I have a real treat today. Seth Risenmay, the founder of MoneyDesktop.com, answered some questions from me and also graciously offered a promo code for a free 3 month trial of his product.

About MoneyDesktop

For anyone unfamiliar with MoneyDesktop, it’s an online tool to track your finances, plan for the future, and most importantly get out of debt. What’s unique about MoneyDesktop in a world of sites like Mint.com of PocketSmith.com is that the software auto-generates a plan using a variety of methods to help you get out of debt the most efficient way.

So for example, the ever-popular debt snowball is built in. Also, the less well known mortgage checking account method is also available. You the user are able to select the method that you are comfortable with, tie it into your overall budgeting and finances, and get out of debt faster.

Essentially, it’s a one stop financial wizard.

The Interview

RabbitFunds: Why did you decide to start MoneyDesktop?

Seth Risenmay: I started MD because I wanted to get America out of debt. We look at debt as THE greatest threat to the future of our country. When you think about it, our country has been able to defeat Nazism, Communism etc… and the one enemy that actually has a shot at bringing down our country is debt.

RF: Where did you come up with the idea for the feature set included in MoneyDesktop?

Seth: We had a database of 39,000 customers that gave us feedback on our product. We asked all of them this question; “What does this product need to be to give you the best chance of success?” From this market research we learned that America needed a product that did not then exist and so we set out to build it. It took 4 years and about $5 million to build but we feel confident that MD is the greatest debt and personal financial management tool in existence.

RF: What is different about MoneyDesktop as compared to Mint or PocketSmith?

Seth: The greatest difference between MoneyDesktop and any of our competitors is that it is first and foremost a debt tool. Other PFM’s are typically tools that help you track where your money went, but if that is all you do that would be like driving your car down the road backwards, you’ve only seen where you’ve been, not where you’re going. Some products and companies help you project the future and your debt payoff but since they don’t track where your money is going the projections are inaccurate. MoneyDesktop is the only company that looks to the past by tracking your spending, to help you project an accurate future for debt elimination, with real time in the present instructions in the form of text messages and emails. We also have systems to help people make decisions with financial intelligence, which no one else has. We also help people increase their discretionary income to help them get out of debt even faster. We do this by actually increasing their cash flow while lowering their bills and payments. All of this is unheard of to most PFM’s. I would say that we are one of, if not the only DPFM (debt and personal financial management).

RF: Are there any plans to make the service free like Mint?

Seth: We have thought a lot about offering our services for free like Mint. The problem is that we have found that if a person is not paying for a service they do not value it enough to actually implement it into their life and become successful. We wanted people to actually commit to their financial wellness. However, we also understand that there are a lot of people who desperately need MoneyDesktop who may need our services for free. Because of this, we have created a promotion called 3 for Free. If a user of MoneyDesktop is willing to help us in our mission to get America out of debt then we feel they have shown the commitment necessary to succeed and deserve to receive our services for free. If they refer 3 other people to MoneyDesktop our system will automatically track that and when 3 others have signed up the referrer will receive MoneyDesktop free for life!

As mentioned above, Seth was kind enough to offer a free 3 month trial to any RabbitFunds readers with a special reduced price of $14.95 afterwards. Just use the promo code “Rabbit” when you sign-up.

RF: What do you hope that users will achieve by using your site?

Seth: Total financial wellness. We want our users to become debt free, achieve financial freedom, gain financial intelligence, and become wise stewards of their money and wealth. And hopefully by using the 3 for Free feature they can help start a community of people committed to getting out of debt which will help strengthen our country and in a lot of preserve what we know as America for generations to come.

RF: How has using the software helped your own family?

Seth: I know where every penny goes, I know when every debt will be eliminated and I have piece of mind knowing that I am being a wise steward of the things I’ve been blessed with. It has helped me eliminate all of my debt with a little left on my home still to go.

RF: What upgrades or changes can users expect to see in the coming 6-12 months?

Seth: With tax season upon us we are adding features that will allow a person to easily organize their finances for tax season with their CPA. We are also adding added benefits of ID protection and Credit Monitoring. Other companies like LifeLock will charge you upwards of $10 per month for each of those services, we are close to having those services provided to our subscribers at no additional fee as an added benefit of using MoneyDesktop. We are also redoing the set up wizard for a more simple and effective setup to get people using it more efficiently.

For More Info

Thank you Seth for your time. If you have any questions or would like to see more then visit MoneyDesktop.com or follow them on Twitter at @MoneyDesktop.

I need therapy. Unfortunately, it’s not in my budget. So instead of sitting comfortably in a recliner pouring out my heart to a straight faced psychiatrist, I’m sitting on an exercise ball in an unfinished basement vigorously typing out my thoughts to you, the reader. Please be nice.

