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January 4, 2012

ReadyForZero Helps You Fight Debt, Using Clever Mind Hacks


ReadyForZero wants to help you get out of debt. And while they’re at it, they want to modernize the credit industry.

It is hard to pay off debt. Our better natures are constantly at war with our impulsive desires. It’s hard to feel in control and it’s all too easy to fall back into the habits that got us into trouble in the first place. Loren Baxter, Director of User Experience at ReadyForZero says that when they spoke to friends facing debt problems, there were three basic strategies in play: 1) Ignoring it (calling this a “strategy” is generous). 2) Making random payments over the minimum. 3) Creating and maintaining a complicated spreadsheet.

“We thought, ‘Why isn’t there a better tool for this?’” says Baxter.

ReadyForZero – Our Story from Rod Ebrahimi on Vimeo.


ReadyForZero is intended to be that tool. It’s a free service that aggregates all your debts in one place, and then gives you a plan for how to pay your way out of them. It’s an automated version of those complicated spreadsheets that some of Baxter’s friends were using.

Sliders show you how your choices affect your debt levels.

When you sign up, you give ReadyForZero access to your accounts, so it can pull your data and monitor your progress in realtime. You then get a page with sliders where you can set how much per month you want to pay or a deadline for when you want to be out of debt. As you drag those sliders around, numbers change automatically, showing you the effects that your choices will have on your debt levels. Based on all that information, ReadyForZero generates a personalized plan (with a payment schedule you can sync to your calendar) designed to get you out of debt as quickly as possible. At any time, you can go back in, change the sliders around or schedule extra payments and see the results of those actions. You can also track your progress.


So far, so good, but these are the basics.

The real challenge, says Baxter, is in changing your financial behavior between visits to the service. “What about when you’re at a cash register, about to make an impulsive purchase on your credit card? How do we help you then?”

ReadyForZero is experimenting with a whole range of different techniques to help their users stay on track. Some of them are simple mind hacks. For instance, they offer free stickers to cover the magnetic strip and the numbers on your cards. That way, you get a reminder about your better intentions. They also offer to send automatic reports to someone you trust, to enable some positive social pressure. And they have piles of checklists.

People like checklists, says Baxter. We’re motivated to fill them out. In a recent update they added progress bars, intentionally modelling them on Zynga’s addictive games (think FarmVille and Mafia Wars). “A key difference here,” says Baxter, “Is that we only want to help encourage people to do things that they already want to do.”

The key to all of this is breaking bad habits by setting psychological traps. Many of these features have been implemented in the last month, so it’s too early to say whether they are working, says Baxter, but this is a big part of how ReadyForZero designs. Their emphasis is on rolling out new features to users as quickly as possible, and then testing the results. “We don’t run big usability studies, we simply put people in front of the product and see what happens.”

The key to breaking bad habits is setting psychological traps.

To this end, they’ve taken the unusual step of keeping customer support in the hands of the CEO, CTO, and Baxter. This approach has significant disadvantages and it’s not clear how it scales (for example, when they launched, they ended up spending five days doing nothing but answering support email) but Baxter says that it’s worth it as a fantastic source of usability testing. “Have you ever emailed a company with feedback, and heard back from the lead designer, ‘That’s a great idea, we’re designing it now. Would you be willing to review the design with us before we build it, to make sure we got it right?’”


Which brings us to the question of business model. How do you run a profitable company by giving away free tools to help people get out of debt?

If you’ve ever been in debt, you’ve probably had a lot of thoughts about your creditors, many of them unprintable. I wonder, did you ever stop to think about the state of their tech? It isn’t pretty, says Baxter. The processes they’re using are from 50 years ago. “I’m talking huge call centers, antiquated proprietary software, data that gets reported once a month.”

In an early blog post, CTO Ignacio Thayer explains, “We believe that the current options are so bad, so predatory, so unaligned with consumer interests, and so inefficient, that there is a valid, honest business in helping people get their balances back to zero.”

The opportunity lies in the gap between what current lenders know and the kind of information that organizations like ReadyForZero can gather about your situation by having realtime access to your accounts and spending. Right now that gap is being filled by predatory debt consolidation services or by hilarious failures of risk assessment. ReadyForZero thinks they can do better. In other words, getting out of debt in a sane and orderly fashion may be worth it, but ReadyForZero isn’t really free. You’re paying with your data.




Freelance writer Tim Maly runs Quiet Babylon, a website about cyborgs & architects. Reposted from

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