Editor’s note: As Simple’s resident personal finance blogger, Sarah Eadie is passionate about Simple’s mission to show the human stories behind money. She spends a lot of time talking to Simple customers: hearing their stories, and learning about the fascinating people who use Simple every day.
For this post, we wanted to take you behind the Simple blog—and officially introduce you to Sarah—by sharing a story of her own. We hope you enjoy her work as much as we do! You can share your story with Sarah by Tweeting her @eadiest.
(Of course, avoid sharing any personal information through social media. And if you have an account-specific question/comment, shoot CR a message. They’re the most qualified folks to handle those.)
When I started with Simple, I didn’t use Goals.
I knew they were one of the biggest benefits of banking with Simple, but Goals intimidated me. Opening my account and seeing a low Safe-To-Spend® was initially uncomfortable. Like most people, I was used to a low balance meaning that I had messed up. But once I understood the power of Goals, I realized using them allowed me to most effectively manage my money with Simple.
Why more money made me more anxious.
My resistance to seeing a low balance in my account stemmed from my days as a broke college student. Back then I’d go weeks without checking my balance because I was afraid of what I’d see.
After I graduated, I was able to increase my income. I’m healthy, and I don’t have a car, children, or mortgage payments. I was banking 100% of the difference between my old, meager paycheck, and my new, heftier one.
It was thrilling! I took a screenshot the first time my bank account had a comma in it. Seeing that number represented more than just money in the bank. It was personal growth.
As I continued on my upward trajectory, I’d fritter away my paycheck each month without thinking too much about it. Eventually my lack of a budget caught up with me.
Then I signed in to my Simple account on a Monday morning after a particularly expensive weekend. When I read my balance, my gut started somersaulting. It was a full week from pay day and I had $50 to my name. Despite making more money than ever before, I was treading water.
I was back to feeling the way I’d wanted to avoid: helpless, panicked, broke.
But I had a personal finance a-ha moment that changed the way I used my account. I remembered a budgeting secret I’d learned from my mother a long time ago.
Envelope budgeting: bringing it back.
Growing up poor in inner-city Philadelphia, my mom learned how to be independent, frugal, and responsible–qualities she passed along to her children.
She taught me how to envelope budget in elementary school. When I started receiving an allowance, she gave me three labeled envelopes:
- One for long-term savings
- One for short-term savings
- One for fun money
Whenever I wanted access to that money, I removed it from the envelope and spent it. With every dollar tucked into a labeled envelope, I never had loose bills burning a hole in my pocket.
When the cash was gone from an envelope, that was it. No more spending from that category. I remember picking up my ‘fun money’ envelope, hoping there was a dollar or two left, only to find it empty.
In those moments, my bulging long-term savings envelope would tempt me. Sometimes I’d slip a couple of extra dollars from one envelope to another, but I usually tried not to move the money around much.
The system helped me think about my money in chunks assigned to specific categories. Even though I knew all the money in those envelopes belonged to me, breaking it up into smaller sums helped me tangibly understand where I wanted my money to go.
Even as a tiny child, envelope budgeting helped me weigh my future desires against my present spending impulses. I could easily gauge whether buying the latest Sonic and Knuckles comic was worth more to me than having that 50 cents saved toward a future bike.
Goals are digital envelopes.
When my mom taught me how to envelope budget, she shaped how I used Goals today. Budgeting and saving all in one place makes all the difference.
In a recent conversation, Simple customer John B talked about why Goals worked for him when the budgeting app/bank account combo hadn’t:
“[Budgeting apps] are cool, but it was easy to get away from the budgets I set because I wasn’t actually moving money.
I wanted something that let me actively manage my money. Taking the money and transferring it like, ‘This is my bank. This is my money’ makes a little more sense than using [budgeting apps].”
As he (and I) discovered, Simple offers the best of both worlds.
Now, when I get paid, Goals enables me to quickly and easily earmark money for expenses I know I’m going to have, like rent and loan payments. I don’t think of myself as having a pool of $1,000 to spend on whatever. Instead of giving me a false sense of abundance, I can map out my monthly spending–from necessities to cool things I love.
I start with a couple basic Goals. Click any of them below to add them to your account:
And then I branched out to more, uh, exciting ones…
(You know they’re gonna tour this year!)
When you start thinking of Goals as digital envelopes rather than the change jar you’d use to collect abandoned nickels and dimes, magic happens. You start saving proactively and spending strategically.
If you’re wondering, ‘what even is a budget? and how do I make one?’ I offer this recommended reading: