Real Life with One: I Learned About Money The Hard (Expensive) Way

We’re sharing unique ways people are using One.


Guest Contributor:
Richard J., One Principal Site Reliability Engineer

Perhaps you can relate to my story about money: I never learned how to manage money while growing up; not in school, nor from my parents; not even in Boy Scouts, where I learned so many valuable skills, did I learn what is perhaps the most essential skill in today’s world! I had to learn money management the hard way—the expensive way—by making mistakes and learning from them; fortunately for me, while I’m young enough to still save for retirement.

 

Trashed Credit to Cash

In my twenties, I trashed my credit by maxing out credit cards and not paying them. I even let a car get repossessed. It took seven years to recover from all that. I went without credit cards and loans for most of that time, forcing me to budget, save, and pay for things with cash. And so, for years, saving and budgeting worked fine, even if it was tedious, but I knew that one day I’d want to buy a house and a nicer vehicle and would need good credit to do that.

Rebuilding my credit required starting over again with cards and loans targeted to borrowers considered high risk. The lower your credit score is, the higher you are seen as a risk to lenders, and thus the higher the interest rate you pay and the lower the credit limits you are granted. In 2006, my credit score was about as bad as you can get! To start rebuilding my credit score, I got a credit card with a very low limit that came with a very high-interest rate. I treated that monthly payment as something sacred and slowly built up a more positive credit history. Eventually, I was able to get another car loan with a co-signer at a whopping 16% APR!

 

Cash to Credit Cards (Again)

As my credit improved and income increased with career growth, I found it easier to obtain more credit at better interest rates. I soon found myself paying for most things with a credit card to get the reward points. Those points were helpful to a degree, but I grew increasingly frustrated with paying off a credit card’s balance only to see the balance back to some ridiculous number a week later! Every month I found myself asking, “how did that happen?! I just paid this off!”

After poring over my monthly statements to better understand my usage and spending habits, I realized I was spending more and saving less than I really wanted. Using credit cards was the real culprit. After all, it is in the card issuer’s best interest to keep a balance every month. The bigger the balance and the longer you hold it, the better! For them! And so, they use several tactics that make your “balance” a bit of a moving target. Tactics like showing your purchases as positive and payments as negative signals our brains to look at the balance as a “positive” number but really, it is debt. 

From a psychological perspective, we humans tend to have an easier time accepting something when we don’t think it’s real. And therein lies the great danger of credit cards: they make it all too easy to spend more than we should, whereas when you have cash, and with every charge you immediately see your pool of money decrease, it becomes much easier to control your spending, and therefore easier to save. I concluded that the points were no longer worth it, and I needed to get back to a cash-based system of managing my money.

 

Credit Cards to Building Savings

The best advice I’ve ever heard about money management is this, “a budget is telling your money where to go, instead of wondering where it went.” To do that, you need to be intentional. It helps to prioritize things like housing, groceries, utilities, etc., and actively set money aside for those things and savings before spending money on novelties or “wants.”

Having tried many different banks over the years, I was never really satisfied with the accounts. I wanted an easy way to manage different pools of money for different purposes. Most traditional banks make this hard to do and require you to open additional accounts that often come with minimum balances and maintenance fees. 

To my pure delight, I found One, but sometimes it feels like One found me. The timing was perfect. One was looking for a software engineer, and I was looking for a product that I could be invested in and actively use. I had a deep personal interest in helping to build something great that positively impacts customers’ lives.

I love the ability to create Pockets and Scheduled Transfers. And perhaps the coolest thing is that each Pocket has unique routing and account numbers, and you can create a virtual card for them. That way, I can have bills on auto-pay pull from specific Pockets. And it gets even cooler! I can quickly assign my physical card to any Pocket at any time in the One app. I can buy groceries from my “Groceries” Pocket then reassign it to pay for a coffee from my Spend Pocket.

I also love that there are no overdraft fees; I have Credit Line, so I know if I happen to spend more than what I have available, I can borrow money to cover me until my next paycheck. It seems crazy that traditional banks can charge up to $35 when you overdraft by a little as $1!

 


My One Budget

My finances essentially break down into these categories.

My Pockets:

  • Automobiles
  • Housing
  • Media
  • Groceries 
  • Camera Gear

Notes:

  • 80% of my paycheck goes to the Spend Pocket.
  • 10% of my paycheck goes to the Auto-Save Pocket.
  • 10% of my paycheck goes to the Save Pocket.

 

Scheduled Transfers

 

Every paycheck…

  • Send [$xxx.xx] from “Spend” to “🚐🚙 Automobiles” 
  • Send [$xxx.xx] from “Spend” to “🏡 Housing” 
  • Send [$xxx.xx] from “Spend” to “📺 Media”
  • Send [$xxx.xx] from “Spend” to “📷 Camera Gear”

 

Every Sunday…

  • Send [$xxx.xx] from “Spend” to “🥕 Groceries”

 


 

I scheduled several transfers, essentially one for each bill. I plan transfers to deposit a few days before the bills are due with the exact amount owed. I have a scheduled transfer to my “Groceries” Pocket every Sunday so that when I go grocery shopping, I don’t overspend one week and end up short the next. My eyes tend to be bigger than my stomach, so they say, and using Pockets and Scheduled Transfers in this way helps limit overspending.

I have my paycheck direct deposit scheduled to transfer different amounts to different Pockets. Every pay period, 10% of my paycheck automatically deposits into my Auto-Save Pocket, earning 3.00% APY.* Another 10% automatically deposits into my Save Pocket, earning 1.00% APY.* So much better than the paltry .01% APY at my previous bank!

After all my Scheduled Transfers have gone through, I have a portion of what’s left transferred from my Spend Pocket into my “Camera Gear” Pocket to save up for a new camera or lens. After that, whatever is left in my Spend Pocket is used to eat out, grab a coffee, take my kids someplace fun, all without the stress because I know what is within my budget.

I’ve learned to love actively managing my money. I love taking charge of my finances, directing my money where to go, and watching my savings grow as a result. And managing money with One makes it so much easier than any other banking service I’ve ever used. I love where I work and working on a product I use every day. I want everyone to enjoy managing their money and saving as much as I do. It’s not just my job; it’s my mission. 

 


 

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