Gamifying Personal Finances with Mobile Banking

Blog Post created by mcafiero on Dec 13, 2016

There are several ways of achieving wealth in this world.  Truth is, almost anyone living in the United States can do it with a little guidance and discipline.  You don’t need to have a preexisting 6-7 digit income, or born into a wealthy family.  You don’t need a college degree, stock market smarts, or athletic prowess.  You can simply learn to live within your means and become obsessive about saving.


When I was in my 20’s and eager to become incredibly wealthy, I sent a letter to a family friend and expressed to him my interest of acquiring wealth, just as he had done.  This person was a business owner. Nothing extravagant; he simply owned a metal recycling plant in Alabama.  But I also knew that he owned a couple of retro airplanes, an impressive home, a Ferrari... all of the things that seem so unreachable.  I was drawn to learn his story, as I knew that he did not start out having even close to the wealth that he had eventually earned for himself.


I found a package in the mail a week later.  A book, from the mentioned millionaire, and it was called The Millionaire Next Door.  I immediately took to the pages, and that’s when I learned that wealth doesn’t take an epiphany of good luck or skill.  Of course my career plans were far beyond the everyday person.  I planned on becoming an explosively successful entrepreneur!  But there was great peace in knowing that until I could join the ranks of success in my business efforts that wealth was a completely separate and totally achievable pursuit.


The big challenge for many of us is how to make saving money an appealing endeavor.  After all, for the common man, living within your means is hardly sexy.  And definitely not fun.  This is why so many Americans spend outside of their means, spending big money on brand names, status symbols, and sometimes just careless, uncontrolled, whimsical impulse spending.


In a word, the millionaire as described in this book is the unassuming common man who (surprise) is rocking the 7-digit bank account while driving an 8-year-old sedan to work every day.


Those who are successful at saving money have one thing in common:  The excitement they feel from seeing their nest egg grow outweighs the pleasure they get from spending on luxuries.


And when that practiced habit becomes an obsession, anyone can achieve wealth.


We were trained as children to save.  Well, everything but money.

As kids we collected rocks, stickers, and even things you'd never want to keep around, like a gallon jug filled with emptied sunflower seed shells from several days of consumption (wasn't me, I swear).  It seems as though we're collectors by nature!  My three-year-old collects monster trucks and parks them all side-by-side in his closet as if he feels a sense of pride for his growing private lot.


When I was 12 years old, I found a passion for collecting baseball cards for several years, and felt proud of my jam-packed shoeboxes filled with the smell of stale gum and press-printed cards.  One day, I started to wonder why none of my friends have ever thought to collect...  money.  Money is not as fun to look at compared to baseball cards, but a box stuffed with cash is a lot more exciting than a box full of cards. Funny how that works.


So I began collecting money, and felt a lot of pride in my collection, until one day I decided I had to have a Nintendo gaming system.  The money collection vanished, I spent too much time trying to save the princess in Mario Brothers, and my money collection disappeared into thin air.  Saving money was no longer as exciting as the pleasure that I got from spending.


28 years or so later, I have exercised the same kind of discipline for losing a few lbs that I use for saving money; I can get it done, but it's hardly fun.  I am still looking for ways to rekindle that kind of passion for savings, and I realized just yesterday that fin tech could help change our attitudes about saving money. Perhaps technology can make saving fun again.  Perhaps technology can train millennials who get a bad rep for being “entitled” to actually start saving and move out of Mom and Dad’s basement.


Collecting Money as Adults -'There's an App for That!'

Have you ever had to pay for childcare?  It's more expensive than college; my wife and I spend about $2000/month for our little ones to play games with other kids while we go in to work.  Add in a mortgage, a couple of car payments, wine, margaritas, Mexican food, concerts, hairdos (my wife spends about 20x what I spend on this), etc... and suddenly the extra savings you’ve pledged to accumulate gets lost into the blur of sweet relief from our hectic work schedules and weekend entertainment.  But what if... part of your entertainment was your new hobby in building the largest nest egg imaginable?


This week we discovered Simple Banking, an app-driven banking account.  The concept is indeed simple: you simply ditch your traditional banks, and replace it with a "Simple" checking account. Then you program ALL of your recurring payments (daycare, mortgage, car payments, insurance, ultilities, auto-transfers to savings accounts, etc...) into an automated bill-pay schedule.  You also set up your direct deposits into your new account.  Upon success, the Simple app, tells you in real time, your "Safe to Spend"(R) balance, so you don't go overboard on your personal spending.


“Safe to spend” is an easy concept: The money you’ve deposited, minus the money you’ve got scheduled for recurring bills, plus savings, equal your Safe to Spend balance.  It doesn’t take a rocket scientist, yet millions of Americans don’t take the time to consider this very elementary formula for smart budgeting.  It seems we need an app for that.

The app, by the way, has a dashboard that is clean and informative and takes banking to the next level of efficiency. This constant visibility encourages better money management decisions in your daily lives.  Further, you can declare anything outside of your survival spending - a BMW, for example, for which you can set up a savings plan by entering the total you'd like to save and the date you'd like to buy your cool new ride, and it will take the daily amount needed to save out of your Safe to Spend balance.




My wife and I chose to leave all our recurring expenses in our long-time checking account and we also decided to leave our paychecks there as well.  However, we had a short meeting to determine the least amount of money we think we could survive off of where food and gas and haircuts are concerned, declared a dollar value, and using the Simple app, generated a PDF document that we can send to our HR personnel to have that amount transferred automatically from our paychecks to our simple card.   So that becomes our available spending money, and we don't have to worry about overspending.  Ever.  We love this.


Budgeting: Gamified!

Taking things a step further, I challenged my wife, insisting that I'm far more frugal than she is.  So I've made a game out of this, and the rules are as such:  Every Sunday is (family) date night.  The person with the SMALLEST Simple balance ALSO must pay for the date!  Nothing like a little friendly competition.


FinTech:  My Request

Now, if I were working for Simple, I'd propose to add some gamification to the app.  For example:  Keeping track of my average grocery store outings, and alerting me if I'm above or below my average monthly spending on groceries.  This could also be applied to eating out, gas, and any category of spending, really.  Obviously the goal would always be to land below average if the game is about saving money.  So earning rewards and even the ability to taunt my wife via the app by alerting her when she's outspending me.  I feel this could lead to a lot of excuse making, i.e. "well I have had to go to the grocery store more than you!", but all in all, the end result would most likely be tighter spending, looking for better deals at the store, etc.


Last month, wrote a great article about IoT in grocery stores.  Why not tie this functionality into a budgeting/checking account app like Simple.  For example:  upon checking out and purchasing my groceries, could Doug's grocery store IoT and Simple's app calculate your spending efficiency?  What if you learned that from not buying sale items that you lost out on $225 in savings for the month?  That might encourage you to shop differently!


Taking it a step further, what if after checking out, you were diligent about buying sale items over regular priced alternatives and your Simple app alerted you upon checkout:  "Congratulations!  You saved $37 by shopping smart today!  Would you like to transfer $37 to your savings account, or apply it towards your BMW goal?"  A single click routes the funds.


Suddenly savings could transform from a painful task, to an exciting daily endeavor.  And that is how to win in the game of personal finance.