A lot of weird things have come out of this pandemic, but I never would have predicted that a coin shortage would be one of them. And yet, here we are.

Circulation of change has slowed to a trickle with so many people staying home to keep themselves safe. Banks, stores, restaurants, and the like are unable to keep as many coins on hand as before. And so everywhere you go, you see signs that say, “Please use exact change,” or promotions that offer freebies to customers who cash in the change they’ve been collecting at home.

As with everything these days, this problem comes with its fair share of conspiracy theories. And while I can assure you the government is not stockpiling quarters so that they can track your spending, I can understand why these times might cause you concern.

Scott Galloway, NYU professor of marketing and one of my favorite podcasters, claims that the pandemic is taking trends that were already on their way and accelerating them significantly. Movie premieres are increasingly happening at home rather than in theaters. Online shopping is overtaking in-person shopping more quickly than ever. More and more students are opting for virtual learning over in-person schooling, and that’s happening at all ages.

Perhaps one of those accelerated trends will be the move from physical, cash payments to electronic payments through debit cards, credit cards, and mobile payment systems. I’m just speculating; I don’t have any numbers to back this up. But this time is forcing people to be more considerate about how they pay for the things they buy. Just maybe, this could be the push the public needs to finally embrace the digital age of spending.

Personally, I never use cash. My wallet only has space to hold a couple of bills at once, and I can’t stand even that. Anytime I touch change, I think about how many different people have handled it over time, and I immediately feel the need to shower. Yuck.

Physical money has never worked for me.

I started making money just as going cashless became a viable option for people. Most places accept cards now—even vending machines! Direct deposit allows employers to bypass paper and put paychecks right into employees’ bank accounts. And if I need to give a friend money for dinner or gas, there are a dozen different apps that allow me to do so free of charge.

Nearly every aspect of my financial life—budgeting, getting paid, buying groceries, paying bills, sending money to friends and family, and more—is digital. I do it all without swapping paper or coins with anybody.

That has some real benefits in times like these, when every physical interaction with another person puts you at serious risk. But I think it’s also just the best way of handling money in the 21st century.

With everyone reconsidering their financial approach in light of our new circumstances, I thought that now might be a good time to share my financial approach and why it works so well for me. Whether you’re a diehard cash user or more digitally-inclined like I am, I hope you find this little overview helpful—or at the very least, interesting.

My Approach

My financial life is centered around my online banking solution: Simple. The bank doesn’t have any branches or physical locations, just an app that you download and use to manage everything. It’s elegant, it’s easy to use, and it saves the company a ton of money in overhead, which they pass on to customers by eliminating all fees.

I use the Simple app to take care of all my banking needs. I can see a list of my transactions going back years, deposit a check with my phone’s camera, look up account details, transfer money in and out of my account, freeze my card and order a new one if it’s been lost, and even contact a bank employee for help if something’s gone wrong. The app essentially is my bank, and it’s a great one.

Simple was the first online-only bank in the United States. (In Europe, financial innovation has been much quicker and more widespread.) But even small, traditional banks are starting to get onboard with a lot of these online features. They save the company (and thus the customers) money, and they make life so much easier for everyone involved. Online banking really is the best, and I imagine whatever bank you use is offering a lot of these features already. If not, you should definitely request them.

My favorite thing about Simple, though, is that it isn’t just a banking app. It’s also a powerful and innovative budgeting tool. Instead of keeping track of your banking in one place and your budgeting in another, the app includes both, which makes things really easy. Everything about the way Simple works is meant to help me manage my money well.

We’ll start from a bird’s-eye view. Katherine and I have a joint account setup with Simple, which is actually made up of four different bank accounts:

our shared checking account,
a personal checking account for me,
a personal checking account for her, and
a shared savings account.

With this setup, budgeting is a breeze. In our shared checking account, we have a list of expenses. These include our bills and the money we want to put away for savings each paycheck. Each expense has an amount, a due date, and a funding schedule (indicating whether the expense comes out of my monthly paycheck or Katherine’s, which is weekly). Whenever one of us gets paid, the app automatically moves the right amount of into these expenses so that the funds are ready on each expense’s due date. Then, when a bill comes due, the money’s already set aside for it. Booya!