Reason #1 that I’m pathetic: My car

My wife and I are looking to sell my baby (Hyundai Santa Fe) and purchase a car outright with cash so that we remove all debt except for our mortgage (Dave Ramsey would be so proud of me). Though last week, I realized just how much my car affects my self esteem. I pulled into a parking stall at our local grocery store and noticed the older, worn car parked next to my white beauty. Suddenly, thoughts of driving an older mini-van with more miles, fewer features, and some strange color flashed before my horror filled eyes. Making those monthly payments no longer seemed so bad.

Reason #2 that I’m pathetic: My ties

I was once told by a psychic that I had been a female in a prior life (which is a whole other story for another day). Apparently the desire for nice clothing carried over into this life. I have a large collection of ties of various colors and styles. However, I have very strict guidelines for my ties:

1. I do not wear prints or solid colors (Regis Philbin).
2. I only wear 100% silk.
3. I don’t like anything wider than 3.75 inches.
4. I only shop for ties at certain stores. And I won’t buy a style that is common.
5. Last, I know how to tie my tie using about five different knots, though I use a slight variation of the Prince Albert knot because I want my ties to appear different from other ties.

Reason #3 that I’m pathetic: My bookshelves

My wife and I decided some time ago that books and music would replace television in our home. We purchased a nice set of bookshelves from IKEA and put them in our living room which is adjacent to the foyer. We have filled the shelves with books, framed pictures, and a nice clock we received at our wedding. Occasionally when people visit, I honestly hope that they notice the absence of a TV and our bookshelves filled with classics as well as the artwork on the walls.

Why am I telling you all of this?

It’s all about Opportunity Cost or the cost of the next best thing for which you could have used your money.

With each material object above, I have two options: (1) purchase and satiate an emotional need or (2) not purchase and place the money in savings or pay off debt. If you choose Option #1, then you give up all of the future returns from investments or the interest saved by paying down debt. If you choose Option #2, then you receive an emotional spike but fore-go any future emotional satisfaction from investment returns.

The truth is that I find my self-esteem, satisfaction, or whatever you want to call it in part supported by both a solid investment strategy and certain material things. Though, I believe that through self-discipline we can reach a happy medium.

For example, my wife and I almost purchased a sewing machine on Black Friday. But we decided that we would postpone the purchase until we have no debt but our mortgage, which should only be a few months away. This way, we pay off debt (yeah!) and can still make the purchase we desire (double yeah!).

The key is to understand the opportunity cost of your decision and then make a plan that allows you to both accomplish your financial goals and live the life that you desire.

So I just listed my car on Craigslist. This ends my confession.

My wife and I recently made some changes to our budget and how we handle cash versus credit. The result is a stricter, more disciplined cash management system. As a result, we are having to rethink how we approach certain budgeted areas such as groceries.

As is probably the case with many of you, groceries are one of the largest bills we have. It’s amazing how many resources are consumed in sustaining the life of very tiny people.

I think we’ve all read articles talking about how we should make a shopping list before going to the store. That way, you avoid impulse purchasing or making several trips during the week. We almost always make a list. And yet, we still have what I’m going to call “unintentional food storage.” You know what I’m talking about. There is that can of tuna or box of pasta in your pantry that has been in there for ages. We never consume the food since it usually requires more ingredients which we don’t have on hand to make a meal.

Let me give you an example using that can of tuna. The reason my family usually doesn’t eat the tuna is because we often don’t have bread. My wife doesn’t like me eating a lot of breads (something about a low carb diet that I’m supposed to be on). But we have the tuna, some mix-ins like celery, nuts, and apples for flavor, and Vegenaise (I don’t like Mayo and don’t get me started on Miracle Whip). So all we need is bread and we’d have a sandwich. But go figure, we bought roast beef, provolone, and bread tonight so that we can make sandwiches. Now granted, I prefer roast beef over tuna. But, we could have saved money, or at least postponed the purchase until the next paycheck, had we just bought bread.

The point that I’m trying to make is that when planning a trip to the grocery store, dive into your unintentional food storage and see what you can use. One thing that you might try is eating through your freezer or pantry before making any large trips to the store. Make a list of only ingredients that are needed to finish off the half-meals already in your pantry. We recently tried this tip and found that we were able to spend much less money while we paid off some bills.

If you are trying to lead a frugal life, then you probably cut coupons. I know that my wife and I are always on the lookout for good coupons ourselves. In fact, each year we are mailed a calendar that has coupons bordering each calendar month. The coupons are for places like Nicolitalia (our favorite pizza place), Sensuous Sandwiches (our favorite sub place), Coldstone Creamery, massage parlors, etc. We look forward to it arriving each Fall.

