Prepaid Discover Card Keeps Spending in Check

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Jeremey over at GenXFinance reviewed the new Discover Prepaid Debit Card.  The card is focused on teaching teenagers about controlled spending and maintaining balance limits, which is great.  But what about those Gen X and Gen Y’ers who don’t trust themselves with their plastic?  A good way to impose restraints on unruly spending?  We think so. Read more

Review Corner: I Will Teach You to be Rich by Ramit Sethi

A few weeks back, I was able to get my hands on a copy of  Ramit Sethi’s (a personal finance blogger gone best selling author) new read.  Sethi’s book, “I will Teach You to be Rich” is a six-step program offering financial advice for people just starting out managing their money.  Like most financial know-hows, IWTYTBR doesn’t break any new barriers when it comes to basic financial principals.  But let’s face it:  personal finance isn’t nuclear science.  A successful PF book teaches people how to implement those basic ideas into their daily routine and make them stick.

I’ve read a decent amount of personal finance and investment books, and the ones that I find particularly effective and worthwhile are always the ones that break down the financial jargon into simple to understand terms.  No investopedia needed.

Luckily, Ramit’s book fits the bill with its easy-to-understand concepts and injected case studies that further explain financial concepts with realistic scenarios from friends and blog readers.

The starkly different concept of Sethi’s book, however, are his ideas on spending.  While hoards of other financial writers and bloggers will praise frugality and lecture you on the merits of reusing ziploc baggies and making your own laundry detergent to save $6 a month, Ramit does quite the opposite promoting an alternative to traditional budgeting called a “Conscience Spending Plan”.  And in doing so, he succeeds at bringing a sense of reality to money management.

As an example, in his chapter on controlling expenses he discusses his friend “Lisa’s” shoe spending — dropping a whopping five grand a year on footwear.  However, he further describes, that along with a healthy salary, she also still lives with a roommate, nixes expensive electronics and keeps eating out at a minimum.  While her priorities may seem out of whack to the rest of us, she’s spending money on the things that are important to her, while conserving funds in other areas of her life that she deems less important.

IWTYTBR revolves around a six-week program promoting a different financial concept each week that includes:

• Setting up credit cards and improving credit history
• Setting up the right bank accounts by negotiating no-fee, high interest accounts
• Opening and managing your 401(k) or Roth IRA Investment account
• Analyzing your spending and conceptualizing a budget that fits your spending
• Automating your banking infrastructure to make things run as smoothly and flawlessly as possible
• Learning how to get the most out of your investment accounts with very little work

At around 250 pages, it’s a quick read — and definitely worth your time if you’re like most people and trying (or perhaps forced?) to restructure your finances during the down economy.  And with the majority of young adults exiting college with an average of $12,000 in student loan debt and 66% having at least one credit card, it really couldn’t come at a more opportune time.

You can pick up a copy of Ramit’s book here , take a test run of a few chapters here, or you can play our little game in the Comments section for a chance to win a FREE copy!  Keeping on the topic of personal finance, we’re asking you guys to chime in with your own tips for saving money and managing your finances.  Our favorite tip wins a brand spankin’ new copy of I Will Teach You To Be Rich.  Contest officially closes on May 1st at 5pm, and the winner will be announced on May 4th.

Interview with BillShrink’s Peter Pham

We’ve been getting lots of inquiries about BillShrink, the free online website that analyzes credit cards and phone bills to find the best deal for your specific needs.  So after giving a couple of thorough overviews of the services, we decided to go straight to the source and get some information about the site firsthand about what spurred these guys on, what to expect from the service, and most importantly, where they plan to expand to in the future.  Keep on reading for our Q&A with BillShrink CEO, Peter Pham.

The concept of BillShrink is great.  What prompted you to develop this service?

It started out of frustration that [Co-founder] Schwark had when trying to find a cell phone plan for his family and after a complicated and frustrating experience calculating the most optimal plan for his usage, he realized that millions of other people must have the same frustration. The same complicated choices exist for many other bills that everyone gets and then keeping up with the changes of the market would be next to impossible.

Has there been a big increase in users on the site due to more people actively looking to find as many ways as possible to cut costs?

Yes, definitely there has been an increase of traffic to the site over the last few months. Given the current economy it’s important to make sure you aren’t overpaying on your cell phone and making sure you are on the right credit card for your lifestyle.

How many credit cards and phone plans are currently represented on the website?

There are over 200 credit cards on the site today, and every plan from the 4 major carriers which make up over 10 million combinations.

How often are the plans updated?

The plans are updated on a constant basis, always with the most current plans, options, and phones available in the market.

Once people are signed up with the service, do users get periodic updates on new plans that have more to offer than their current ones?

Yes, carriers come out with new add-ons, data plans, combinations, and plans every month and we keep track of those to changes to continually make sure consumers are on the right one that matches their usage.  It’s not always about switching carriers, but many times just optimizing which plan and addons that fit your calling pattern.  For credit cards, new promotion, earning bonuses for points, interest rates, penalty fees etc are always changing and we keep track of those as well.

What is Bill Shrink’s user demographic?

Pretty evenly split between male and female but over 75% over the age of 35.

Wow, I’m surprised there aren’t more users in the 20-30 year old age range given the level of comfort they have with web 2.0 technology and managing their lives online.  Do you think this is due to a lack of financial awareness in the younger generations?

I think because most of our buzz has been in main stream media, but also that yes, 20-year-olds aren’t as financially aware.

On average, how much money do customers typically save when signing up with the service?

The free service we provide for consumers on average can save consumers $300/year for cell phone plans and over $1,000/year for credit cards.

Do you have any plans for the company to branch out into other industries – maybe internet providers or cable companies?

Absolutely, we are looking to aggressively expand to many  different industries that cover everyday services for the average American and internet/cable is on that list

Editor’s Note:  BillShrink also has a great financial blog — Shrinkage is Good — on their website with great tips on saving money, raising your credit score, and lots of other vital financial advice.  Check it out!