I’m a chronic early adopter. I sign up for betas without really understanding why I’m signing up. I throw myself at new software like a zealot, prostrate before the gods of technology.
So when I heard about an online-only bank that promised to put user experience (UX) at the center of their business model, I couldn’t resist. I signed up to be one of Simple’s earliest customers back in May of 2011. I finally got my invite in August of 2012. I’ve been a Simple customer ever since.
What follows is my experience using Simple as my primary bank over the past year. It’s critical and honest, and I hope it’ll be useful if you’re thinking of making the leap.
Simple is not budget software or a financial service. Simple is a bank. Their hope is that Simple replaces your current bank completely.
After you sign up, you get a debit card with all the normal protections of consumer debit cards. You do not, however, get a credit card, nor will they pester you to get one. Simple embraces the radical idea that you should only spend what you have. Many of their features are aimed at this goal.
Another defining feature of Simple: You don’t have a checking account and a savings account. You have one account. That’s it.
Getting Money Into Simple
There are three ways I get money into Simple:
- Direct deposit from my employer
- Depositing checks through the Simple app
- Transferring money from an external account
For some people, this is where things get real. No, you cannot make a deposit at an ATM or hand a teller a stack of Benjamins.
It’s all online. If that bothers you, stop right here. Simple is not for you.
The Online Experience
Let’s be clear: Simple’s online banking — both via a desktop browser or via the native app — is hands down the best I’ve ever seen. Over the last 20 years, I’ve banked heavily with six different institutions, and all of their online banking experiences look ridiculous compared to Simple’s.
- Transactions are clearly presented.
- Everything is automatically categorized.
- You can “tag” transactions to come up with your own clever system.
- You can also map transactions to see where you physically spend your money. This isn’t particularly useful, but it’s very cool.
One of Simple’s strongest features is the ability to create Goals.
When you create a Goal, you choose:
- an amount to save
- a deadline
- a starting amount
From that moment on, Simple automatically puts some of your money toward that goal every day.
Goals are a powerful thing. By silently apportioning your money, Simple makes it easy and painless to save up for just about anything, from rent to a down payment for a house.
Safe to Spend
Goals only make sense if you understand another core feature of Simple: Safe to Spend.
Safe to Spend is not your current balance. It’s your current balance minus money put aside for goals and other pending transactions. It’s supposed to represent what you can safely spend at any given moment.
Not So Safe?
At first Safe to Spend seemed downright revolutionary. So obvious. So… well, simple.
But over time, it’s usefulness has become complicated. Here’s why.
For simplicity’s sake (sorry), let’s assume you have $2,000 in your Simple account. And then let’s say you’re trying to save $1,000 over 10 days.
Every day, Simple will automatically take $100 from your Safe to Spend bucket and put it toward your goal.
That makes sense. But there’s a catch.
It’s day one of your savings plan. You have $2,000 in your account, but Simple says your Safe to Spend is $1,900. That’s to be expected. Simple has deducted $100 from your Safe to Spend account to help you reach your goal in time.
Cool, so you’re “safe to spend” $1,900. Right?
But if you spend all $1,900, there’s no way you’ll ever reach your goal. You won’t have any money left.
In other words, your Safe to Spend is not really that safe to spend. It’s a guide, an indication based on that day, that moment.
Lost you? Don’t worry. It takes some modest mental rewiring to make sense of it all.
If you have a lot of Goals set up (and Simple encourages this) and each of them is taking different chunks of your Safe to Spend money to hit different deadlines, it can be quite difficult knowing just how much to trust Safe to Spend.
Not so simple.
Budgeting with Simple
My wife and I recently decided to get serious about our financials. Initially, I created a budget in Simple by creating a Goal for every budget item: groceries, electricity, dining out, etc.
Here’s the basic process:
- Grabbed lunch at Chipotle? Deduct it from your Eating Out goal.
- Had a drink with some friends after work? Pull that from your Going Out goal.
- Sent a rent check to your landlord through Simple? That’s your Rent goal.
The funny thing about this process is that you’re essentially ignoring Safe to Spend and instead employing the virtual equivalent of Dave Ramsey’s envelope system. Everything comes from a pre-designated bucket. Safe to Spend will almost always be zero.
A splitting headache
I hit a pretty serious snag with this budgeting system. I get paid twice a month. I can’t actually fund all my goals at the beginning of each month, because I don’t have enough money to cover everything. That would take both paychecks.
Between paychecks, I’m caught straddling the the shifting sands of my Goals and Safe to Spend. Is there some way out of this quagmire? Probably, but it involves more brainpower than I have.
For Richer or for Poorer
I’ve saved what I consider to be the Achilles Heel of Simple for last. If you’re not interested in sharing your Simple account with a significant other, then this point doesn’t apply to you.
Put bluntly: Simple doesn’t support joint accounts. Put another way, I can’t get a second debit card with my wife’s name on it. That seemingly tiny wrinkle makes managing a budget together very difficult.
Just to be clear: My wife has a Simple account of her own. But until very recently, it was not possible to instantly transfer funds between our accounts.
While it’s clearly good news that Simple has instituted this long-promised feature, I’m not sure it completely solves our dilemma. It means maintaining two buckets of money, two sets of goals and two Safe to Spend amounts. Mind-boggling.
Maybe we’ll figure something out. Ultimately, that’s what Simple has been about for me: rethinking everything about the way I bank.
While this sounds revolutionary, it’s good to remember that revolutions are not panaceas. They often introduce new problems — but hopefully ones that are less troublesome than the previous regime’s.