I have had some fun with a few over-the-top ideas for those who are chronic over spenders (i.e. their internal shock collars seem to have gone off-line). I have thought about services that banks might offer worth their exorbitant monthly service charges.
What is needed is a system that:
- Sends spending alerts to your smart phone when you make a purchase. Sends your spouse an alert of what you have spent and an itemized bill of what you bought. Most credit cards will do this now.
- Updates are sent to your PC or Cell phone warning you when you are close to over-spending on a specific budget category. Useful to know if you have overspent on clothing this month.
- Causes your credit card to explode if over used. Maybe instead, it disables the credit card and forces the user to call with a specific pass code to have this lock-out overridden. Given most credit cards have a credit limit you’d think this simple. Most cards will usually just raise a users limit.
- Allows you to set up a “budget” for the month on-line which you can easily monitor. Maybe get daily and weekly reports on how your progress works
- Send a large wrestler or MMA fighter to your house to go over your monthly spending habits. If they feel you are not following the plan, put you in the sleeper hold? Maybe the bank sends over a financial advisor the first time, to discuss these points. They could show you a picture of the wrestler, pointing out what might happen if they don’t follow the plan.
- Rewards the consumer with a higher interest rate on their savings, or a lower service charge for each month that the consumer follows the financial plan. It is important that you must give positive feedback some times.
- Offer a points reward system that you can redeem for various rewards like Air Miles or such, thus creating a Rewards system for people who save instead of a system to reward spending that are currently in place.
Worth a Service Fee?
If a bank offered this service, I might view that as a good use of my money if I had to pay for the service. I don’t think I’d use this service (although I might try it out for a while). This might be what some folks might need, almost a Financial Nanny or Money Conscience concept. I copyright both terms.
Do most people need this kind of service? Maybe not, but it is evident that some folks might benefit from this useful concept.
Some banks already offer parts of the service by giving their customers access to cheaper or free copies of Quicken to help track their spending. Still, the financial feedback loop needs to be much tighter than Quicken’s control (and maybe needs to be a little more severe in its ramifications as well).
Is This Really Needed for Chronic Over Spenders?
Is this kind of interventionist methodology needed? My opinion is, in some instances, yes because there is a shocking lack of financial training for consumers. Money and manipulating it is one of the top skills any adult needs to survive in this world, yet the amount of training given to teenagers and young adults is negligible.
Maybe Mint or Quicken will offer something like this? It already does but without the notifications. It sounds like something Apple Pay could implement quickly.
Your fifth bullet (the wrestler enforcement method) has been done for smokers:
http://www.metacafe.com/watch/2738528/stop_smoking_with_nicotrel/
This video is a little over the top, I’d like the punishment to be a little more subtle.