There is a problem though with coupons that easily leads to spending more money – coupons are a marketing tool or sales gimmick! Meaning, stores don’t send out coupons because they love us. They send coupons because they know that we are more likely to spend money. For example, I love Kohl’s. We receive a 20% off coupon about once a month. As soon as it arrives, I start thinking, “Oh, we could go buy some new towels for the kitchen. Or I want some new socks or let’s just browse and see what we come across.” That response is exactly what the marketing department at Kohl’s wants. I know people in Kohl’s marketing department and I really like them. But don’t be fooled – they want your money.

Marketers not only are aware of this phenomenon but spend time researching how coupons affect your buying habits and then share that information with each other. Don’t believe me? Here’s a research report just published on MediaPost, which is a news portal for marketing and media professionals.

Receiving a discount is NOT saving money. You save money by putting money in the bank. However, corporations have spent millions and millions of dollars over decades teaching us that buying something on sale is the same thing as “saving money.” Spent money is never money saved. So let’s be clear that coupons help you spend less but don’t cause you to save money. Each time that my grandmother told my grandfather that she had just saved him “tons of money” by purchasing $100s in clothes on sale, he always responded, “I’d like to see that savings account one day.”

Now, you might completely disagree with me right now. But here’s the point that I’m driving at – coupons are great when you intend to make the purchase anyways. If you cut and collect coupons to use on purchases that you would not have otherwise made, then the marketing departments have won and you have spent money, not saved money.

Let me give you an example. Within 48 hours of receiving our coupon calendar, we decided to use a coupon for a 12″ one topping pizza at Nicolitalia for only $3.99. My wife grabbed a table while I ordered. I know how much she loves the cookies ‘n cream cannolis. So I of course ordered two. The total came to about $10. Now $10 isn’t exactly breaking the bank, but we are on a budget and we had food at home that would have cost less. Had we not received that coupon in the mail, then we wouldn’t have made the purchase.

All I’m saying is, beware when cutting coupons. Don’t forget that the reason you received it in the mail or your inbox is because some marketer knows that you now feel enticed to spend money in order to “save money.” So don’t stop collecting coupons, just judiciously cut the ones for your regularly scheduled purchases that you were going to make anyways.

Do you agree/disagree? Let me know in the comments.

Although many of the principles that I practice and preach are founded in religion, my goal with this blog is not to preach my religion. However, I am a Christian and believe that we will answer one day for how we handle the resources given to us in this life (which includes money). In this post, I want to briefly touch on one particular verse in the Old Testament that holds my fascination.

“Now therefore thus saith the Lord of hosts; Consider your ways. Ye have sown much, and bring in little; ye eat, but ye have not enough; ye drink, but ye are not filled with drink; ye clothe you, but there is none warm; and he that earneth wages earneth wages to put it into a bag with holes. Thus saith the Lord of hosts; Consider your ways.” – Haggai 1:5-7

Little did you know

But God is actually a financial planner. In fact, He was the first to give that age old advice, “S-A-V-E!” What I love in particular about this passage is the phrase, “Consider your ways.” He is inviting us to take a moment to reflect on our financial habits. What that suggests to me is making and keeping a budget! Without a budget, how can I account for my expenditures and find the areas that cause me to, “bring in little.”

It seems to be a commandment to me

I feel safe arguing that not only are we being invited to “consider our ways” but that we are being commanded to. Knowing man’s propensity to self-indulge and the need to save for a rainy day, the Lord has helped us out by giving us this straightforward commandment, which is for our ultimate good.

G.O.K. Fund

If any of you are fans of Dave Ramsey, then you are probably aware of what he calls the G.O.K. Fund – God only knows fund. You can count on unexpected events to occur in life. Not only is the Lord aware of these unexpected events (car breaks, basement floods, broken arm), but He has given us a way out. And that way out is preparing and having an emergency fund. The Lord isn’t interested in seeing us fail even when He allows unexpected things to happen. So let us follow His counsel and be prepared.

Whether you are Christian or not

Take some time today to reflect on your current habits. Have you “sown much, and bring in little” Have you to “eat, but ye have not enough”? Have you to “drink, but ye are not filled with drink”? Do you “clothe you, but there is none warm?” And most importantly, do you “earneth wages to put it into a bag with holes.”

Don’t be the debt ridden person that puts his hard earned money in a bag with holes. Please, consider your ways!

