Disclosure: This post contains affiliate links. If you use them I may receive commissions, at no extra cost to you. See my full disclosure policy for additional information.
I started using PayPal to manage my personal finances about 6 years ago, in 2018. I had originally joined PayPal as a means of cashing out my earnings from working as a freelance writer through the website Fiverr. This was my primary source of income while I was in nursing school. (That’s a story for another day.)
After graduating nursing school and diving head first into the world of being a pandemic nurse, my PayPal account transitioned from managing my freelance writing income to managing my personal finances. I wasn’t doing as much writing since I was working a lot of hours at the hospital during this time.
My now husband, and I had just moved into an apartment together as the pandemic was beginning. We had lived with family before then, but given my line of work, we felt it would be best to have our own living space during this time. This also required us to make some adjustments to out personal finances and how we organized them.
He and I have had joint accounts through a traditional brick and mortar bank for several years at this point, and still do. But since I am the primary “financial person” in our marriage, it was up to me to manage and organize our mutual finances. Rent, utilities, etc. I began to have my paychecks deposited into my PayPal account rather than my traditional bank account, and it changed the way I manage my personal finances for the better.
PayPal has added a lot of these features over these past 6 years that I plan to talk about here today. When I first began using it, it was strictly for transferring money from one place to another. Now it’s a full fledged banking service and I couldn’t be happier with it. I’m excited to share 10 of the many reasons why I love using PayPal to manage my personal finances, and why I think a lot of people would benefit from doing the same.
A note from Kate:
PayPal isn’t paying me to write this (They can if they’d like to though…I wouldn’t be opposed 😉 ) I seriously just love the banking system they have in place and am really excited to talk about it.
It’s a Free to Use
PayPal always has been and continues to be free to use. In case anyone is wondering. No, PayPal is not a bank. It’s actually a banking service provided by a bank called Synchrony Bank. It didn’t used to be a huge fan of Synchrony in the past. Due to credit lines I had with them for various purchases. Once I learned that they were behind PayPal my feelings changed a bit.
The only fee you are likely to face when using PayPal to simply manage your personal finances, could be a transfer fee. That only happens if you aren’t willing or able to wait 3-5 business days for a free transfer from PayPal to your traditional bank. If you need to move your money instantly (within seconds) you can do that, but there will be a fee. $0.25 at the minimum, $25 max. It really depends on the amount you need to move.
Transferring from your PayPal account to a friends PayPal is also free as long as you mark it as “friends and family”. If your transfer is marked for “goods and services” the person you are sending it to will pay a small fee. You will not however. Sending money with the label of “goods and services” does make it eligible for a full refund too should something go wrong.
With all that PayPal is able to help you do now, such as paying bills and providing a debit card. I’ve found that there aren’t too many instances that require me to transfer money to my traditional bank account anymore anyway.
Your Money will Be Backed by FDIC
PayPal itself is a banking service. So as an entity they are not Member FDIC (Federal Deposit Insurance Corporation). But since they are a service provided by Synchrony Bank, Member FDIC, PayPal direct deposits are covered by what is referred to as “pass-through insurance”. Meaning, PayPal users who have direct deposits going into their PayPal Balance account are covered for up to $250,000 if they qualify for this coverage.
You can read more about these protections here in PayPal’s Terms and Conditions. I’ve never been one to read through the Terms and Conditions of anything really. But when I was doing research to write this blog post I skimmed through PayPal’s and it was actually very easy to read and understand. Not too much of the technical jargon you see in a lot of other Terms and Conditions pages.
Just as side note. Not only is the money going into your account from your work place insured. So are your purchases. The thing that made PayPal popular years ago was the security it provided with making purchases online. PayPal still offers purchase protection when you buy something using them as your payment method. Meaning, PayPal will get you a full refund if your purchase doesn’t go as planned.
You Can Get Your Paycheck 2 Days Early with Direct Deposit
Who wouldn’t want to get paid 2 days early? Sure, you’d still be getting paid every 1 to 2 weeks, or how ever your workplace does it. But if your account qualifies for early direct deposit you can use this to get ahead on your monthly bills. Which can sometimes give you an extra paycheck in a month. It all depends on when the days line up from month to month, but still.
Whether you will get your paycheck 2 days early or not, really depends on your employer and how soon they make the funds available. This is something you can definitely ask your HR department about, or who ever is in charge of Payroll if you want to know before switching things up.
There Are No Minimum Balance Requirements
For about a year my PayPal balance account was at $0.00 and I didn’t get charged a single fee. Whereas with some of my traditional bank accounts I have to maintain a certain amount in them or else I will be charged a fee. This fee is anywhere from $8-$12. Which sucks if you’re already low on money, hence the low balance. Who wants to deal with that when they’re trying to get their personal finances in order and save money /pay down debt??