We mostly use my paycheck for regular monthly expense like the mortgage, car payment, retirement, and savings. Katherine’s paycheck is used for expenses that are more frequent and variable, like gas, groceries, and spending. Whenever we sit down to eat, I tell her, “Thanks for buying dinner.”

Expenses are handy for budgeting everything from monthly bills like Netflix and electricity to annual costs like property taxes and domain names. They’re flexible and easy to set up to fit any payment schedule you might have. This system of expenses is our way of making sure we’re putting aside the money we’ll need down the line so we don’t get blindsided later on.

Expenses are actually a lot like the concept of envelopes in traditional budgeting strategies. Instead of taking cash and physically putting it away for a specified bill, we digitally “separate” money from the rest of our account so that it’s there when we need it. But with expenses, you can make as many as you like and keep them filled automatically, like magic!

Goals are like miniature savings accounts.

Aside from expenses, we also have goals. Goals are like mini-savings accounts within our shared checking account that we use to set aside funds for house projects, travel, unexpected health expenses, and other future things. They aren’t long-term savings funds; those go into the savings account or our retirement fund, which is through Social Finance. Goals are a good place, though, to store money that you don’t need on a certain date but you do plan on spending eventually.

Any money that isn’t designated to an expense or a goal goes into what Simple calls Safe to Spend. If expenses are like envelops and goals are like small, short-term savings accounts, Safe to Spend is like a traditional checking account. This is the money we can actually spend. As long as we keep it at or above zero, we aren’t at risk of messing up our budget.

Believe it or not, we don’t keep a lot of money in Safe to Spend. None of my paycheck goes there; I don’t even see it in the account before it gets dispersed to our various expenses. We leave a portion of Katherine’s paycheck in Safe to Spend each week so we have some money for food and fun, but the majority of what comes in never touches Safe to Spend. When we wake up on payday, the money has already been direct deposited and budgeted without us doing a thing. It’s amazing!

This setup is very freeing. We never have to wonder if we’re sticking to our budget because the bank account keeps us on budget automatically. We always know exactly how much we have to spend because there’s literally a number in our banking app called Safe to Spend. Everything else is taken care of because we set it up beforehand.

That’s all in the shared checking account, which is the one we use for almost everything. We also each have our own personal checking account. Every week, we budget a little bit from Katherine’s paycheck to transfer into each account so that we have money for things like hobbies, clothes, and gifts for each other. (I use mine to protect my wife from my ongoing Dunkin’ addiction.) Inside our personal accounts, we can each set up our own expenses and goals if we like.

And then there’s the savings account, which Simple calls a Protected Goal. We can transfer money in and out of it from our checking account, but there’s no way to actually spend money from it. Even if our checking account were to ever overdraft, our savings would be secure. This is where we keep our emergency fund, which we put in place before we got married and have fortunately not had to use yet.

That’s our basic banking setup. I carry two Simple cards: a blue one for our shared account and a white for my personal account. Katherine does the same, except her white card goes to her personal account. For 99% of purchases, we swipe our blue cards or use contactless payment on our phones. Because Simple supports Apple Pay, we’re able to store both cards in our digital wallets.

We do have two credit cards (an Apple Card and a student Discover card I got years ago) that we use to pay some recurring bills, but we pay them off constantly. Every transaction gets paid independently so that it can be pulled from the proper expense, and we never carry a balance for more than a couple of days. The credit cards are really just there to build our credit histories and earn rewards on bigger purchases. They also add a layer of security when we travel so that we don’t have to worry about potentially compromising our actual bank account if someone were to steal our card information.

And there you have it: That’s how my wife and I mange our finances digitally. We don’t use cash, we don’t keep receipts or a ledger book, and we rarely write or deposit a paper check. And it works for us incredibly well.

