Fintech

Tally

Angela Strange Posted June 18, 2019

We take automation for granted in so many areas of our lives. To physically get from point A to point B, for example, very few of us would still trace a route on a map; we use Google Maps to calculate it for us, step by step, including travel time and traffic. But what about for financially getting from point A to point B? For most Americans, finance is still entirely manual. You probably still get half your bills in the mail and then have to manually remember to pay them on time. To say nothing of reaching financial goals you’re striving for—a down payment on a house, college tuition, maybe even just creating a little buffer for yourself. If you’re proactively planning at all, you’re likely diving down a research rabbit hole of financial products on your own, with little to no guidance, and no feedback on if you’re making the optimal choices.

For many Americans, navigating their way out of credit card debt is one of the biggest of these challenges—one that right now requires manually drawing that route, without any map, and absolutely no idea if a traffic jam lies ahead. It is confusing, complicated, and very common: last year, credit card debt in America reached close to $1 trillion; Americans paid $100B (that’s billion!) in late fees and interest. These levels of debt are growing across the board, with the average American household carrying a balance of $15,000.

And as anyone who has ever had credit card debt knows, once you have it, the debt just continues to grow. Let’s say you have that average $15k in debt across 3-4 different cards. You’re in a better financial position than when you first racked up the initial debt; now you have a good job, and on an annual basis your income is greater than your expenses, so you should be able to save a little each month towards paying down this burden. But paying each card very likely means 3-4 different due dates each month. You don’t want to use auto-pay because it’s so easy to get hit with an overdraft fee if you miscalculate the balance in your account (you have to make sure there’s still enough for your rent check!), plus your payday likely doesn’t align with these bill pay dates. Even if you manage to be meticulously organized and to avoid late fees (now $28-38 per miss) with a manual-but-timely payment, how much do you pay, and to which card? Do you pay the minimum balance, for each card, as your statement seems to suggest? Or should you work to pay off one card entirely first? If so, which one? Probably the one with the highest interest rate — but which one was that again? Or would it be better to pay off the one with the smallest balance to at least feel a sense of accomplishment of paying off a card in full?

You can see why a little guidance from a road map would be good here, but those are in short supply. Although there are services that attempt to refinance credit card debt through balance transfers or debt consolidation loans, refinancing is still far too complicated, offers are full of potential scams—and worst of all, as a standalone solution it generally doesn’t work. People who use these services are often worse off a couple years later, in part because these “solutions” do nothing to create awareness nor to change behavior (again, no map). Many of us have to take at a moment to calculate the right percentage tip on a restaurant check; we would need to devote much more time to understand the knowledge required to manually dig out of debt: the intricacies of APR, minimum balances, compound interest.

But stuff like this is easy for software. Technology can take all the roadblocks, obstacles, forks in the road, traffic jams, and confusing turns, and tell you exactly what the fastest, easiest route to get to your destination actually is. This is the platform Tally is building—one that will seamlessly automate your financial life, starting with the largest challenge for many Americans: credit card debt. By simply linking your bank account and your credit cards, you now sees one simple, single monthly payment. That’s it. Behind the scenes, Tally takes over paying all your cards, making a recommendation for just the right amount each month that will cover your minimum balances, but also knock down your principal—along with an overarching timeline for you to eventually be debt free (and for Tally users, that’s years earlier than otherwise). No tracking due dates, no calculating which interest and what loan and when and why. For those who qualify, Tally will also refinance an average $6000 of your debt down to a lower rate—which, when coupled with intelligent financial planning and management, actually can work. In other words, you go from struggling to remember multiple payments per month and watching your debt grow —  to one payment, no late fees, often a lower effective rate, and a clear view of your path to a debt-free life.

In an area rife with distrust and confusion, Tally has made trust a critical pillar. Jason Brown grew up seeing his family struggle with creating a strong financial picture and always had a vision for how he’d help make the system better. His entrepreneurial journey started in college as he built the largest student painting service in the east coast to pay his way through school. Jason then built a solar financing business with his current co-founder, Jasper Platz. When that company was acquired, Jason decided it was time to dedicate his entrepreneurial energy to the problem he understood and felt most passionate about: the financial health of Americans like his family. Jason and Jasper have recruited one of the best possible teams, with strong product vision, critical engineering depth across payments and banking infrastructure, and deep credit and capital markets knowledge.

This is just the beginning of what is possible when smart financial automation truly begins to guide our financial journeys. Imagine a world where your financial app understands your entire financial picture—from all the types of debt you might have (student loans to car loans to mortgages and beyond) to all your assets (savings, investments) plus your goals in the future (a home, kids, college). Who among us wouldn’t want the automated road map, with travel time and traffic, for what it would take for us to get there?

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