Simple Bank Features

I’m sure you have heard that Simple Bank is being closed due to a merger here in the US. There are over 100,000 Simple Bank users that are searching for a new alternative that has the budgeting features. There is an active subreddit and word is getting out that no-one does what simple did.

The biggest things that Simple had that made their clients (like me) financially literate/stable and now even debt free with a sizable emergency savings were the following.

Their Goals, Expenses, and Safe-to-spend were the key to our success. You could auto fund your goals and expenses based on your paycheck dates and then you would have your safe to spend as your leftovers to use as “fun money” until your next paycheck. Everything was set aside so even though let’s say you get a $3,000 paycheck, when it hit your account - you’re safe to spend would show something like lets say $700 dollars. Because in reality you don’t have $3000 dollars. Most of that is earmarked for essentials that you decide. And then before you get your next check, let’s say you have $200 still left in your safe-to-spend, you could then transfer that to any of your goals that you want to achieve faster or even just throw it into “protected accounts” like savings or emergency funds etc.

I see so many “budgeting” features from bank to bank and third parties and none of them do what simple did which is a shame because what’s described above is exactly what people need and it was (I hate to say it) but simple. I see you guys have “pots” and it seems like you are onto the idea of Simple was doing.

Anyway, there are tons of people out there looking for an alternative to Simple and are eagerly ready to try something new but they want the budgeting feature sets that Simple had. They were extremely powerful at making financially responsible customers. Not one overdraft since I started banking with simple. Never even got close. Paid off all my debt and for the first time in my life, had actual savings. The absolute key to the sucess and the success of Simple bankers was the safe to spend and funding expenses automatically when paychecks come in. Oh and lastly, from expenses, you auto fund it with your paychecks and then it auto debits from the “envelope” when the charge actually processes. Also - if the bill fluctuates slightly from month to month - if it’s over what is set aside in the “envelope” it would just auto take from safe-to-spend what was needed to cover the charge. It would never decline because all of those expense and goal envelopes are all in reality just one checking account and their user interface/software is what would divvy up the money so you wound’t see a giant balance.

Anyway - just some thoughts from a devastated longtime Simple user.

–Adam

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I think that can all be achieved, albeit with different names for things.

Set up pots as your goals, the things you want to save for. You can even hide them for even more “out of sight out of mind”.

When you get paid tap the transaction and use salary sorter to send the money where you want, or if you get paid a fairly regular amount set up scheduled pot deposits to save the hastle and have the money put aside before you wake up.

Whenever you first pay a bill tap it’s transaction and tell the system that it’s a recurring balance. Setup your budgeting cycle to start when you get paid. You’ll now have a “left to spend” number at the top which will take these recurring payments, your non-pot balance and when you’ll next be paid into account.

Not sure how common direct debits are on your side of the pond but these can he set to he paid from a pot making budgeting tgat bit easier.

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Unfortunately, these workarounds don’t even come close to the power of Simple’s set and forget AI magic with their budgeting tools.

Monzo’s tools require a lot more input and friction from the user and are not nearly as feature rich. There are some key differences that will likely be a minor annoyance for Simple users if expectations aren’t tempered.

  1. Safe-to-spend is budget agnostic. It’s constantly looking thirty days into the future. It deducts all upcoming bills for those thirty days automatically from your balance to provide an accurate account balance of how much you can actually spend.
    Monzo require you to have a rigid budget, and have a left to spend figure which is not nearly as accurate as Simple’s solution and requires much more input and management from the user. For users whose spending patterns and income variation fit the mould of Monzo’s summary, it can work to a degree. But for the users who don’t, they’re not going to have a very good time with this feature, and it’s no replacement for safe-to-spend.

  2. Goals and expenses work intuitively with safe-to-spend. Because it’s always looking 30 days ahead and isn’t blind to the day after fixed budget periods, it auto deducts money from your balance to assign them to your goals and expenses to factor into your safe-to-spend balance. The money only appears segregated to the user, but it actually isn’t.
    With Monzo, your only option here is pots. So you lose the ability to have recurring card payments set as expenses. You’d have to manually transfer in and out as necessary of pots, or manually budget to work out automations, which isn’t ideal if they’re flexible.

The key differences between the approach Simple take and the way Monzo do it is friction and rigidity. Monzo is rigid and full of friction. Simple is highly flexible and done transparently with much less input or hands on budgeting from the user. It also doesn’t blind itself to the future by demanding a budget period, which is what makes their stuff work the way it does. It doesn’t care when you’re paid to tell you how much of your money is safe to spend, and the value is used much more predominantly.

