Video games and your finances have a lot in common. It’s easy to keep score, there are multiple strategies that lead to winning, and there are always tips and cheats available if you look, among other similarities. Below are the similarities and how you should strive to play your finances.
- Go for that high score – Not necessarily the highest on the board, but your own personal best. Whether it is PacMan, getting your mage to level 80, or your saving account balance, aim high, and really try for your personal best.
- When things don’t work out, just load a save game – Sometime we do things or try things and it doesn’t work out. Fine, go back to how you did it before, or try an entirely new method. The message is that if it doesn’t work for you, don’t do it. This could be budgeting and tracking every dollar, or the cash envelope method. Some things just click, and others don’t
- Get bigger weapons – Maybe the problem is you’re just not using a big enough club against your debt. Go get the BFG and go big on your problem. Go and see a professional and get your tax problem cleared up. Maybe you need a CFP to talk to you about retirement problems. Sometime you just need the big guns.
- Have fun – It’s going to be hard to convince yourself to do something unpleasant for extended periods of time. You need to either change how you feel about some, reframing it to see the benefits instead of the costs, or use some type of system to keep you motivated like the WAVE method of saving.
Level up – You should actively work to increase your intelligence, endurance, speed, and agility in a financial sense. Read blogs and books, work at trying to save diligently, pay your bills automatically as soon as they arrive, and build your emergency fund so that you’re agile enough to respond to whatever happens. Work toward higher levels and bigger challenges. With experience, you’ll be able to tackle them.
- Work with others on that hard quest – If you find yourself having trouble on something, start working on a team. Go find others who want the same thing and use them for accountability and assistance. Bring your spouse into the financial fold and work together on all the tough challenges. Even if you end up splitting the take, part of some success is better than all of failure.
- Play the game to your strengths – Some people are fighters, some people are mages, play to your strength. If you work best kicking and slashing your way through something first hand, making the mistakes and having the hit points to sustain you, go for it. If you like to plan things out, build up your fireball spell and then strike at an opportune moment, more power to you! Actively shape events so that you can use your desired strategy on them.
- Have a strategy – Whether you kill the biggest monster in the room first, or pick off all the little rodents first doesn’t really matter. It’s that you have a strategy and follow it. Use the snowball to pay off your highest rate debt first, or send in the $6 to finish off that low debt and cancel the card. Just have a plan and stick to it.
- Save your progress often – Progress in the financial sense is usually money. Save it often in case you run into one of those problems and you need to load a game. If you have saved something, it is significantly easier to deal with the problems. So save often and save as much as you reasonably can, as you’ll need it when you unexpectedly wonder into that guy with the super enchanted elven katana.
High reward means high risk – Do you go for that last level of the dungeon even though your health is low, or play it safe and go back to the inn at the nearby town? Understand that with higher reward comes higher risk. There are no free lunches, so if an investment promises 40% returns, understand that the odds are quite high you’ll end up with nothing.
- Real people play better than computers – you may be able to be the computer on the hardest level, but when you’re out there playing with the human players in the world, they do unexpected things, come up with unique strategies, and are hard to predict. All the planning and work in Excel can only go so far, remember to get out there with the humans and implement your plan.
So play your finances like a video game. Create your character, put in the time it take to get good, level up, and save often. You’ll have fun doing it, and who knows, maybe you’ll set the high score that everyone else will aspire to.
Readers, are you able to have fun while having a strategy to win? Or are you constantly throwing your financial controller against the wall in frustration? What’s your high score?
Karl Nygard is the original founder of Cult of Money and created the website to share his ideas on investing, personal finance, and more.