A Little Background On Me
You could begin by reading about how I got into debt. Or you could fast-forward to the Spring of 2008. I found Dave Ramsey and his message immediately struck a chord with me. I had heard his name before, seen his book, and had actually seen him live AND had an autographed copy of his book, but had never really paid attention to what he was saying. Meantime I had a self-imposed deadline of getting out of debt by the year I was 40. I turned 40 in December of 2007, and it hadn't happened yet. In the spring of 2008, I rediscovered Dave Ramsey, and began listening to his radio show.
Much has already been written about Ramsey and his methods, and I don't intend to re-write all of it. But I began to see that my former ideas were all wrong, and that it was possible to get out of, and stay out of, debt. I really began to examine everything that my wife and I were doing, and what are goals were for our family.
I don't mind telling you that I became a Ramsey fanatic, hanging on his every word. Everything he was saying was making sense, and I needed a clear direction. I needed motivation, I need inspiration. I began to learn about the proper ways of thinking about and handling money.
I was listening to all three hours of Ramsey's radio show every day. Ramsey single-handedly led me to several financial repairs. Each of them could be an individual blog post.. but for now.
1) We got on a written budget. Outlined by Ramsey
2) We used Churchill Mortgage to refinance our house. Endorsed by Ramsey
3) We used US Legal Forms to establish a will and start an estate plan. Endorsed by Ramsey
4) We used Zander Insurance to shop for term life insurance. Endorsed by Ramsey
5) We created an emergency fund.
6) Most recently, we established an online-only checking account with PerkStreet Financial.
Why an online bank?
I understand that not everyone would be so quick to jump on a bandwagon as whole-heartedly as I seem to have. Admittedly, if Dave Ramsey told me to jump off a bridge I'd have to give it a least a moment of serious consideration before politely refusing- but I don't think I'm in any danger of that happening. The thing is- he hasn't been wrong yet. I have yet to be disappointed by any suggestion he has made, or any service he has steered me to. I fully expected a quality experience from Perkstreet and I wasn't disappointed with them either.
I had already begun the move to online banking- I mean who has time to go to the bank to wait in line anyway? The drive-thru window at lunch? 6 p.m. on Friday evening? I spent most of my adult life in the every-week routine that we call banking. Plus- up until this year it wasn't always enjoyable. The thought of standing in line to deposit a check that i wasn't even going to see- usually being behind in covering bills- seemed akin to waiting at the dentist to have a cavity filled. Online banking was certainly a better way for me to manage time, and keep 24/7 track of our cash flow.
But once I was well in to the budgeting routine, and we had eliminated the last of our (mostly mine) credit card debt, something weird began to happen. I had some money left over. We had an emergency fund. We had some traction, and I finally had money to manage. Now, what to do?
It's perfectly simple. Create a familiar online banking environment without the overheard of a brick and mortar bank, and all of the accompanying staff. Have a beautiful, streamlined web experience. Use social media to connect with your customers. Offer free checking, with no minimum balance. Offer perks, like iTunes credit or Starbucks credit. Offer up to 5% or $600 back annually on balances over $5000.
Incidentally, I don't have $5000 in my Perkstreet account. While the offer of iTunes and Starbucks will have an appeal no matter what your saving or spending level is, to get the highest possible cash back you'll need to keep $5000 in the account. My understanding of it is this is how they can afford to offer no-fee checking and free music. Perkstreet makes it's money investing the capital- but this does not mean that this account is not for the little guy (me).
What's stopping you?
I'm very much of a financial nerd. I like adding money up. I like watching it grow. I like trying to figure out how to make more. I'm not so hot on the spending. On the other hand, I like iTunes. This is how Perkstreet hooked me. I was already banking online with my regular bank of over 25 years. I was no longer going in the brick and mortar locations- except on Saturday mornings to make deposits. I was already seamlessly transferring money between online accounts. I already had experience with PayPal as an online bank vehicle. And I was probably spending $4-5 every week on iTunes. If Perkstreet would offer (at a minimum) one free iTunes song for every $100 that i spent, the question was not "Is this a good deal" but rather, "how can I spend what I normally spend" and be earning all the free songs for just doing what I was already doing?
While you are issued a pin number for ATM's, and a checkbook, it is the "non-pin" purchases that earn the awards. So instead of sliding my regular check card at the Burger King, movie theater, I use the Perkstreet debit card. For regular recurring purchases, such as Netflix, Audible, and my Dave Ramsey subscription, I use the Perkstreet card. This is money I was already spending any way. In addition, there are monthly "Power Perks" at various retail locations on a rotating or special basis.
My wife and I used the Perkstreet account to manage our Christmas budget. We opened the account and put all the money that we were going to spend on Christmas in that account, and earned perks on all of that regular shopping. We have a recurring transfer to that account every week, so that we'll have already saved our Christmas money before we get to Thanksgiving 2011.
These are just a few easy ways to earn free iTunes or Starbucks. But I have found that Perkstreet Financial is different from my traditional bank in another way. They seem to be pretty accessible. I'm a huge Twitter fan and so I quickly followed @perkstreet and discovered that connecting with their customers happens day and night. I don't think this is the sort of thing you could expect from your traditional bank.
All of this is why I'm glad I chose Perkstreet. And I believe that their view of how to handle money, and achieve financial success, lines right up with my own.
I have added the Perkstreet Financial Blog to my daily reading list.