I'd like to add to this. I used simple for a couple years back when it was first released, and it helped immensely in getting out of debt and on the right track. I've since moved on to other banks (at the time there were no joint accounts or savings, and I needed both), but I had friends reach out to me today in a panic because I'd recommend they use it over the years.

It was an excellent tool that absolutely improved my life and the lives of others I know personally.

Well done.

I never used or heard of Simple. What do they do to make people manage their finances wiser?

They had a way to set money aside for goals. The money would be in your account but it would not show up in the available balance. So you could say, I want to buy this expensive thing, put in the amount you want to save towards it per month and the available balance would hide the money for you until you spent it.

That’s f’ing brilliant. Everyone is pretty good at stopping when out of money but if you can see it right there in a savings account the temptation to transfer can be strong.

This. 100%. The best I could do before switching to Simple was putting about half my paycheck in a savings account in another bank that I had no other accounts with and using that to pay my rent and maybe a few other bills. I was still always overdrawing my checking account at my main bank. I would occasionally have to go to the other bank, withdraw cash and drive over to the main bank to deposit it. Luckily, that bank didn't have any branches near where I worked, so I either had to wait 3 days for an online transfer or do my "shame banking" as my SO called it on my work from home day or Saturday morning. Simple's "Safe-to-Spend" is really a game changer for people like me.

It's refreshing to hear someone write well about some technology that has improved their lives. :)

Yeah. It just made me think how nice “software memorial services” could be for people to express gratitude for these endeavors.

I've used Simple since they became available on Android. At the time I had an account with Wells Fargo, but it was just a nightmare. I was working minimum wage, more or less paycheck to paycheck. I had been burned several times by those predatory overdraft fees, and they had started to introduce minimum balance fees.

Switching to Simple was a breath of fresh air. I didn't have to worry about any of those fees anymore. I could look at their tiny list of possible fees and know what to expect rather than having to deal with the nightmare of poor information that I had before. They saved me so much money, and helped me get out of the paycheck-to-paycheck spiral.

Like you the budgeting feature have been incredibly powerful for me too. Being able to hide away money without risking an overdraft or declined payment was a game changer.

Now I find myself in a very unfortunate position where I'm not even in the states so I'm not sure how I'm going to manage a switch to somebody else.

Chiming in as a happy Simple user too. Always thought their customer service was top notch.

Depending on your mortgage interest rate, have you considered continuing the 18 years and investing your extra cash in index funds? Market returns ~10% over 20 years, so if your mortgage is 6% or less it's in your best 'interest' to continue.

Financially this makes sense. But for me, I’m sitting in a house that’s paid off. If I lose my job (or have to quit for medical reasons) and I can’t get a new job, I’ve got shelter. I can live Indefinitely where I am right now just paying utilities and property tax. Granted there is the reality of things just break on houses and require $$$.

Maybe it isn’t the best strategy. But there’s a nice feeling to know that I’ll have my house even if something bad happens.

And by bad I mean less than societal collapse. All bets are off in that situation.

If you have the discipline to pay off a house you can easily create a stock portfolio. The only important advice is to stop staring at the charts for too long. If you are an investor you derive zero value from it. Your decision to sell should not be driven by the market. It should be driven by personal goals.

Totally agree. I was replying more about why I chose to pay off my house vs. sitting in a mortgage for X more years so that I can put more money into the market.

During the time I was paying off my house, I did put money into the market. I just prioritized money going towards the house. Now that the house is paid off, all that prior mortgage payment money is going into the market.

This is good advice. A 30 year mortgage is like 2.8% right now, after taxes maybe 1.8%. The stock market over any 18 year time period (after taxes) will return higher than 1.8%. Adding to that, liquidity - having money in the bank provides flexibility, having equity in the house is nearly inflexible.

It could be because I’m Australian or perhaps I’m just unfamiliar with mortgages - how does tax affect the effective loan rate?

As an Australian that's dealt with the US bank/tax systems:

* Mortgages in the US traditionally are 30 year fixed rate.

* Mortgages are deductible from federal income tax up to a certain value

* People in the US have trouble understanding things that Australians are used to, like: variable rate mortgages, fixed/variable rate mortgages, redraw accounts, lines of credit mortgages, which all Aussie lenders offer.

On the other hand, as an Aussie I was confused by:

* People still writing cheques (checks). Like, really? On paper and stuff? Haven't written a cheque in Australia since 2000 and the only time I see it is the "CHQ" button on an EFTPOS.

* Contactless credit cards are only just a thing and people don't have PINs, they still stick their card in, or swipe (?!?) and sign.

* There's no such thing as EFTPOS which goes direct to your account, there are Visa/MC debit cards that work in the field like credit cards, but you can overdraw and get fees charged.

* Discounts for cash are still a thing because the CC charge isn't available. People get things like cash back on their spend, but then pay more for the card in the first place.

* Everyone worries about their credit score that changes in magical ways depending on different weird spending rules that have incentives for taking on debt but only in certain patterns that they won't tell you.

Mortgage interest on your primary residence is tax deductible.

Assuming you itemize. For married couples, the standard exemption is $24k. Very few people well end up actually needing to itemize to deduct more than the standard exemption.

Market returns are not guaranteed, unlike a fixed mortgage rate.

Sure, but the return on paying off a 3.5% mortgage, after interest tax deduction is maybe 2.5% which adjusted for inflation is ~0 to 0.5%.

You can. Only deduct (married) if you pay more than 10-15k of interest a year? Or am I missing something (itemized deductions is now at 20k limit or so).

Edit: and since you need to pay taxes on dividends in bank accounts, you would need something like 3.5-4% interest to match the gains from prepaying the mortgage at 2.75%?

Interest would never match it.

But ignore the interest deduction. Even if you got a 4% return and paid long term capital gains you’d be ahead.

Inflation affects both in the same way and by the same amount. Ditto taxes, mostly. It's probably best and simplest to compare nominal returns.

Assume an inflation adjusted average return of 3% on your investment and a 20% long-term capital gains you end up with 2.4% return versus 0 to 1% for prepaying a mortgage.

The market does not return 10% of 20 years, you may be referring to some period of U.S. returns, and many experts do not expect it to return so well over the next 20 years.

Yeah, even though that 10% is net tax 8.5% (vs. the full 6%) it seems like one could refinance it down in future. Still, I don't think most payment terms are flexible enough to make them an indefinite loan (go interest-only).

Depending upon their tax situation, the loan rate may be effectively a little lower due to the tax deduction too, though. And, tbh, 6% is a really high mortgage now. Rates below 3% are common.

Yeah, when I last checked for a mortgage (4 mos ago), I was offered 2.8%

You can get 2.5% today with good credit. Rates just dropped again yesterday to a new all time low.

Mind-bending man. At this point, I should just intentionally pay PMI and sock the rest in the stock market.

<3

<3