

Ready for Zero (YC S10) wants to help Americans get out of debt. - ithayer
http://techcrunch.com/2010/09/01/readyforzero-wants-to-help-you-get-control-of-credit-card-debt/

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jacquesm
The site is still invitation only.

Here's a little plan I came up with for someone, not quite 100% applicable but
it worked pretty good:

(1) cut up your cards

Tough ? Yes, absolutely, very tough. But step one of getting out of a hole is
to stop digging, so stop spending money that you don't have.

(2) cancel: cable, newspapers, any and all subscriptions, internet and cell
phone included if you don't need them for your job. If you do need internet
see if you can make a deal with a neighbour, especially easy if you have a
laptop with wifi.

These are _not_ essentials in your life, you can do without them until you can
afford them.

(3) stop smoking, stop drinking

Besides making you unhealthy this stuff is habit forming and costs you a
bundle, even if you don't really notice because it's only a few bucks at the
time.

(4) if you've bought stuff that you don't actually need, sell it. Liquidate
it, set a price on what you realistically think it is worth and try to raise
that money by selling it for cash.

(5) stop eating and drinking outdoors. Restaurants and coffee shops make a
profit, that means that you can cook for yourself and make your own beverages
cheaper. Sure, it may not be that luxury latte that you've come to depend on
but it adds up.

(6) pursue ways in which you can earn more than you do today (this can be
hard, it did not work out for my friend, maybe you have more luck)

(7) list each and every expense you make, look at the list at the end of the
week and be critical, could you have saved on any of them? If you could do not
repeat that spending in the next week!

All these steps together should give you a bit of money on a repetitive basis
that should go towards paying off your debt.

That's cumulative, any money that you spend over and beyond the required
interest payments will come back the next month as a further reduction in
interest to be paid. So next month you can pay back more on the principal and
so on.

Do not fall back in to old habits, be strong and look at your debt decreasing
as a motivator.

\--

I'm really happy that the 'readyforzero' people built this. That's one of the
nicest start-ups ever to come out of YC, in terms of the 'change the world'
attitude.

~~~
innovate
we're actually letting people through to register as well but have throttled
initial registrations so many will get an invite page. thanks for the support
and feedback.

~~~
Lewisham
How long are invites going to take? I'd love to take a look at this; my recent
wedding has simply wiped me out. I'm not sure what to do, and having a better
idea or what needs to be done would be a real boon.

~~~
jacquesm
Why would you go in to debt in order to marry? I know it's done and that is
not going to undo the damage, but if you knew this was going to be the result
would you do it like that again?

~~~
joshu
Is that really helpful?

~~~
jacquesm
No, and I understand it isn't, I'm just trying to figure out how that could
happen.

I see lots of people spend _way_ too much money on their marriage (1 day...)
only to be in trouble for a year or more afterwards, which, surprise, puts a
huge stress on their marriage.

There is some kind of peer-pressure going on there that makes people spend way
more than is smart and I'd like to understand better how that happens.

~~~
Lewisham
It's not thousands and thousands of dollars, it's just a bit too much to make
it easy to undo on a graduate student salary.

It's small things that rack up. It's small things that don't get easily
factored into budgets: flowers for the groomsmen, that case of soda you
forgot, lighting for the venue.

All of the predictable stuff like catering, venue hire etc. was absorbed by
our (wonderful) parents. Day to day stuff was me. Now I need to figure out
what to do.

It's easy to talk about not going into debt when you have a decent job. I
never had a problem when I was working. Now I'm a student on what amounts to
subsistence wages in CA. That's when it gets tricky.

~~~
jacquesm
If you have wealthy enough parents you might suggest that you consolidate your
debt with them, that at least gets you off the hook for the interest. That's
the killer longer term anyway. I think that's not an unreasonable request
between family members. I've done it for my mom at times and she has done it
for me as well before then. Looking out for each other is better than to have
everybody save and borrow from the bank, and a lot cheaper too. Assuming
everybody is honorable and you keep a paper record of what gets borrowed and
what's been returned to avoid confusion.

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city41
I'm all for any ideas that can help America get out of debt. It's also great
to see someone step in and fill in the hole that MS Money left (it had a
fantastic debt wizard/planner, I was sad when MS announced they are killing
it, despite how buggy the app always was).

I do wonder if this site can really reach the market it's after. In my
anecdotal experience, the people that are in massive debt don't really have
the discipline or organization to get out of it, even with a great tool to
help them. If they did, they probably wouldn't be in as much debt to begin
with.

~~~
jsankey
_I do wonder if this site can really reach the market it's after._

I think this is the big question. I really love this idea, because too many
people are struggling unnecessarily because they don't realise the true impact
of credit card debt. Having something that clearly shows them this impact is a
great idea. But I find it hard to believe they will seek something like this
out, so it's going to be tricky to reach them.

I was thinking about the very problem yesterday, and wondered if it would be
worthwhile requiring information like this to appear on all credit card
statements. Instead of just highlighting a minimum payment, what if the
statements also had to outline the impact of higher payments somehow? It could
be the only reliable way to get the information to the people that could
benefit most.

~~~
martin
Something like this is required as part of the recently enacted CARD act (in
the US):

"Credit card issuers must disclose to cardholders the consequences of making
only minimum payments each month, namely how long it would take to pay off the
entire balance if users only made the minimum monthly payment. Issuers must
also provide information on how much users must pay each month if they want to
pay off their balances in 36 months, including the amount of interest."
([http://www.creditcards.com/credit-card-news/help/what-the-
ne...](http://www.creditcards.com/credit-card-news/help/what-the-new-credit-
card-rules-mean-6000.php))

------
jeromec
I'm really glad to see this. I'd say it could count as a public service as
well. What I hope the site will also offer is counseling on developing better
spending habits in addition to the tracking/organizing of repayments. The
crowd that visits HN is probably already pretty wary of the credit card
game/trap, but too many Americans get pulled underneath unmanageable debt
burdens before they really know what's happening.

I had a neighbor who had simple, yet fantastic advice: if you can't afford to
pay for it cash, don't buy it. This guy was your average American, with a
middle class job, but during his retirement years I noticed he bought a new
porsche and humongous RV. I have to wonder if he bought those cash too, but I
wouldn't be surprised. He had rental property, all his debts paid off I'm
pretty sure, and all because of simple yet powerful financial common sense.

It actually angers me to see some of the interest rate schemes and fees banks
deliberately put in place to take advantage of unsuspecting debtors. A site
like ReadyForZero is timely in the midst of the worst economic crisis since
the Great Depression. If 70% of our economy is based on consumer spending, it
make sense to strive to keep Americans in a position to spend comfortably.

~~~
jacquesm
Debt is a huge trap. And consumer debt is being rammed down peoples throat in
a way that should be illegal.

~~~
mrkurt
This is one of the areas where education in the US is really horrible. This
stuff isn't rocket science, but people really have no clue what it means to
get a car loan or carry a balance on a credit card, or even understand
mortgages. It's depressing.

~~~
jeromec
My oldest brother said one of the best classes he ever took was a high school
course called Home Economics, or something like that. It taught students how
to write and balance a check book, and prepare their tax forms among other
things (he used to make side money doing taxes for people). By the time I got
there the course was gone, but I think such courses should not only be
commonplace, but be required, and certainly include debt and interest
education.

~~~
bmm6o
My home ec class was worthless. We cooked and sewed, which I think is much
more traditional course material for home ec. It sounds like your brother's
teacher looked at the title and made up the syllabus - I've never heard of
anything remotely economics-related ending up in a home economics class.

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keyle
That's really good! I'd like an app that will help repay my mortgage quicker,
coming with plans etc.

Also I can't help but notice that techcrunch is basically an advertising
platform for pretty much anything YC funded.

It's like if you get funded, you get something that floats, boom, you're on
techcrunch.

I'd even say that a feature article on TC would help more than the original
funding...

~~~
jackowayed
You might be able to argue that it's worth more than the ~$17k, but there's no
way it's worth more than the advice, the ridiculous productivity because you
have to tell everyone what you've gotten done every Tuesday, the intros to
investors, etc.

~~~
keyle
yeah from outside, I have no idea about all these things. I'm sure you can't
put a price on experience. I'd love to be a part of it but I guess it's not in
my path :)

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nopassrecover
How are they dealing with the "we're not financial planners so this isn't
financial advice" thing? (or is that not an issue in the US?)

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kirpekar
Dave Ramsey would like something like this.

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ergo98
Sorry, but this one is going to fail miserably.

~~~
sorbus
Why do you think so?

~~~
ergo98
There is almost nothing there, in an industry absolutely _saturated_ with
loads of people with a lot of something. The business plan right now appears
to be "a simple Google Spreadsheet with a lot of annoying maintenance and
superficial value-add surrounding it".

The pie-in-the-sky fantasy land of future low interest credit card leads
[which is the exact _opposite_ of the sort of offers such a site would get.
The best would be predatory, secured credit-card type offers] and
automatic...something...it just has the aroma of failure. It could as easily
be a "lose weight today" website where you enter your desired weight and it
tells you to eat less daily. Which...if such a site existed...I think we would
all laugh at.

~~~
jacquesm
For someone with a hole in their hand getting a handle on their expenses can
be a first step towards actually doing something about it. I would not rule
this out as a failure quite so easily.

They'll have to make it _super_ easy to use though.

~~~
hugh3
Another issue: the target customers don't have any money.

~~~
brianlash
Kinda true but credit card debt =/ 0 buying power. A lot of these folks are
carrying non-zero balances but using the cards anyway. The trouble is credibly
collecting payments which will almost certainly come from users' credit.

As an aside, while this demographic has less total buying power than that of
responsible consumers, it's also a hell of a lot more likely to buy stuff.
Possible net positive?

