Can someone explain Monzo for me?

[Hamsterfan]

I see it recommended a lot on here but can’t get my head around quite how it works. I’m very lucky in that I have job security but household income likely to drop by 60% soon. So I would like to budget more proactively, so if I put £150 a month into a car fund how do I nominate the spending to come out of that pot when I have to buy diesel or pay for my MOT??

It will also help me to work out exactly where the money goes

You can't direct card payments to come out of a certain pot. You would have to manually move money from a pot to the 'main' account but but that takes literally seconds to do.

Direct debits and standing orders can come out of a specific pot (behind the scenes it actually moves the money from the pot to main account to pay it from)

When you get paid (any deposit over £200 I think) you can 'sort salary'. I have a pot for bills so anything paid by DD or SO comes from there and a groceries pot as well as a few savings pots for different things. When I get paid I sort it into these pots so that I know my 'main balance' is free for me to spend and then when I do a food shop I just shift the exact amount from my groceries pot I'm about to spend before I checkout or tap my card.

The bills pot will tell you exactly how much is due to come out that month which is handy if you're lazy like me and can't be bothered to add it all up. For regular card payments (DS Xbox subscription etc) I've just adjusted them so that they all come out the day after pay day.

Can you tell I love Monzo? Their customer service has always been great for me as well although I've seen a few bad reviews online. And no, I don't work for them but I would if they'd have me

Oh, and you can put notes on transactions as well. I do it with Amazon, every time I spend on there I make a note on the payment of what I bought. That could help with car things. Eg you could have an MOT transaction but then if you pay for new brakes at the same garage you could do a separate transaction and note that. You can also filter your transactions if you're looking for a specific one and can filter by note which is handy

If you wanted the money to be in a pot solely for car things, you could just have a Monzo account for car money and only use the card for those purposes, otherwise you get into a level of fiddling about that most people won't be arsed to keep up with.

But it would be quite easy to just open multiple accounts that are funded monthly and designate these as groceries, cars, DC things, personal spends etc.

You could go as far as writing the purpose on the card to help you remember, eg Monzo card - cars, Starling card - groceries, Natwest card - personal spends.

The thing that I love about it is that it makes you aware of those everyday spends. I regularly check the diagram that shows the total amount of money in the account minus the direct debits. It gives me a sense of how much I need to economise to stay in budget, or whether I have enough funds to buy something frivolous.

I use the transaction 'tagging' feature to figure out how much I tend to spend on stuff per month. I did set a budget inside the app which was cool, but that diagram takes the place of the main pie chart that shows you what's available to spend, so I ended up deleting it. Probably the pro version would be better but I'm not bothered enough to pay for it.

The pots are handy for keeping savings aside but I don't use them on a daily basis, eg. I've got pots for clothes as I don't buy them every month or whatever.

You’d have to put the money in a separate pot then transfer it back when you need it.

The good things about Monzo are; everything is really clear and straight forward, it’s easy to see what you’re spending and keep track, customer service is great, you feel like you’re in a bit of a club when you spot someone else with a gleaming orange card 😂.

The bad things are; you can’t pay money in or take it out at the post office, there’s no real bank so you can’t actually pay money or cheques on anywhere (although I believe you can post cheques to them but that’ll take extra time) so you need to have another bank account to pay into and then transfer the money, you can’t have just a joint account you have to open 2 separate ones and then you can have a joint one, people feel the need to comment on your neon orange card 😂.

Monzo is primarily a super nicely designed app.

There is an auto budget function built in, but I completely ignore that and manage my money through pots I create.

Every month, I put money in thrse pots. Its super-easy. Just a click. Monzo doesn't then doesn't automatically take money from your pot. So if you spent money on MOT, you would then need to move it over from that pot. Sounds like a PITA, but actually very easy.

There are other ways to manage a monzo budget, but that's really worked for me and DH.

Monzo has had a huge impact on my money management skills. However, there's no magic to it - its just that the app is super functional. I was showing my SIL and she didn't get it. Her point was that most banking apps will let you open smaller savings pots. She's right, I know, but the app is just so nicely designed it makes it all a lot easier.

If you want to pay in at the Post Office or pay in cheques by photo, you can get a Starling account instead, which is effectively Monzo but better, and I like the card colour more.

@BigGreen What's the tagging feature ?

You can pay cash in at PayPoints but I think the basic account charges. The premium and plus account give you a few deposits for free. I refuse to pay for banking so I have a Starling account as well that I can deposit cash and cheques into and transfer over.

I prefer the colour of the starling card but like the Monzo app more

And a useful thing is that any money you move between pots is instant. I use it for spending money and have a pot for short term savings.

If I want to spend it I can go on the app when I’m queuing to pay and shift it over and then pay.

Monzo has completely changed the way I budget and spend money. It’s opened my eyes to how much and what I was spending on which has been needed as I’ve dramatically reduced my pay recently.
I have about a dozen pots in use on my account and a few on the joint account for various different things - bills (DDs automatically get paid from there), holidays, childcare and a few for the micro savings). One of the best features for me is to be able to hide the pots, it means I’m less likely to dip into them.
I love that you can assign a category to every payment and that you can tag it as well with notes.

@Idontgiveagriffindamn I didn't know you can hide pots - thanks.

Wow thanks all. I do think it’s going to be very useful overall starling seems to have better reviews and you can pay cash in fee free at the post office so that’s on my to do list for Friday

@userxx I just mean the way that once a transaction goes through you can classify it into a certain category e.g. Tesco gets auto-classified into the Groceries category, or you can change a General payment into another category just after it's gone through. It's really helped me see at a glance how much we're spending from each category and helps to keep a rough budget in place.

@BigGreen See what you mean. Bloody love Monzo!!

Starling is basically the same, only better and not owned by an awful human being.

I still have my regular bank account where I leave all my cash for direct debits then transfer the rest to my monzo account.

Thanks everyone I have opened my account with starling arranged a transfer from my main account for tomorrow and I’m looking forward to working out where the money goes 🤷‍♀️