Why I Love It

In case you can’t tell from the way I gushed above, I’m in love with this setup. I’ve been building and tweaking it for years, and I’m so happy with the way it’s turned out to work for us. I believe this is the best solution out there, and I’m confident that it’s robust and flexible enough to adapt with us as our family changes over time.

The main thing I love about it is how automatic everything is. Budgeting is something I take very seriously, and I used to spend hours every month keeping things straight. Now, I don’t have to think about it most of the time, and if I do have to make a change, it only takes a few taps.

You can’t get that kind of automation with cash. Really, my solution is just applying the traditional envelope-style approach to a digital system, but making it digital changes everything. Budgeting is so much more powerful and easy when you can set it and forget it. It’s not a struggle anymore.

I also love the simplicity of it all. Simple is literally the name of the app, and they deliver on their promise. Everything comes in and out from one main place. I never have to worry about carrying the right card or going by the ATM or making sure I have my checkbook. As long as I have my phone, I’m good most places. And if I absolutely have to, I can use my blue Simple card.

Do I need to keep a ledger book to ensure I don’t overdraft? Nope. My transaction list and Safe to Spend instantly update. Receipts? Forget about ‘em. I can even get a notification on my watch every time my card is swiped, so if something funny is going on, I’ll know it immediately. It’s just so easy.

Most of all, I love the peace of mind this approach gives me. I’ve always been very money-conscious, and before Katherine and I got married, I worried a lot about providing for my family and making sure we got by. Once we sat down together, worked out a budget, and started automatically setting money aside, I knew I didn’t have to worry anymore. It was all taken care of.

The part of my brain that used to be preoccupied with worrying about budgets and bills is now free. I have peace because I know it’s all taken care of. And that kind of calm is worth more than any amount of cash.

Tradeoffs

That’s not to say this approach is absolutely, objectively perfect. The truth is that any financial system is going to come with drawbacks. You just have to find the one with the tradeoffs you can stand. None of these are dealbreakers for me, but it’s good to be aware of them.

First of all, Simple and cash do not work well together. If someone gives me cash or I need to give someone else cash, I’m in for some pain. Because there aren’t any branches where I can make deposits, the only way I’ve found to get cash into my account is to buy a money order and deposit it like a check I’ve written to myself. The fee to buy a money order is less than a dollar, but going to Moneygram gets old after a while.

When someone gives me cash, I usually do something a little more creative: I buy a Walmart gas card with it. Then I go into my Simple app and transfer that amount of money from my Gas goal to wherever I wanted that cash to go. That way, I don’t have to deal with cash, I can use the gas card the next time I fill up, and all of my money is where I want it to be. It’s a little roundabout, but it works.

As far as giving cash to others, I try to avoid it at all costs. Most people have the Cash app, Venmo, or Apple Pay at this point. But on those rare occasions I do need to give money to someone who only deals in cash, I have to go to an ATM. Simple has a network of ATMs around the country, and several of them are close to where I live and work. But going out of my way to get cash just isn’t something I like to do.

Using checks can be similarly frustrating. For a long time, Simple didn’t offer checkbooks to customers. Instead, you had to use the app to ask the bank to mail a check to someone on your behalf, and they’d do it within a week or so. Now, I can order a checkbook for either my shared or personal checking account for a small fee.

I don’t carry a checkbook, but I do keep checks around for the rare occasion when I do need one. It usually happens when I hire someone to do work on my house. I want to pay in something more official than cash, but they don’t accept cards, so I have to write a check. It’s not my favorite thing to do, but it works.

I hope that over time, cash and checks will go away. As more people move to handling their money digitally, they’ll be more willing to accept forms of payment like Apple Pay and Venmo. And more businesses are setting up debit card readers like Square every day. I’ll be able to avoid cash and checks completely someday, but until then, my setup isn’t optimized to deal with them.

As with any technology platform, Simple isn’t without its bugs. One of my favorite things about the app that I haven’t mentioned yet is that you can rename all of your purchases in the transactions list. The app still keeps the official, ugly transaction name that appears on your statement in the background, but you can clean up the transaction list to make it more readable for you. You can even assign a spending category for different stores and set them up to automatically pull funds from certain expenses and goals. This is great.