I had transitioned away from PayPal for that year because they had got rid of a feature that I really loved to use. Incase you were wondering why I left them for a year. More on that later in this post. That feature is back now so, so back to PayPal I go!
You Can Request a Debit Card for Your PayPal Balance Account
This didn’t use to be a thing back when I had first joined PayPal. Once they made it that PayPal was more of a banking service than it was just a middle man for online transactions, I saw that a debit card had become available. So of course I ordered one. They are free to order!
This makes utilizing PayPal to manage your personal finances 100x easier! You can use the debit card when you’re out and about and need to buy things, or to pay bills online every month.
Their “Goals” Feature Will Help You Organize Your Personal Finances
The “goals” feature offers by PayPal is by far my favorite feature offered by them. Have you every heard of the “envelope system” by Dave Ramsey? If not, let me break It down for you real quick.
The envelope system is a way of organizing your money by expense each month. You take physical paper enveolopes and write down one monthly expense on each one along with the goal amount you need in each. Such as gas, groceries, rent, car maintainance, emergency funds, fun money, etc.
Before turning to freelancing, I worked at coffee shops for several years. Meaning I made a lot of cash tips during that time. This is when I discovered teh envelope system and began utilizing it to its fullest extent. I was excited when I discovered that PayPal had the ability to allow me to do the online version of the envelope system.
Using PayPal Goals, which is a feature of their Savings Account, I have each one of my bills broken down into their own Goal. (The fact that Goals is a feature of their Savings Account is a huge new thing that I am excited about. More on that soon.)
I have a “goal” for my mortgage, my cell phone bill, health insurance, car insurance, and even emergency savings. Instead of having all of my monthly bill money sitting in one account as one lump sum, I can now see how much money I have available for each bill.
PayPal Cash Back Rewards for Spending Money Online
This is a feature that’s fairly new to me. Although, I’ve been using it unknowingly for long time now. For years I’ve use the app/chrome or Safari plug in “Honey”. A program that automatically applies coupons to your online shopping cart. I’ve saved LOTS of money through Honey and will likely write a blog post about them in the near future as well.
In January 2020 PayPal bought Honey. Which was news to me pretty recently. I’m really glad that it happened thouhg ebcuase it makes getting cash back with Honey that much easier. They still will apply coupons to your online shopping cart. But now you will also get a percentage cash back at various stores that you probably already shop at regularly.
Now that Honey is a part of PayPal your cash back earnings are available instantly within your PayPal account. No need to go searching through Honey to find the redeem button and wait for them to process and hit your account as cash.
The PayPal Savings Account Has a Very Competitive Interest Rate
I was shocked when I recently saw that the PayPal Savings account APY (annual percentage yield) had climbed to 4.30%! Which is the highest interest rate I’ve seen available for any high-yield savings account that didn’t require a $150,000 deposit to open and for that balance to be maintained.
The great things about this is that if you use the “Goals” feature that is connected to the Savings account in PayPal, all of your budgeted money will help you to accrue interest monthly. The hundreds if not thousands of dollars that you have organized in your Goals will earn you interest every month as one sum of money.
If you’re not excited about this you probably should be. “But the mart changes all the time. That could go down any day.” Sure, it definitely could drop to 1.23% in the blink of an eye. But why not take advantage of it while you can? I’m no financial expert by any means, but I’ve noticed that savings accounts that have high interest rates tend to stay on the higher end. They are competing with other banks interest rates.
You Can Automate Transfers to Your Goals
On pay day there’s nothing I love more than moving my money around and preparing my budget for the next two weeks. However, as my life continues to get busier and busier, the time I have to do that each pay day is getting slim. Which is why I love the auto transfer option available with a PayPal Savings account.
If your paychecks are pretty consistent week to week, this may be a feature that really gives your personal finances the boost it’s been needing. Automating your savings account takes the thought and anxiety out of the process so after some time you don’t even notice it happening. Before long you’ll have a nice cushion in your savings account.
PayPal Supports Buying/Selling Crypto Currencies
Crypto is something I’ve never really delved into or desired to learn too much about. Not yet at least. But, for those of you who are into Crypto, PayPal supports that. Within your PayPal account you can buy, sell, or hold Cryptocurrencies such as Ethereum, Bitcoin, Litecoin, and Bitcoin Cash.
Well, that’s the end of my spiel about PayPal and why I love it so much. Again, I’m not being paid to talk about this banking service. I don’t even think they have an affiliate program! I just think they’re great fro keeping my personal finances organized and helping me save money from month to month. What do you think? Are you going to make a switch or do you think PayPal isn’t worth your time? Let me know in the comments!
