How I Learned to Stop Worrying And Love The Budget

The roots of my social impact journey

I grew up in Israel, but I was always obsessed with American pop culture. I consumed movies, TV, songs, games and brands of all sorts. In fact, when I later moved to the US and my American drum teacher and I were geeking out about music, it took a while until he mentioned a band I hadn’t heard of and said: “I forgot you didn’t grow up here!”

Granted, pop culture is only one aspect of national identity. As someone who’s lived in the US for nearly a decade now, I can’t pretend I understand all the nuances of American subcultures. Yet it’s safe to say that Israel’s consumption culture isn’t too different from its American counterpart. We all dream of homeownership, and we’re all nudged toward extreme consumerism and living above our means.

A shared culture of easy — and expensive — credit

When I was growing up in a suburb of Tel Aviv, my parents, neighbors and family friends generally paid for things using checking account overdrafts. We all bought household items in installments — Buy Now Pay Later has always been part of Israel’s payment network. Banks allowed overdrafts, and we used them freely to live above our means. As a result, the idea of being in debt — even temporarily — was considered quite common.

Similarly, Americans are encouraged to over-utilize credit. Building a credit history through consumption is necessary to achieve a strong credit score — which in return grants access to credit at preferred terms. But purchases rarely stop there. Influencers and direct-to-consumer ads on social media constantly nudge us toward brand adoption that leads to an unsustainable lifestyle for most. Do you think you can resist the temptation? Good luck; Amazon develops weapons of mass consumption that make one-click shopping too easy. Maxed out your credit cards? Don’t worry, another pre-approved card is on its way — just roll the balance from the old one to the new one.

Sadly, in both countries, systemic issues of cost-of-living increases and lack of financial education have led to endemic, risky consumer behavior — and for many individuals and families this means a spiraling negative balance. In fact, a large percentage of US households (up to 78% according to a 2019 survey) live paycheck to paycheck — regardless of their income. This is an insanely high percentage, and it’s completely decoupled from the US poverty line (approximately 9% in 2020).

Debt collection revolution

I’ve long believed that tech solutions can play a bigger role in shaping our financial lives and encouraging better money management. So I was excited, in 2013, to found TrueAccord — a fintech startup with the aim of transforming the debt collection industry from the inside out.

Why debt collection? Because 70m+ Americans deal with it every single year. For most of them, getting out of collections takes immense effort, and they just don’t know what their rights are — or where to start. They float in a sea of uncertainty, pulled down by stress and indebtedness. For these people, TrueAccord is their lifeline.

Incidentally, if you think that individuals in arrears are reckless, or that they’ve gotten in trouble because they don’t want to pay, think again. It can happen to anyone. A debtor can be a hard working family with one unexpected medical bill that exceeded their safety net. Or a neighbor that went through an ugly divorce. Or a friend who received terrible advice when they took their student loan.

I believe these people deserve the opportunity to rebuild their financial lives — and this is exactly what TrueAccord provides them.

I have seen countless, inspiring customer testimonials just like this one. While reading them, I’ve noticed that many of our customers ask us to take over the remainder of their accumulated debts (including their credit card debts, healthcare bills or even those that ended up in litigation). To me and my team, this is a clear sign that we are doing something right!

But back to the roots of my journey: why am I so passionate about TrueAccord?

Early lessons

My family didn’t have any generational wealth. My father’s family were Holocaust survivors who emigrated from Poland after WWII, and my mother’s family emigrated from Egypt in the 40s. Both arrived in Israel without assets. My older brother and I shared a pull-out bed until our early 20s, and our parents slept in the living room for a number of years. We didn’t go on many family vacations.

My mom — no stranger to managing on a limited budget — instilled in me Rule No 1: “Pay with the money you have, not with the money you don’t have”. She’s no Warren Buffet, but her rule makes sense (and to this day she maintains a general ledger).

In contrast to my mom, my dad was never a saver. When he left his long-term job in the 90s and received a severance package, instead of saving the money, he spent $10k on a single PC. We were five people living in a 700 sq ft apartment, and instead of improving our living conditions he got us a ‘super-computer’ — not exactly a rational decision. On another occasion, while my mom was abroad with my brother for a couple of weeks, my dad managed to buy two TVs, a washing machine and a dryer. (Mom’s Rule No 2 is “Don’t tell Dad we have a surplus”).

Yet frugality, financial discipline and mental accounting saved us from worsening the situation, and eventually helped us prosper.

Financial muscle memory

I learned to have a healthy relationship with money by growing up in a family with limited means and a mother with responsible financial habits. Since age 14, I’ve been making money for myself. For a couple of years I worked at summer camps and office jobs, in my school years I gave tutoring lessons, and I even built a few websites in my teens. I saved every penny and carefully budgeted my expenses, so at graduation time, I was the proud owner of a fat money roll (the kind Tony Soprano likes to flash around). When my friends and I enjoyed our long-awaited post-graduation blowout in Eilat (Israel’s equivalent of Las Vegas), I was able to pay for the entire week’s trip in cash!

When I joined the tech industry a couple of decades ago and increased my income, my savings grew larger than my expenses. But because of a good grounding in finance, I resisted ‘lifestyle creep’ and, instead of getting carried away by consumerism and splashing out on must-have brands, I was able to put together a few small investment portfolios.

If you’re fortunate like me, you’ll have reached your teens with a good attitude about money, so that you budget well enough every month and carefully plan your expenses. Over time, you may well be able to start stashing away small monthly sums in a rainy day account — perhaps to anticipate medical emergencies and so on. You might even be able to earn a little bit of interest on your savings. This is the ultimate goal, but the financial issues faced by most are much more fundamental.

Teaching good habits

I was lucky that my relationship with money was established early (as you can see, I followed my mom’s advice, not my dad’s!). For the longest time, I thought my insights and habits were nothing special. And then I began to read stories about the millions of Americans struggling to make ends meet — in every kind of household, across every demographic divide.

I realized that although the mechanics of good personal financial management are relatively straightforward (increase income; lower expenses), staying in control is really tough — until it becomes a habit. At TrueAccord, I saw how those who face collections struggle to exit the vicious cycle — often getting out of debt and straight back into it. Can TrueAccord encourage healthy habits to reach escape velocity? You bet it can.

Putting debt relief in the hands of consumers

So in 2019, together with my team, I embarked on the next step towards TrueAccord’s empowerment mission: Engage, TrueAccord’s direct-to-consumer product. I wanted to empower customers to take control of their financials — making it easier to discover what they owe, and providing them with the proper tools to handle the situation digitally. Today, TrueAccord’s customers are increasingly leveraging Engage in their journey out of debt and up the economic ladder.

To infinity and beyond

When I launched Engage, my personal experience was both my moral compass and my motivation to do good at scale. Today, with TrueAccord (and Engage) helping thousands of Americans exit the debt cycle every day, I’m thrilled to witness the magnitude of our work. Yet at the same time it’s only the beginning of my journey. I’m working on our next-generation innovation, while TrueAccord’s 300+ employees — who share my enthusiasm for the mission — are scaling up our product offerings and technology.

Did my story strike a chord? Do you share my burning desire to do good and give back? Then please get in touch; I’ll be glad to talk and hear your story. 

Even better, come join me on the ride: https://jobs.lever.co/trueaccord. Or, if you know a TrueAccordian, ask them to refer you — we have a very generous referral program.