What’s not great is when this renaming and categorizing feature goes berserk. It works great most of the time for most things, but I’ve run into a couple of persistent issues that drive me up the wall. For example, I once renamed a credit card payment “AT&T” since it was going towards my phone bill, and now, every credit card payment shows up as “AT&T.” I’ve tried changing it to “Apple Card” and checking the box to apply that name to future transactions, but it doesn’t work.

So every time I make a credit card payment, I have to change it from “AT&T” to something else. It’s not a huge deal because I rename every credit card payment to be more precise anyway, but it’s still annoying.

What’s worse is when categorization goes wrong. I somehow by mistake once categorized a Hobby Lobby purchase as a water expense, so the next time we went in to buy something, the app tried to pull the funds from my water bill budget. It was a bit of a mess that I had to clean up, but it was just one of those weird issues that can crop up in apps from time to time. These things happen very rarely, and I’ve learned to fix them when they do, but it’s something I have to be prepared for.

Finally, there is the issue of security. While Simple is a great bank with the highest safety standards possible, there’s always the possibility someone can somehow skim your debit card information and fraudulently spend your money. Thankfully, the bank’s support team is quick and helpful, and the one time we had a question about a charge that showed up on Katherine’s account, they were able to get it resolved almost immediately.

Anytime money is involved, some people are going to try to find ways to take advantage. I’d much rather have my debit card information stolen than a wallet full of cash. At least I can dispute the charges on my debit card and get my money back in a timely manner. Yes, digital payments have their own vulnerabilities, but so does every money system. I still think the digital approach is the most secure of all the options available.

Closing Remarks

That’s my digital-first system for handling finances in all its glory. I hope you enjoyed reading all of the details, as well as the advantages and drawbacks I see in my approach. Clearly, I believe this is the best setup available. I know it works remarkably well for me.

Of course, I also recognize that a setup like this does not and cannot work for everyone. A good number of people in my country are still unbanked for a number of reasons, and they have to rely on cash to survive. While digital solutions for these folks are starting to emerge, I understand that my more mainstream take just isn’t an option for some.

And even for those of us who do have bank accounts, all the budgeting advice in the world can’t fix unfair wages and unmanageable living costs. When someone is struggling just to get by, the accompanying stress is more than enough to handle. People who don’t make enough to live don’t need a 3,500-word manifesto from me on the benefits of digital banking. They need to be paid a fair wage.

I hope I haven’t given you the impression throughout this article that I’m some ignorant, privileged fintech bro. I am completely aware of the privilege I have to even be able to discuss these matters in public. I’m extremely blessed that I don’t have to worry about where my next meal is coming from or whether or not I’ll be able to pay my bills next month, and I do not take that lightly. I understand that money is a sensitive subject, especially right now, and I would never want to offend or put off anyone through my discussion of it.

So if you’ve read through this article and think I’m a jerk for talking openly about finances and budgets during such a difficult period for many people, I apologize. I completely understand that this is not a good time for everyone to be focusing on their financial practices.

But for those who are thinking these things through right now and looking for the best solution, I hope that what I’ve shared has been helpful. Maybe the system you end up with doesn’t look exactly like mine, and that’s okay. Everyone’s circumstances are different and require different solutions.

But I believe that many of the principles remain the same. Staying proactive about our finances, planning ahead, and automating as much as possible are practices that I think can benefit us all when thinking through our financial approaches. And I believe these practices are only being enhanced by the digital tools that are available to us today.

Call me a nerd if you like, but I’m optimistic about the future of finance and the digital solutions that will make it possible. Every advancement makes handling our money more convenient than ever. I’m always on the lookout for ways to make my setup even more efficient, and I can’t wait to see what comes next.

But for now, I’m extremely pleased with the system I have in place, and I’m happy I got to share it with you today. Thanks for reading, friends! Hope you have a great week.