My Money's Gone To Pot
Or rather, gone into various pots.
I’ve been meaning to type it up for a while, and I have some of my lunch hour left, I figured I should “do an blog” to remind myself in the future how I sorted out my budgeting by using the pots feature on Monzo.
A little while back, I found myself overspending every month, and decided that I needed to get a handle on things, to avoid running up a big debt (ok, more of a big debt, hi credit cards), and after the whole arm episode last year, to try and build up some actual savings, as apart from that one time I was made redundant, I’ve never had any savings to speak of.
I used to have a second bank account for bills, which did at least give me a little protection against not being able to pay the mortgage, but I was in a cycle of using a credit card for everything, then paying it off each month, from rebuilding my post-student credit rating. That overspending I mentioned, however, did not help anything other than slowly building up an outstanding (and it really was very impressive…) balance.
After doing a balance transfer, I managed to break the monthly credit card cycle, but gave myself a different problem, in that I was aware of a lump of money in my current account, so the feeling of “having money” did nothing to curb my spending.
When Monzo released their pots feature, I decided to move my money into a pot which I imaginatively named “Hidey Money”, and give myself a weekly sum of money every Monday morning. This was partially successful, but not as much as I wanted, and I was regularly running out of weekly budget by Thursday. Luckily for me, Monzo released their IFTTT integration, and I was able to use that to automate myself a daily budget, which seemed to stick for me. There were (and indeed still are) ad-hoc transfers out of the Hidey Money pot, but the spend less habit was starting to stick a little.
Since I started with the bills and the hidey money pots, I have expanded my use of pots slightly, and currently have the following set up:
- Current account
- what it says on the tin, pay comes in here, I move it out into pots.
- Daily budget is put in here, cash withdrawals, transfers, and anything I spend on my card (food, commuting, drinks) come from here.
- I transfer enough here to cover the monthly bills; mortgage, electricity, council tax, etc.
- I have a minimum level that I top this up to each month, to cover all the bills and some level of emergency.
- 2020 goal is to increase the buffer here to have enough for multiple months of bills.
- Hidey Money
- the aforementioned pot where I put what I think of as my ‘monthly spending money’.
- I reduced how much I transfer to this pot recently when I created the ‘Fake Savings’ pot, because I was falling into the trap of having an amount, so considering it spendable.
- Commute Savings
- This pot has had an incredibly quiet twelve months, but using the IFTTT integration, every time I cycled to or from work, I transferred £3 from my current account into here. which was excellent motivation to cycle even in terrible weather (oh hi there, the beast from the east, and storm doris)
- I used this pot to pay for parts and maintenance on my bike, or to “treat” myself to things like a new mattress when I needed.
- 2020 goal is to get back on my bike and start having money move into this pot again
- Good Causes
- Used for monthly donations to charidee, and occasional one off contributions to fundraisers which I deem worthy.
- As well as a monthly transfer from my pay, this pot is set as what Monzo call a “round up” pot. If I spend an amount which isn’t an exact pound amount, the difference to the next pound is transferred here.
- Used to dig myself out of (and now avoid) the annual credit card hit of MOT/servicing/parking permit/VED/insurance.
- A monthly transfer when I get paid
- 2020 goal is to have enough in here to cover the annual costs when they roll around again
- Fake Savings
- Currently called fake savings because I’m using it to pay off my credit cards (due to happen in February)
- 2020 goal is to rename this to actual savings once the credit cards are paid off.
As I said, this is mostly just posted up to remind myself in the future, it isn’t intended to be a preachy how-to, you should seek advice from a qualified financial advisor, your mileage may vary, the value of your investment may go up or down, do not re-freeze, eat within 3 months of opening. Also, if you are genuinely struggling, please do search out an appropriate local advice/assistance service, and try to avoid the payday loans/loan sharks.
[I suppose I should add a quick disclaimer/disclosure here that I’m a shareholder in Monzo, but I honestly don’t care either way if you are or aren’t, or do or don’t want to move your current account, because it seems like the right thing to mention. This post is all my own work as a random dude on the internets]