(This article was featured in the 84th edition of Money Hacks Carnival)

Nash from Nil2Million.com was gracious enough to invite me to be a guest blogger this week. My post, titled Budgeting For Your Financial Goal: That Illusive “Other” Category, is currently up and running. The post is based on an experience that I had last week with my wife that helped me realize the need to better plan for infrequent purchases that aren’t emergencies. Meaning, purchases I don’t want to use savings for but don’t happen on a monthly basis.

Please check it out and poke around Nil2Million while you’re at it. Thanks!

For my day job, I work at an aerospace firm. In order to receive all of my vacation time, I am required by my employer to continue educating myself through books, classes, seminars, training, etc. As a book lover, I generally fulfill this requirement through reading. Currently, I’m reading “All Marketers are Liars” by Seth Godin.

One of the main themes of the book is – you’re a liar. Don’t worry though, so am I. In fact, most people are liars. Satisfying some psychological need, we tell ourselves “stories” or lies about why a certain product or service will fulfill some deep rooted need. Unfortunately, we are generally meeting just a deep rooted want. For example, here’s a few excerpts from the book.

“Does it really matter that the $80,000 Porsche Cayenne and the $36,000 VW Touareg are virtually the same vehicle, made in the same factory? Or that your new laptop is not measurably faster in actual use than the one it replaced…Marketers profit because consumers buy what they want, not what they need. Needs are practical and objective, wants are irrational and subjective…

“Marketers aren’t liars. They are just storytellers. It’s the consumers who are liars. As consumers, we lie to ourselves every day. We lie to ourselves about what we wear, where we live, how we vote and what we do at work…This is a book about the psychology of satisfaction. I believe that people tell themselves stories and then work hard to make them true. I call a story that a consumer believes a lie.”

This habit of lying to ourselves threatens are financial stability. Instead of spending $5, we spend $20. Instead of recognizing that we want that new shirt, car, or fine dinner at a restaurant, we lie to ourselves until we are convinced that, for one reason or another, we need that new shirt, car, or fine dinner. The current credit crunch can partly be blamed on a nation full of liars who convinced themselves that a $500,000 home was necessary even though a $250,000 home was sufficient. We must learn to live within our income and that means, we must stop lying!

I’ve compiled a short list of ideas on how to stop lying to ourselves and face the truth when making purchase decisions.

1. Have and stick to a budget. Is this purchase in my budget? For example, my wife and I budget a certain amount each month to spend on clothing. We’ve both agreed that this amount is sufficient to meet our needs. We have set this amount before facing a purchase decision. If during the month we want to exceed the budget because Kohl’s is having a fantastic sale, then we are now lying to ourselves. We aren’t saving money by exceeding our budget during a sale. In fact, now I have to dip into savings to pay for my overspending.
2. Set a per purchase spending limit. A wise man said, “The four most caring words for those we love are ‘We can’t afford it.’” Take some time with your spouse to set what I call “What I can spend without having to ask my wife if it’s ok” spending limit. My wife and I have decided that neither one of us is allowed to spend more than $50 at any given time without calling and asking the other one if it’s okay (this does not apply to groceries). Let me tell you right now, my wife has stopped me from making a lot of unnecessary purchases by telling me, “We can’t afford it.” Even though we had a budget for the purchase, we still didn’t need it.
3. Replace bad habits with enjoyable, inexpensive activities. Shopping or overspending is a habit that we have likely formed over years. Since our brains are programmed to react in a certain way in specific situations, any change is met by resistance. The existing habit is simply more comfortable and natural. To help change your behavior, replace the bad habit with another activity. For example, instead of going to the mall to pass time, go to a local park with a soccer ball and spend some time with family or friends. Start or re-start a hobby. Your new hobby might even be a low cost home business where you make money! (For more ideas of this nature, visit The Digerati Life)
4. Make sure that the reason you tell yourself you are making the purchase and the reason you are making the purchase are the same. Ask yourself, “Why am I really making this purchase?” Am I buying this dress for my wife because I love her and want to show my appreciation, or am I trying to prove to her and the world that I am a good provider? We lie to ourselves to cover our true motives. If the real reason you are making a purchase isn’t in-line with your principles and budget, then don’t buy it.
5. Take stock of and enjoy everything that you already have. Develop gratitude for what you already have in your life. Purchasing new things is often a sign of ingratitude for what life has already afforded us or a sign that we feel deficient in some area.

Overcoming bad habits and addictions is a process that requires concerted effort. Face each day one at a time and stop lying to yourself! Don’t believe the story you’ve created in your mind that justifies unnecessary and financially harmful purchases.

(Also, I wrote a little while ago about two other principles that help put money into the right perspective)

This post was featured in the Carnival of Personal Finance #217 hosted by Almost Frugal.