Playing to win: Turning money management into a game

I am a gamer. All my life, I've been a fan of games of all types. I've played Dungeons and Dragons since I was in the third grade. During 2000 and 2001, Kris and I had marathon bridge sessions with another couple at least once a week. I used to host monthly game nights during which my friends and I played the latest and greatest European board games. For a while, I played in chess tournaments. And, of course, I've long been addicted to videogames.

No surprise then than I was happy to participate in a recent panel discussion at the IGDA summit, a conference for game developers. The topic? Practical personal finance. The other members of this panel were Courtney Stanton (of Subatomic Studios) and Mike Sellers (of Kabam). The panel was moderated by Dan Scherlis.

I didn't know the other panel members before the conference started. Because we'd never met, we spent a couple of hours beforehand preparing our talking points. I was impressed by how my colleagues tied everything back to gaming. Over and over again, they talked about the “gamification of personal finance”.

The Gamification of Personal Finance

The “gamification of personal finance” simply means using money management techniques based on game design principles.

Think of your favorite games — especially video games. What makes them fun? What makes you want to play again? How can these elements be extracted from game design and used in real life? In this case, for promoting smart personal finance?

At first, I thought the idea sounded silly. But I quickly realized that I've subconsciously been using game design principles to help me cut spending, boost income, get out of debt, and build wealth. My own approach to money management has been game-based for the past seven years, but I haven't realized it until now.

During our discussion, Stanton talked about her own experience with debt repayment, about how it felt like she would “level up” whenever she paid off a credit card or a loan. This kept her motivated to continue.

Dan Scherlis, our moderator, made an interesting point. Even as we're trying to “win” the game of personal finance, there are folks on the other side trying to beat us. The credit card companies, the transnational corporations, and even the professionals who are supposed to be on your side — they're all trying to game you, trying to get as much money out of you as they can. (This is exactly why I'm always saying that nobody cares more about your money than you do.)

Playing the Game

But how does this all relate to real life? For me, the answer is obvious. I can see clearly how using the debt snowball gave me game-like feedback about my progress, encouraging me to accelerate my debt reduction. I felt like I was winning.

The same is true with boosting my income. For years, it was a fun challenge to see if I could earn more money this month than last month. (Or more money this quarter than last quarter.) For me, my income was my “score”, and bringing in more money was my way of racking up the points.

I'm not sure what sort of game I'm playing now. It's as if I've reached the final stages of the game, and my goal is simply to maintain the position I've established. And I'm trying to find a way to do this while still having fun.

For you, making a game out of money management might mean something else. For instance, you might:

Budget $100 for groceries every week. If you spend just $85, then the remaining $15 is yours to spend on whatever you'd like.

Make a game out of spending as little as possible on dining out. How far can you stretch your restaurant dollar? What coupons and discounts can you find? Where are the cheap eats that taste good?

Make a paper chain representing your debt. Each time you pay off a certain amount ($100?), cut a link of the chain.

Give yourself a “bonus” for completing a “stage”. Maybe you're trying to pay off debt. Each time you eliminate one debt, you might give yourself some sort of small reward as a “power-up”.

Actually, a lot of the “money hacks” I've shared over the past five years are nothing more than methods for making money management into a game. Some examples:

To some extent, Mint uses game-design principles. It's a money-management tool that provides game-like feedback about your progress. And tools like Bobber (a targeted-savings app) explicitly try to make money management a game.

Note: In some ways, “gamification” is just taking advantage of feedback loops. With personal finance, that means getting constant data about your financial situation, looking for ways to improve that situation, and then pushing yourself to make changes. Once the changes are made, you look at the results and repeat the process.

Game Over

The “gamificiation” of personal finance isn't new. For decades, people have been trying to use game principles to encourage others to save. In 2008, for instance, I shared some financial advice my father gave me when I was only nineteen. He wrote:

You used to play lots of video games. One of them had a rocket and you had an energy level you had to worry about. Energy was used to travel and to shoot at the enemy. Life is a big videogame. In our society money is the energy. There are certain things you have to or should do so make sure don't shoot so many asteroids just for the fun of it that you deplete your energy level and someone has to flash on your screen —GAME OVER—.

Dad was decades ahead of his time!

This weekend, I'm flying to Indianapolis to hang out with former GRS staff writer Adam Baker at a gaming convention. It wouldn't surprise me if some of the games we played had financial themes.

But what I want to know today is have you ever thought of money management as a game? What rules did you set for yourself? How did you keep score? (Money in the bank seems like an obvious way to keep score, but some people might use net worth, and others might use investment returns, etc.) I'd love to hear how other people turn personal finance into a game.

