Can A Handbag Save You Money? You Might be Surprised.

Millions of us and, and particularly shopaholics, are constantly buffeted by emotional waves that make it nigh on impossible to surf the urge to splurge. Mix in high-risk times and venues, credit card in hand, and it’s essentially a wipeout. Australian comparison website, has devised a novel, potentially very effective, and time sensitive solution to stabilize us: the iBag.

The iBag was conceived as a response to what Michelle Hutchison, one of the bag’s developers, described
as the “shocking” results of a survey of over 1500 adult Australian credit card holders. Fully one-quarter of Australians don’t pay off their cards in full each month. They’ve amassed $50 billion of credit card debt; more than $34 billion of current debt is interest charges. “Our aim was to develop a possible solution to this problem that would not only help people curb their credit card spending, but also bring attention to the national debt crisis,” Michelle continued.

While the iBag looks like a normal purse, it’s far more than inanimate object. Residing within, a fairy godmother or Knight in shining armor, depending on your rescuer predilection, waits to wrest you from the clutches of your self-defeating impulses. A future product will be tailored to men.

Here’s how it works.

There are three key components inside:

  1. An RFID (radio frequency identification) card, which looks like the kind of swipe card that you might use to enter a building.

The card’s sensor knows when your wallet is inside the bag and when it reaches a certain distance from the bag. It records this information every time you take out your wallet.

  1. A GPS chip that tracks where you use your wallet the most and turns on flashing LED lights within the bag when you’re close to one of your danger zones.

The flashing lights, designed to act as a deterrent to spending, provide visual feedback and one more opportunity to pause before opening your wallet.

  1. A real time clock that programs the bag to lock at your most vulnerable times of day. The developers wanted the iBag to snap shut whenever the user entered a danger­ spending zone, but that posed a safety risk.

Another important benefit of the bag:

When you’re in a shopping danger zone, the iBag sends a SMS to a designated shopping support buddy, friend, family member, sponsor, therapist or anyone else who is willing to serve as your advocate and help you surf your urge to splurge.

Prior to using the bag, you input information from your credit card into proprietary software that ingests the information you’ve fed it about when and where you’ve spent money in the last three months. The software then spits out graphs and heat maps that reveal where and when you’re spending the most.

Data in hand, you pre-program the handbag to lock when you’re most vulnerable. Not only can this help curb spending by prohibiting you from using your card, the data helps you become more conscious by identifying where and when you use your card the most. Armed with this information, your financial fog has no choice but to lift, giving you the clarity to reconsider, making it much more likely you’ll select rather than seize.

According to Hutchinson, “The overwhelming support we had for the iBag showed us that people wanted to improve their finances, but didn’t know where to start.” While the bag can help users develop more financially responsible habits, the developers are aware that it’s just a first step.

The iBag can’t teach people how to budget, what to look for in a home loan, how to negotiate with a lender or the best options for saving money. So the team at designed a 12 Week Financial Fitness Challenge to help people learn the basic fundamentals of money. There are weekly modules, assignments and a Google+ hangout where users can ask a panel of financial experts specific questions. The course can also be used as a ‘step two’ or can be taken while someone is using the iBag.

From news outlets (here’s a link to a article) to fashion bloggers, the iBag has garnered significant global media interest. Requests from hundreds of individuals who want to use it have poured in, and there’s been interest from companies that might want to manufacture it on a large scale. Targeted to anyone who is struggling with credit card debt or who continues to make unplanned purchases with little thought to the financial aftershocks, the iBag is still in the prototype phase but will, hopefully, be available commercially.

Here’s a video of Michelle Hutchinson talking about the iBag , and Jenni Ryall, an Australian journalist, talking about her finances.

Jenni has been shown the how the iBag works, but hasn’t been able to use it because the prototype is still in demo mode. However, she did enter all her transactions into the software, which then produced graphs and heat maps of her spending, all of which she is using as she wends her way through the 12-week Financial Fitness Challenge. Jenni has chronicled her journey each week in a candid, humorous post.

Here’s the link to her blog.

“We developed the iBag as an extreme measure, an immediate short-term solution to help curb Australia’s credit card debt and decrease the amount of what we call yo-yo debting, paying a card off and shortly thereafter incurring debt again,” continued Hutchinson. No small thinker, Michelle would like to see the level of credit card debt decrease, not only in Australia, but around the world.


By Carrie Rattle

Carrie Rattle is a Principal at, a website for women focused on mind and money behaviors. She has worked in the financial services industry for 20+ years and hopes to inspire women to better prepare themselves for financial independence. Read More