Pots aren’t a good solution for those who love goals and expenses too. Summary and the ability to assign transactions as committed spend is the only thing that comes close. But again, it’s rigid compared to Simple, and doesn’t go far enough.

Out of all the banks, Monzo do come closest though. And my hope now, with Simple gone, is it will push them in the direction of improving their summary feature to work more similar to the way Simples budgeting tools do. For those who summary already works, they won’t care. But for those like me who don’t fit Monzo’s mould, it would be game changing, and become a viable alternative to Simple’s safe-to-spend, goals, and expenses.

I think we need to ditch the erroneous notion that powerful budgeting tools should educate and force the user to take a hands on approach, because from my anecdotal experience (my friends and family), they just don’t use Summary at all. And my guess is with the Monzo redesign, relegating it to a small icon at the top of the screen, and an option in labs to hide left to spend completely, Monzo’s user research echos that people aren’t using it, and the left to spend figure must be annoying them as a result.

I think Simple’s approach of making the process simple and transparent to the user, by removing as much of the rigidity and friction as possible, and making it a core part of the banking experience is a much superior and more inclusive approach that will help more people save more, and be financially better off than they were.

And pots need to become a more coherent utility that works in harmony with summary, rather than against it too. When done right, I reckon it could far surpass how deep of utility Simple’s goals are.

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I’ve just googled the bank which is acquiring BBVA (and therefore causing Simple’s shutdown).

https://www.pnc.com/en/personal-banking.html

Oh. My. God.

Is there a more legacy bank in existence? Every cliche going. Generic pictures of people looking at laptops, and ooh you can download an “app” and do your banking “on the go”!

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Hadn’t realised it was so hands off. Looks like a good example of pick the tool for the job - automating MY decisions is definitely my sweet spot, can definitely understand that it’s not for everyone.
Suppose I’m lucky in my outgoings being predictable (even if my income isn’t) so I can just whack 1/26 of my yearly bils into a pot each time I get paid, whack some stuff into savings and hobby expenditure pots and know that’s what’s left in the main balance is what I have to spend.
Can see the value of constantly looking some period of time ahead though, what’s good about the different approaches is it allows for picking what’s right for you - horses for courses as they say.

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That’s right.

Personally, if things were happening automatically in the style of Simple, I would want to turn that off as I wouldn’t feel in control of what was going on. Especially because I don’t spend on debit cards so the algorithm’s idea of what was “safe to spend” when it doesn’t know how big my credit card bill is going to be might be completely wrong.

I wouldn’t object to Monzo developing more sophisticated and automated tools, as I’m sure many would love using that as a feature, but I wouldn’t want to use them myself as I like manually managing things and would not want the bank system to “get in the way” of that approach.

I could see Monzo potentially allowing for Salary Sorter to be automatic as a first step, and improvement of Safe to Spend to better relate to pay periods. Beyond that, I suspect changes will take longer.

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In Simple, with something like this, you would earmark it as an expense when you get your bill.

For example, you get a bill for £870 on January 23rd to be payed by February 19, you tell Simple how much your bill is, when it’s being paid, and to which merchant.

Details here:
https://www.simple.com/help/articles/expenses/expenses

There are users who love the hands on approach with Monzo, and users who want their money to work better for them but don’t want that level of engagement to get, and that seems to be the approach Simple took.

In a way it sort of reminds me how iPhones have split into regular lineups and pro ones, depending on how much control you want out of that camera. Photographers will go with pro, I see the approach Monzo take as the pro variant to what Simple do, except just not quite as intelligent, and more rigid. A bit like how AirPods Pro are custom fit, but AirPods are universal. If those analogies make sense.

If there’s one area of a banking experience that I think should be heavily customisable, it’s the budgeting tools. There’s no one size fits all here. Start with something simple that’s a dominant core part of the experience, like how Simple do it, and for those who want something more hands on and mouldable, give them those options.

My suggestion to Simple users would be to sign up, engage and provide feedback, and hopefully Monzo will listen. With Simple gone, there’s a gap now for the approach they took (at least in the US), and one that’s been missing in the U.K. and Europe for a decade. I hope Monzo capitalise on that.

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OK - I get that but having to do that after every statement comes in, is actually more work than manually dealing with it as I do now.

The predictive usefulness is limited too, as the amount often varies significantly.

I do agree with everything else in your post, though, so I think you are right that the end-goal should be varying levels of granularity in order to suit how individual users want to manage their finances. Monzo can provide the tools and leave it up to users how they want to use them.

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It’s done that way, so it’s not actually predicting anything. Credit cards are a bit of an outlier, as there’s no really accurate way of predicting variable payments unless you could plug into open banking and do it that way?

I think bill pots actually work better for credit cards, and I’ve sort of replicated the way Simple do it. I have a pot for my Barclaycard, I have a standing order set for a few days before the due dates, and I manually amend the amount of the standing order when I get my bill. That’s basically how Simple’s expenses work.

Out of interest, how do you deal with inconsistent credit card payments? because I can’t think of an easier way to do it.

It’s worth noting though, that one of the founding principles from Simple is credit cards are evil, so the product was designed to simply allow people to live without needing one. So their expenses utility not being as optimised for credit card spending makes sense, as they anticipate their customers not having one.

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I don’t really have a proper way of doing it.

I use Open Banking apps like Emma and Yolt to keep track of the balance across all my credit cards which gives me an accurate figure for amount owing, I then manually track my overall expenses (money in accounts vs money owing) via Excel, with the figures basically taken from the apps and adjusted for unsupported accounts, etc.

I also just exercise old-fashioned discipline in spending on my card!

I don’t agree that credit cards are evil at all, in fact I regard them as essential in certain situations. Hiring a car or checking in to a hotel, where a hold is placed on the card, is no problem with a credit card but deprives me of my money if I use a debit card - as just one example.

Paying my card is done by Direct Debit, just because I can then pay on the last possible day and maximise interest on the money I’ve “already spent” (if you see what I mean).

I didn’t quite grasp initially that the Simple approach was entirely manual for credit cards (sorry, I thought it tried to predict next month’s bill from the last one) so ignore that. I agree though that Open Banking is probably the way forward here and some expansion of Monzo Plus functionality would potentially help in that regard.

I also do agree with you that budgeting can be a “killer feature” of a bank account. It won’t get people to switch necessarily if they do their budgeting manually, but it will help a considerable number who struggle with it. It will also help Monzo drive their existing customers towards using them as a main account instead of a spending card (so it fits with their overall strategy and would be a worthwhile investment for them in terms of feature development resouces).

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I just pay the bill by debit card as soon as I get it. Then don’t need to worry about accounting for some future standing order or direct debit in left to spend.

Since Monzo pay no interest on current account balance and only minimal interest on savings account I see no significant value in waiting until due date.

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Makes sense - but my whole strategy is never to leave any significant sums in non-interest-earning accounts. To that end, I never leave large sums in Monzo anyway.

It’s easy to transfer in and out from a Savings account at the relevant time - just before a payment is due, for example.

I know that some would regard that as too much intervention for their linking, though.

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As @AdamHeskin described and @N26throwaway backed up, the way Simple automagically budgeted for me was a game changer. I’ve been using Simple for years. I tell Simple I have a monthly expense for a certain amount and that I get paid every other Friday and it handles budgeting the money evenly between paychecks so that the expense is ready to pay come time for it. Then when the bill comes out of Simple it automatically pulls it from that expense.

I can also set a goal (a one-time expense) of saying I want a certain amount (vacation for example) by a certain date (say in a year for example) and it automatically withdraws an even amount from my pay to fund that as well.

I even set up a larger lump for my credit cards. Admittedly the amount is never correct, sometimes I have to pay more sometimes it’s less, but at least there’s a large amount set aside already.

Yeah, I understand the need some folks have to manually control their money, I get that. However, I’m a huge fan of the set and forget method.

The Monzo “Pots” way of doing things is a start, but it’s not quite where I want it. First, don’t make the Pots a separate thing from my spendable. It’s good to keep those linked so that if I need to use my card and there’s not enough in my safe to spend it will spend it anyway and I will have to manually withdraw money from the different Pots to fill that and Monzo could just cover that balance on the next pay day. Second, make it automatic saving. I get paid every other Friday, which means that there are sometimes 3 paychecks in a month. Me setting the amount myself wouldn’t be able to account for that automatically and I’d end up with extra in all of the expenses.

Pots are a great start, and I really hope they keep developing on them to make them more like Simple. I’m spoiled, what can I say. I’m going to ride the Simple train as long as possible, who knows, maybe BBVA will adopt all of that functionality into their system, then PNC will also… I can dream! That is unless Monzo can, at the very least, do the automatic fund dispersing bit.