Note: Sierra touched on this topic last November with her post about gaming the system.

In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he's managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.

Hey Luke, Since you asked, I’m actually working on a project called “The Frugality Game”. We teach principles from Get Rich Slowly like tracking your spending and the envelope system, and we provide tools to manage your real-life finances, but it’s all presented in the context of a game. Each step of learning is exploring a different location in the world, and you can earn tokens and badges for keeping up with your budget. It’s online now at The Frugality Game dot com. We still have a ways to go before it’s perfect (and we’re working on some other projects… Read more »

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Sceptor

8 years ago

JD, This topic is very interesting to me as well. I love all forms of games.

How my wife and I “keep score” is through tracking our net worth and using the Millionaire Next Door formula for UAW vs PAW to determine if we continue to head in the right direction.

I definitely viewed paying off my debt as a game. Now that I’m debt-free, I’m using net worth as motivation.

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STRONGside

8 years ago

I have never thought about personal finance in this respect, but I believe JD, that you are in the game now of an RPG. You have already beat the game (ie. you have paid off your debts, and earn more money than you spend) but now you are able to go back through the levels and play them again as a master. You now have the tools and skills to glide through the levels and pick up all of the pieces of information and value that you missed the first time through. You can now connect with other people who… Read more »

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Mike Piper

8 years ago

I can definitely relate to this. That’s a big part of what makes building a business so much fun for me–there are plenty of ways to keep score (traffic, revenue, subscribers, etc.).

Also, have fun at Gencon! 🙂

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Cassie

8 years ago

When we were working to pay off our mortgage, we played our own game, how low can you go. Making a game out of trying to get the household budget lower every month helped keep us focused on our goal and not on what we were giving up.

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Pamela

8 years ago

People who scout out the best credit card rates and move balances around to decrease their interest and get the maximum points are playing a game. I even know one person who maximized his credit score by figuring out when his American Express charge card would report to the credit bureaus and would make his payment right before. The problem is when people who get pleasure from financial gaming advise others to do it because it’s a great practice. Not all of us are cut out to “game” the 0% balance transfer. And some folks who play games they’re not… Read more »

I really believe that this is why I enjoy doing the household finances…because it’s a ‘win’ every time the savings balance increases and the debt decreases. Thanks for the great post!

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RC

8 years ago

The game I play is that I take my monthly budget amount and divide it by the number of days in the month. I make a chart out of that which is just a straight line going from bottom left to top right. Then I fill in my purchases from Mint every day and that is a second line on the chart. As long as my second line is lower than my first line I am staying within my budget.

Mint has a similar feature to this if you use their built-in budgeting feature. Each budget has a horizontal bar which fills up (left to right) according to how much money you spend on that particular budget ($0 spent, bar empty, etc.) . There is also a line located on the bar which represents approximately where you should be at with the budget according to what day of the month it is–similar to your system. For instance, if it were the 15th, the line would be located in the middle of the bar–regardless of whether you’ve spent half the money… Read more »

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ArandomPerson

8 years ago

If you play(ed) tabletop games like D&D then two classic movies are a must see (all for free on the web or you can buy a disk, etc.):

THis post really resonates with me – The reason I enjoy handling our family’s finances is that I do feel it’s like a game. I remember back when we had credit card debt, I’d enjoy transferring the debt from one zero balance card to another (in the days before balance transfer transaction fees). Once we paid off our debt and funded our EF, I became bored and we began to spend without thought. Now that I’ve got smaller targeted savings accounts, I’ve got a game again where I can watch the accont balances go up. I set little mini goals… Read more »

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No Debt MBA

8 years ago

I definitely find managing my finances to be a game. It’s fun for me to figure out the tricks and methods that grow my money the fastest or avoid pitfalls. In my mind I’m winning at personal finance most days. Keeps me motivated.

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Sarah

8 years ago

I’ve definitely thought of money management (and weight loss, and a variety of other things…) this way. Of course, I’m also a gamer 🙂 Interestingly, I’ve also had instances where I’ve found the fun part of games to be money management. There was an online game I played a few years ago, where you could set up in-game ‘shops’ to sell the items you had acquired (for the in-game currency), and after awhile I was having more fun with that, trying to manipulate the economy and figure out how I could get more ‘money’. I don’t know if you’re interested… Read more »

I heard about that, I wonder how long it would take to make back what you spent on the game.

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shorty+j

8 years ago

There’s a great iPhone/iPod app called “Epic Win” that turns to-do lists into an RPG. You get experience points in different character categories (social, spirit, strength, intellect, etc.) for completing different tasks, and the more tasks you complete, the farther your character goes on its journey, the higher you level up, the more magical objects you collect, etc. It is WAY more fun than it should be. It even has dramatic sound effects.

