us, it was always dumping more into our taxable index (phase 1) funds, so that was our XP. The thing that fires you up the most is the thing that will keep you focused on the goal, so make sure you’re earning some of that XP, even if it’s in tiny increments, to keep the journey fun and to make sure you continually feel the progress.

Find What Gives You a Sense of Control — I’m positive the “latte factor” is a thing because it’s not only a good example of how small numbers add up over time, but also because it’s a great example of a discretionary purchase that’s entirely within your control. So encouraging people to cut out the lattes and save the money instead gives them an immediate boost in their sense of control, which improves their likelihood of sticking with a plan to reach their financial goals. Figure out even a small habit that you can focus on that improves your financial position, and build a positive streak there.

Make It Pretty — You can interpret “pretty” to mean whatever you want, and it doesn’t even have to be aesthetically beautiful, but find a way to track your finances that makes you happy to look at it. I love doing charts in PowerPoint, but lots of people love bullet journals or incredibly detailed spreadsheets whose beauty is in their complexity. The more you like looking at it, the more you’ll engage with it and stay on track.

Reward Yourself — Not to be confused with “Treat Yo’self,” reward yourself for hitting milestones, even little ones, just as you would earn new characters or prizes in a game. Every time we hit a particular increment in our savings or in paying down the mortgage, we’d cook ourselves a nice dinner, and we popped Champagne for the bigger milestones. That made the journey more fun, too.

Transparency and Affiliate Links

I’ve said it before, but it’s always worth repeating: I will never stop plugging friends’ books. ;-) Even if they send me one for free, I always buy one too, and then recommend them here if I like them. Which is great for friends, but poses a problem when it comes to the question of whether to take a cut of those sales in the form of affiliate links… blogger transparency and all.

For years, I just posted straight Amazon links and didn’t make a penny off anyone’s sales. Those free recommendations helped the Charltons sell a bunch of copies of their book, and I was happy to support early retirees who’d helped us develop our plan. But gradually, blogging got more expensive. Boosting up the design and features of the site meant paying for a more robust hosting package. Dropping photos into every post means paying for Photoshop. Maintaining an email newsletter list costs soooooo much more than you’d imagine if you’ve never seen the prices on these things. Even without talking about travel to FinCon, which I mostly see as a way to hang out with a bunch of friends in one place, blogging became a very expensive hobby. And given that we already had skiing as a non-negotiable line item, it seemed like a bad call to maintain multiple expensive hobbies. But I was also not willing to give this up.

Of course, you already know how I feel about putting ads here, and about plugging certain financial or web hosting products just because they give a big kickback. No shade on bloggers who do that stuff, but it’s not for me. I realized, though, that I’d always plug friends’ books, and also that Amazon probably has plenty of money at this point and can stand to give up a few pennies on each transaction.

And so I made peace with posting a very limited number of affiliate links here, on the Resources page, and with a very specific and limited goal: to cover my out-of-pocket costs associated with running this site. I said so on the Resources page when I changed the links to affiliate links, but I’ve recently beefed up the disclaimer, because I think readers deserve to know why I’m recommending my list, and whether they can trust that, or whether I’m only recommending stuff for the kickback. So here’s what the Resources page says now:

[UPDATE: I’ve tweaked this language to allocate any income above costs to charity, thanks to the many excellent suggestions to do so in this post’s comments.]

Our Next Life is not monetized, for a whole bunch of reasons. However, there are some large costs involved with operating the blog and newsletter that make this an expensive hobby, one that’s hard to justify on a retired budget. The books I recommend include affiliate links, and the revenue from them (around $.46 per book purchased) covers a small fraction of the out-of-pocket costs of providing ad-free, unsponsored content to you at no charge. My aim with the affiliate links is — absolute best case — to break even on out-of-pocket expenses, so that providing this content isn’t a money pit for us. But here’s my commitment: In any calendar year in which affiliate income fully covers the cost of web hosting, photo editing and email list maintenance (the latter is the biggest expense by far!), I will donate all earnings above and beyond expenses to charity directly or to our donor advised fund for charitable giving, for the remainder of that year. And of course I’m thrilled if you go check these books out at the library instead!

And now you know the deal.

(P.S. I treat our podcast sponsorship money on The Fairer Cents the same way, and use any extra beyond podcasting expenses — which are high! — to offset blogging expenses.)

The Get Money Giveaway!

I’m super excited to be able to give away a copy of Kristin’s book courtesy of Hachette Books! (Of course you can short-circuit this process and guarantee yourself a copy by buying it here. Or, you can always help an author out by requesting that your library purchase both a hard copy and an e-book license of that title. Library sales are real sales that support authors, and they cost you nothing beyond the tax dollars that are already keeping the library’s lights on.)

To enter the giveaway, leave a comment on this post stating your favorite way to gamify your finances, or something from this post that you’re going to try. (See the interview above if you need inspiration!)

Comment entries must be received by 11:59 p.m. Pacific time (my time) on Sunday, April 1, 2018. The contest is open to anyone with a mailing address in the U.S. or Canada, and I’m happy to ship it to a winner outside that zone if you’re game to pay the difference in postage.

Good luck!

(As always, if you wish to comment but not be entered, just say so and I’ll count you out.) ;-)