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I’d really just like to see an expansion of Pots and their uses. Simple had Goals and Expenses. Goals were more long term savings or larger savings where as Expenses were built for recurring savings. The thing I loved most about Simple was the fact that while it was automated, I had control of how it would automate. I think Pots would be a good solution for both. Being able to have more flexibility around the amount, the date, funding and ability to assign categories to auto pull would be nice. Like a long term Pot and a recurring Pot. Let me choose which one it would be and adjust accordingly. Maybe look at grouping the recurring Pots with the Summary/Budget section and keeping the long term Pots where they’re at. If the product team would like more elaboration on this I don’t mind coming up with some basic wires on how this might work.

What’s interesting to me is that they mention taking money from the Main account if the Pot doesnt have enough money in this article:
#3

https://monzo.com/blog/2019/09/26/introducing-salary-sorter-and-bills-pots#article:~:text=Right%20now%20you%20have%20to%20manually,the%20difference%20from%20your%20main%20account.

But elsewhere I see people say if there isnt enough money it will get declined. Need some clarity there.

This is in relation to paying bills from pots. I’m not sure if that feature is available to you in the US, but here, a small number of bills that we pay via direct debit can be assigned to a pot.

Essentially, because of the way direct debits work here in the U.K., Monzo can see exactly how much and when the amount will be taken quite a while beforehand. This allows them to essentially automate a transfer from the pot to your main account that occurs a few moments before the payment is taken.

The money still gets taken from your main account, they just pre-emptively transfer your pot balance before hand to cover it. Which is why if there isn’t enough in your pot, it’ll dip into your main account too.

It’s sort of the reverse of the approach simple take. So when people say if you don’t have enough, your transaction will decline, what they mean is if you don’t have enough in your main account, and the transaction isn’t one that’s assigned to a bill pot, then rather than dipping into your pots, they will decline it. Whereas if the transaction is assigned to be taken from a pot, because all the feature really does is move money to your main balance, if there isn’t enough in the pot, it’ll still go through.

In simpler terms, with Monzo, your expenses can borrow from your safe to spend, but your spending can’t borrow from the money set aside for your expenses.

Hopefully that clears it up a bit for you.

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That does clear things up. Thank you so much. I do wonder if that’s available here in the US. I was reading a little about how in the UK all banks must have an API so I’m assuming that’s how Monzo knows what will get debited.

Here in the US the only thing I can think of that works that way is when paying for gas for my car. It only charges a dollar at first, then later it will charge the real amount.

Sidenote: It really is crazy how simple, Simple was. I don’t remember having to do much research before or figuring out what happens when transactions went through. It just sort of made sense as the transactions happened.

thanks again.

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The APIs with U.K. banks is to do with our open banking system. This is to let other apps and banks plug into your financial accounts elsewhere and segregate them. It enables features like this, which is pretty cool:

The reason Monzo knows how much and when your bills get debited is due to the way direct debits work. The merchant tells Monzo they’re going to take some Money from your account a few days prior to when it will actually be taken. So Monzo know well in advance exactly how much is going to be taken and when.

This works well for things like utility bills and rent, but not for recurring card subscriptions like Netflix. Hopefully that’s something they can support in the future though.

That must be why I don’t see Schedule Bills in my app. Since I’m in the USA.

Here in the States we do have something like this, although like many things in the US, it’s enabled by private third parties and it’s not quite as powerful. Plaid (which was supposed to be acquired by Visa until regulatory concerns were raised) was the main enabling entity; banks that can plug into each other with Plaid can, to some extent, share with each other so, for example, I can link, then see balances and some transactions from other Plaid-enabled bank accounts and credit cards in my SoFi app. I still have to go into those banks’ apps to do anything more complex, like make payments.

Which means we probably won’t see this come to the US in that form. The ACH system used here for most electronic transfers doesn’t provide any advance notice of debits due to come out of your account as far as I know, only credits (thus making early salary access possible) so it’d only realistically be possible the way Simple does it.

EDIT to clarify the above: It’s not entirely true that no advance notice is provided, but if there is, it’s not much. For example, say that I go to the Barclaycard website to pay my credit card balance from my bank account. If I set my US Bank account as the “pay from” account, then the debit will show up as pending the day after, and post on the day after that. If I set it up to come out of my Discover account, it will just post on the 3rd day, no “pending” status. One day’s notice isn’t much and it doesn’t seem to be consistent, but it’s there.

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