When we were students it used to be fun to save up a couple of hundred to do something special like a special dinner or some extra money for a couple of vacation days. However as me and my wife got better att the finances and also got higher incomes and were automatically saving about 30% of our income the little stuff became less interesting…so last year we started a game called ‘extra vacation money’ the whole idea was that anything we saved from our regular budgets (food, clothing, allowance etc even coins) we put in a special vacation account.… Read more »

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Roberta

8 years ago

I’m not a gamer, but I still relate to this article. For example, when I was paying off debt, I made a game out of how many “snowflakes” I could create every month, by selling little things online, driving less and paying what I saved in gas to my debts, etc. Now that my debt is paid off, I use similar strategies to see how quickly I can fund different goals, especially my vacation fund. It helps me redirect my spending… do I want to buy this sparkly widget before me, or put that money into my vacation fund? It… Read more »

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Kathleen

8 years ago

I love this concept! I definitley play my finances like a game. I use mint.com to track goals and race to accomplish them. If it hadn’t been for me setting time goals for certain things, I’d probably still be paying my student loans off at the minimum, thinking that the extra couple hundred dollars I had would be better off put to investments… unfortunately, without goals that couple hundred dollars usually goes to a shopping trip or two. Using the mint goal tracker, I’ve set it so that I can visually see how far along I am at paying off… Read more »

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Carole

8 years ago

While I don’t like to play most games, I do think of frugality as a game. It’s a challenge to get what I want for as little as possible. Or better yet to repurpose something I already have. I don’t reward myself. The reward is succeeding at the frugality game.

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Aaron

8 years ago

I’ve been addicted to Settlers of Catan for the last year or so. While playing the other day I realized that the same principals apply as far as having multiple sources of income and succeeding in the game (and in building your own wealth). During the setup phase (or while building out) it can be beneficial to make sure you have settlements touching resources with many different numbers (which represent the dice rolls needed to collect resources (income) from that source). Even though it may seem better to have put all your settlements on high % numbers (ex: 6 and… Read more »

I just don’t trust an employer to have your best interests in mind. The ability to say, enough is enough helps though. My boss treats me better because I can and do say, enough. If I needed the job I would be afraid to say it though. I like have multiple streams of income, it makes me feel safe.

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Jane

8 years ago

I don’t like playing board games, because frankly I am a sore loser. But what I do enjoy playing are online Zynga games on Facebook like Farmville. They rely on a system of micro rewards to keep you interested in playing. This is one of the reasons they are so addictive. Winning challenges or leveling up keeps you coming back for more. I could see how this principle could be effectively used in personal finance. If you could set up small rewards for yourself, perhaps that would keep you economizing. For example, say you manage to save “X” amount of… Read more »

I think micro-rewards are the best way to improve personal finance motivation (and gamification in general).

One of the biggest problems with gamification is that real life is *slow* compared to games. Games work by giving us feedback and experiences quicker and easier than we could get them in real life.

I’m working on hopefully applying your ideas to a future app from The Frugality Game.

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sillylittleTpot

8 years ago

I love using Mint.com as a way to keep track of my spending and progress towards goals. Particularly because of the charts. I HATE when I exceed my budget on something and the bar turns red. It’s like I just failed the objective for the game. But, the great thing about budgets is that I can set them myself, much like levels in a game. If I am not winning on level “EXTREMELY, RIDICULOUSLY DIFFICULT”, then I can adjust my budget to be able to win on “Difficult”, “Medium Hard” or “Easy”… all of which have their own personal connotations.… Read more »

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Debbie+M

8 years ago

When I paid extra on the mortgage, it was fun to compare how much I owed to how much I would have owed if I had never pre-paid on the mortgage. It was also fun to watch the date of the last payment change. Another game is the cross-over game from Your Money or Your Life. You graph your expenditures each month (and it’s fun to watch them go down) and your investment earnings (ideally, these are going up). When the two lines cross, you’re financially independent (or at least that month you could have paid all your expenditures with… Read more »

Every time I cash in my credit card rewards to get free stuff, even though I’ve never paid a red cent of interest, I am completely overcome with the feeling that I ‘ve “beat” the CC company. Heh. Its my smug little victory.

That’s great – if making saving money into a game gives you motivation, then you’ve found a winning idea. If more people found a way to do that with paying off debt…

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Rick Francis

8 years ago

JD wrote: >I’m not sure what sort of game I’m playing >now. It’s as if I’ve reached the final stages >of the game, and my goal is simply to maintain >the position I’ve established. And I’m trying >to find a way to do this while still having >fun. Just because you are doing well financially doesn’t mean you are done with all the accomplishments. It seems like it is time for you to set some new goals. You could always try to increase income, but what about trying to reach more people…. I bet it would be possible, but challenging… Read more »

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EWP

8 years ago

Fallout 3 and Fallout New Vegas can actually teach you a lot about making a budget and evaluating return on investment.

