How do you use virtual cards to help you budget?

[gettingalife82]

I've only ever used a virtual card for some online purchases, but now have a Starling account as well as a Monzo Plus so I have ability to create lots of new virtual cards linked to savings pots and on my Apple Pay.

Has anyone got any good clever budgeting hacks using virtual cards? I was thinking of isolating groceries spending onto one card so I can properly track all the little top up shops I do, and then having another virtual card for travel spending.

How do people use their virtual cards to support them to save money and budget more cleverly?

I don't want to sound glib but budgeting is not really super hard or something that requires a lot of hacks or tricks to it IMO, most people just need to set up a simple system and then have the discipline to stick to it (of course you have some kind of neurodiversity e.g ADHD that can make it much harder, I know that).

What I do is: understand all income (obviously if you are just bog standard monthly paid salary person this is easy, if you're self-employed with irregular income or multiple different income streams e.g. benefits, child maintenance it's harder).

Then understand ALL outgoings and I mean all. The money-saving expert website has an audit tool that really helps with this. There's the basics like rent/mortgage, bills, groceries, entertainment/subscriptions but also important to think of more occasional expenses like insurances, car service/MOT, christmas/birthdays, holidays, white good repairs/replacements etc. The monzo/starling type apps can help with categorizing your spend but you do have to do a certain amount of tweaking to get their categories to fit yours and TBH i find it easier just to use a spreadsheet.

Once you have understood current income/outgoings and hopefully found they match up (or set yourself a reasonable budget accordingly) then it's a case of tracking and moderating your spend accordingly. So for me in practice and using the monzo functionality my system is:

1. On Day 1 of the month (which for me is the day I get paid, not the actual 1st of the month) I create myself a new tab for the month on my budgeting spreadsheet and copy across my budget (this doesn't tend to vary hugely month to month but I may tweak it if I know I have a big expense coming up that month which isn't already accounted for e.g. at Christmas assigning slightly more to grocery shopping as I know we'll have guests and need extra food).
2. I then immediately move across fixed amounts of money to my various pots which are for longer term/infrequent expenses or things I am saving for in the medium term (I currently have 1 for Christmas/birthdays, 1 for holidays, 1 for new car saving, 1 just called 'bills' but is for annual expenses like insurances and the cat's vaccinations and suchlike) - the amounts that go into these are 1/12th of what I've worked out my annual spend is, so the total in the pot fluctuates throughout the year), and then also send a fixed amount to long term savings.
3. Once per week I go through all my bank accounts and assign all spending to lines on my budget spreadsheet so e.g. £50 groceries, £1000 mortgage or whatever. Sounds a lot of effort but it takes maybe 15 mins?
4. Once I've reached my monthly total for that line I know I can't spend more (obviously for things like the mortgage that only come out once a month that's easy, things like groceries or eating out spend there's more to keep track of).
5. If I've accidentally overspent myself I need to work out which other line I can adjust for that month e.g. if I've gone a bit wild on the takeaways I know we then have that much less to spend in the supermarket so we'll have to eat freezer food or leftovers for a bit. If I've treated myself to some new clothes over and above my normal budget I can't also treat myself to coffee and cake out until next month. This is the part it takes discipline to do as of course there's nothing physically stopping you just beeping your card merrily and overspending while metaphorically sticking fingers in your ears and la la la ing at the budget - your idea of setting up an account only for groceries might work providing there's no overdraft function (sounds a bit like the old 'trick' of withdrawing your budget only in cash and only spending that, once it's gone it's gone, which feels a bit archaic in our digital age but your idea is a good modern updating of it) but you'll still have to be strict with yourself about using that card/account (no little cheats!) and not putting any extra onto it so it all depends on what psychologically you think works for you?

Hope that helps!

Thanks. Due to a busy life / young DC etc I'm trying to avoid the need to set up spreadsheets etc, aside from the general budget we already have. I'm going to use the virtual cards in the same way you use your spreadsheet to isolate and track expenditure on areas, as I believe there are some things that slip through the net of categorisation and result in us going over budget.