What's so bad about that? If you can recognize that your money management skills are such that this $150/year can result in a net improvement to your money management, it seems like a solid product.
I think it's a buying fish versus learning-to-fish thing. There's nothing "wrong" with paying $150 a year for someone else to manage your money, but it would be better to invest in getting better at doing it yourself.
Well, it's $150 a year, whereas improving personal finance skills is a lifetime investment. But most of the investment (or all, if you check out a book from the library) is in time, which, as another commenter pointed out, the target market for this may not have, and habit-forming, which is hard to do. So I'll definitely allow this is a "better" solution, in the sense that it may be more likely to succeed for for more people, but I still believe that for individuals who can, building the capability to do it without for-pay external support would be better.
Yes. You're right about the fish analogy, but wrong about learning to manage one's own finances. I recognize that I shot myself in the foot by using such an imperfect analogy :)
Specialization is just one tool in the modern toolbox. It's a good one, but not a silver bullet. Whether it makes more sense to defer to a specialist or invest in bringing a skill "in-house" is a function of how expensive the specialist is, how much investment it takes to gain the skill, and the duration and frequency of that skill's usefulness. Being able to fish (or farm, etc.) to the degree that you can feed yourself has enormous upfront costs (a boat, farming equipment, education, etc.) relative to the cost of outsourcing it. Managing your personal finances is quite a cheap skill – it requires no specialized equipment, and only up-front self-education and ongoing self-control costs – relative to the cost of paying someone else to do it for you.
I'm speaking in absolutes, but of course it varies person to person, and I don't mean to suggest that I think there's no place for this sort of service, only that I think it seems expensive relative to the effort required to gain what is an extremely valuable skill. I think we can agree to disagree!
Payday loans might be used for leveling variable pay, but the impression I've always gotten is that they are used more for addressing inconvenient expense timing for people that have neither reserves nor more conventional credit available; Even doesn't really help with that.
> 70% of payday loans are used for predictable, recurring expenses.
Even if that unsourced figure is correct, it doesn't really address the issue: if they aren't used to deal with "I was short because my pay was lower than normal this week", Even wouldn't help. That's its a predictable, recurring expense doesn't mean that its not a recurring pattern of timeshifting a mismatch between income and expense, rather than dealing with irregular income patterns.
Even (at best) deals with irregular income patterns, but nothing else.