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Amanda

8 years ago

I’ve never thought of PF as a game. However, thinking back to when we were paying off credit cards it was an exciting “win” for me each time we paid one off. Now, things are pretty boring. I do feel like I win if I have a coupon. But at the same time I feel the same let down of losing (I’m a poor loser at real games too!) if I find a coupon the day after I could have used it. LOL I think I’ll be more excited now because I just got a job! I helped a friend… Read more »

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Jeff

8 years ago

As a lifelong gamer, which I eventually turned into a career as an RPG video game designer, I have to admit there is a certain satisfaction to managing my finances, whether it’s trimming my food bill by 30% one month or snagging an excellent game from Steam for only $5.

I suppose in the real world the Big Bad is the bank which holds my mortgage, but I do have plans to get them off my back well before they expect me to, and that will be a sweet, sweet victory.

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Jenna

8 years ago

This has more to do with groceries… But my sister taught me this one: How many points can you use up out of the fridge? So you go into the fridge and/or pantry and try to use up as much stuff as you can in one meal. Each item is worth 1 point. So if I use up a jar of olives, the rest of the carrots, a box of pasta, and a half eaten block of cheese in 1 meal, then it’s worth 4 points. It’s weird but it works in my head to make me use up my… Read more »

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brooklyn+money

8 years ago

Yes! I play it against the other members listed on NetworthIQ. Not that they know that, haha. I love to see myself move up on the various lists — by state, by profession. It’s something I think about when I think about increasing my net worth — if it will move me up on the lists. I feel less ridiculous knowing I’m not the only one who makes an imaginary game of personal finance.

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Lori+Blatzheim

8 years ago

I really like this post. In speaking with people about Thrift and how it can help them improve their lives, I hear comments about how difficult it is. People seem to think life will be serious and unhappy because they can’t spend money on anything they want. They are totally wrong. Thrift can be challenging but it can also be fun. I feel a sense of accomplishment when I study a little and find the best possible product for the least amount of cash. I feel much more relaxed when I pay for four new tires out of the emergency… Read more »

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Jacob G

8 years ago

As a lover of games of all kinds myself, I really enjoyed this article. I’ve noticed as I’ve gotten older I don’t seem to be into video games as much as I used to (but I enjoy the social aspect of board games when I get the opportunity). I now wonder if part of that is my gaming “need” is somewhat satisfied by the careful and detailed budget I now keep up almost daily? I enjoy trying to manipulate the numbers so I have more in the end, which is the same basic concept as many games. Perhaps I’ll have… Read more »

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krantcents

8 years ago

I don’t know if I keep score in the normal sense! I look at my portfolio to increase every year similar to my net worth. Personal finance and just about everything else is a game to me. At least I turn it into a game. It could be something as simple as getting the best price on something. For me, it is the competition that makes it a game. I am competing against the retail establishment or something else to get the best price.

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Katelyn

8 years ago

Thinking about personal finance as a game hasn’t been helpful for me, because I end up feeling hunted and exhausted by the constant effort to save MORE. I’m not terribly motivated by the idea of “winning” the “game.” Right now, what works is just setting up a system I can follow without thinking too much about it– a system that sends a bunch of money into savings, has my bills saved for a month or two in advance, etc. I still check my accounts almost every day just to track and make sure I don’t get overcharged for anything, but… Read more »

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Tom+S.

8 years ago

I think it was Don Lancaster who wrote that “The most exciting, most challenging, and the deadliest adventure games of all are played on spreadsheets.”

Who doesn’t love to play Monopoly? It makes perfect sense to make a game out of managing your money. People are far more prone to stick with something fun and enjoyable than they are the mundane.

It jives perfectly with the attitude one must have to get out of debt once and for all. You have to get excited about it and focus on the benefits and positives of it.

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Rosa

8 years ago

I set myself all sorts of little minichallenges – “No paying any finance or ATM fees this year”, stuff like that.

We used to do Chore Wars among my friends – I wonder if I should start that back up and put a personal finance area in. “Put money in the bank” “Lower a utility bill or credit card rate”, stuff like that.

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Patti

8 years ago

I definitely feel I “won” today when I convinced groupon to credit me for a groupon I didn’t use from 2010! Any time I decide to ask for something like a refund, I feel I have gained something akin to life points.

And, I have a game this summer– if I spend more at the farmers market then I do at the grocery store then I win! The goal is to eat fresh, buy less crap and support local farmers. In that game, everyone wins!

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Ryan

8 years ago

I’ve spent a lot of my life playing videogames, so this really resonates with me. I’ve tried to look at finances from a gaming perspective, and sometimes it works, but the majority of the time, it really is more out of necessity. Maybe as I get closer to seeing progress in my quest to get out of debt, I’ll be able to see some of the more fun aspects of it.

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Jenn

8 years ago

I’ve lately been thinking of my finances as a competition against myself, and luckily I’m winning. Every payday when my paycheck is directly deposited into my account, I take whatever was left over from the last month to savings, effectively starting fresh every month. I then try to see how much I can have left over at next payday, and if I can, increase the amount of savings each time. I’ve been at this for 3 months, and put away $185, then $290, and last month $400. Once I have $1000 in savings (next level!) then I’ll tackle the credit… Read more »

This is a great post. “Gaming” has helped me stay focused on many tasks, including personal finance. Nowadays, I use the ‘paper trading’ systems from my broker to practice stock/option trading and see how well my ideas will actually work.

This is a good way to work with kids too. I used to teach economics and finance classes to middle schoolers and games were the rule of the day.

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AnnW

8 years ago

My husband views refinancing as a game. He just heard that the next door neighbor just got a 3% rate for 5 years, so he is starting that up again. I think he refinances one house or the other every six months. I don’t know how to do video games, I am a little older, but the whole purpose of making money IS a game. You try to get more stuff for less money. You try to do more for less. Years ago, when I was trying to save money for a house, I would try to make dinner for… Read more »

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jayanath

8 years ago

As a lover of games I really enjoyed this article. I believe that this is why I enjoy doing the household finances as it is a ‘win’ every time the savings balance increases. a great post to read!

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Bella

8 years ago

Great post – I don’t tend to make a gam out of our financed. However, I do have to admit that I get a pretty big thrill out of personal victories of getting ‘something for nothing’. For example – I cleaned out the fridge and used every last vegetable I bought instead of going to the store – YEA!, I figured out how to fix the blind turner by locating the glue and (gasp!) gluing it back together saving a trip to the store for a replacement – YEA!. I washed both dogs, cleaned their ears and trimmed their nails,… Read more »

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Paul

8 years ago

In many instances, as a game progresses it also changes. It becomes more challenging. You are presented with new obstacles to overcome and you may have to improve/alter your strategy to move forward.

One “game goal” in personal finance might be to minimze the amount of interest paid on existing debt because interest on debt is basically “dead money”. Obviously the goal of the game is to become debt free. Therefore, with existing debt, if you can minimize the amount of interest paid, you can free up some money to accelerate paying down the principle.

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Yelena

8 years ago

I can definitely relate to this topic since that’s what we’ve tried recently – to turn our loan repayment into a game. We figured, that if we kept making our regular payment on one of our student loans, it’d take us 11 months to pay it off. So we set up a “kill this loan” game. 1 point was awarded for each $1 of regular payment. 2 points – for each $1 of an extra payment if it came from making extra money through side gigs. Half a point was awarded for each $1 extra payment if it came through… Read more »

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Tracy

8 years ago

While we have been getting out of credit card debt, I have been educating my other half about easy ways to get the best deal. He is a video gamer and loves the Unit Price game at the grocery store so much that not only is he upset if I go shopping w/o him, but he has also taught it to some of his other guy friends so they can save money, too. He also uses “reverse credit” asking for Gamestop cards for his bday and Xmas gifts. He saves them up and then “buys” a few games with the… Read more »

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Pat

8 years ago

Many people here mentioned RPG’s. Bioshock, a personal favorite of mine, had a particular system of economics in which a special substance could be used to purchase powerups. If a player waited, powerups would cost less if purchased at a later time (i.e. the next level), or a player could get better, but more expensive powerups if they saved their “money” and waited to buy it from a “vending machine” in a later level, as opposed to blowing all their “money” on every single powerup featured at the “vending machine” in their current level–whether it was truly useful or not.… Read more »

I love how a game can make something boring like money management, or building a house, or even something as simple as walking from room to room, FUN! (the room to room thing was a reference to Sims. The popularity of that game still baffles me to be honest.) Anyway, I just wanted to share another money game with you, since you seem to be such a gamer. This one is about the national economy, though. I work for Mango Money’s blog and we recently shared this one. People LOVED it. Check it out, gamers! http://www.mangomoney.com/blog/blog/become-a-budget-hero

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Hi! I’m J.D. Roth. I'm here to help you master your money — and your life.

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