Fixing budgeting

I’ve been thinking about budgeting in Monzo.

I said this in another thread:

I’ve never been one for envelope budgeting, or to set budgets by categories. I was though, thinking this morning about how I’d want to have financial projections or modelling in the app. Put another way, I’d like to see what my finances will look like at the end of the year with no change, with saving a bit extra, or if I shell out on that big expensive thing.

It struck my that the answer could be quite simple (from a user rather than a technological perspective). What do you all think about this?

  • Somewhere in Monzo we have a new feed. But this time it’s for the future, rather than for the past.
  • Future feed would have all the committed spend that summary currently picks up - but with the ability to tap and edit details, dates, amounts etc. You could also create new entries manually.
  • Future feed would also show credits to your account. You can either add entries manually or have it recognise recurring things like salary.
  • If the Future Feed were able to show, say, a rolling period (next 7, 30 or 365 days), or until a fixed period (until the end of the year, month or week) you could then see the predicted balance at that time. And if your scroll up or down the feed, I’d hope the balance changed to match the predicted balance at that time.

Once you’ve done that, you can do some fun things:

  • Add an expected debit for a PS5 in November. The app calculates how much you’ll need to put away every payday and let’s you set up a pot and transfers for the exact monthly amount to meet that goal.
  • Create scenarios or models that you can save: what will thinks look like if I go away for August therefore am not working and will have additional expenses? Or how much will I save if I give up chocolate?
  • You could extend it to cover connected accounts
  • Tell you your average daily spend (by weekday and weekend?) and let you account for that too…

I’m quite taken with the idea (partially inspired by @N26throwaway). But what does everyone think?

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Very much agree overall.

Having some sort of future visibility would be fantastic, and as you suggest above, open up so many other options.

That part sounds ‘easy’ enough, pick up recurring payments, allow us to add some, done(?).

The modelling sounds larger but the potential value it could add would be incredible. Can certainly see that linking in more holistically with proper budgeting, savings goals in pots, paying off debt etc.

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Interesting ideas - sounds like a potential future Plus feature.

However, I think Monzo should focus on some of the things with the current Summary as a priority.

Stuff like including incoming Faster Payments and Direct Credits in Summary, scheduled income and allowing users to change the category of a transaction for just this transaction or for future transactions too.

I think Summary is broken and deserves to be put out of its misery.

It’s confused about its purpose and just doesn’t work :man_shrugging:

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Given the influx of “I have 3 days of money left?! what does this mean!?”, I would agree.

I have Opinions on this as a whole. Will be back with my thoughts. Because I :heart: Budgets.

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I don’t know if it does exactly what it is meant to do, but I quite like it, and find it useful. I can see at a glance how much I’ve spent in various categories and easily see whether or not my spending is on track.

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Future forecasting (as opposed to budgeting) is the bedrock of how I plan and manage my finances. YNAB has recently been able to do what I need in a basic form with future transactions and reporting.

An outline from almost 2 years ago is below. If Monzo did this in the feed, along with selectable future periods in Summary, I’d be very happy:

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I think this is why simple’s approach to a safe to spend value works so much better. Part of it is to do with using the phrase left to spend the other part of it is that it’s fixed to a pre-allocated period.

I agree summary needs an overhaul (or a death?), but I absolutely believe a safe to spend value of sorts from the summary page (though not the ring) should continue to exist prominently in the app somewhere. I think it’s the best glanceable information you can provide folks to give them a very instant and in the moment idea if they can afford to buy something.

Either that, or automate and simplify the entire budgeting options in such a profound way that your actual Monzo balance is your safe to spend money. I think this is the path Monzo is best poised for, and seems to be the direction they’re focusing with pots as the pivotal feature, but I suspect it’s also going to be the one with the most regulatory hurdles to jump over.

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This is exactly what Simple Bank did. And it was marvelous. And now they’re closing :sob:

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I’m not sure I agree. I started budgeting purely through Summary around September 2020 to give it a go and broadly found it very useful. I’ve been thinking about writing a post about my experience and how I think it can improve at some point.

Overall, although I think Summary does need improvements I don’t think it’s far off being an easy-to-use and genuinely useful budgeting solution.

The stuff like projections that are being suggested sound really useful as an advanced budgeting tool - the sort of thing you’d get from Plus.

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Completely agree with this.

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So let me explain. There\s useful stuff on the Summary page, but the feature is confused. It doesn’t know if it’s about future budgets (the ring and left to spend) or past spending (the category breakdown).

I’m very much here for breakdowns of previous spend, a ‘safe to spend’ figure and (for those that need them) budgets against categories. My problem is that it doesn’t really do any of them really well: left to spend isn’t easy to understand in the app, doesn’t include future income and generally tries to be too clever and falls on its face; the spending category breakdown by pay period is confusing (pot transfers especially) - and why, if I’m looking at how much I’ve allocated to a certain category, do I have to add up in my head the two types of spend?

I suppose you could say that my suggestion on future budgeting is necessary but not sufficient. If you could filter historic transactions, or have a better search (hello iOS/Android parity) that might help do it. But basically, I think Monzo needs to think on time horizons: past, present and future.

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I suggested this three years ago, but using explicit pots and an explicit list of things you’d like to buy:

So I see Monzo published this Article on their blog last month (which got posted in the forum but no real attention):

And I wanted to drop a call out to it in here, because it actively talks about multiple styles of budgeting (Zero Sum, 50/30/20, Piggy Banking) - and I just thought how nice would it be if the Monzo App actively supported the ability to budget in many different styles.

Sadly, it seems the budgeting tools within Monzo, don’t align fully/well to the styles they list in that blog.


My Pet Peeve on the topic of budgeting at the moment boils down to:

The mechanism for budgeting is fixed to a sort of “spend tracking” and “piggy banking” approach - and sort of a half and half style. If that doesn’t work for you, the budgeting tools become a little redundant.

I also think that because of the nature of Monzo’s user base (leaning towards a younger audience), the tools are developed to suit a younger user base (generally).

What I think this means is that users will eventually mature out of Monzo’s budgeting style. 21 year old me, finding Monzo for the first time would be delighted with the tools as they exist, but mid 30’s me has more complex needs than Monzo currently caters to. Add in a lack of Joint Account Parity to that mix, and it’s an even bigger issue.


So solutions then.

Thing 1:

  • Simply put, redesign the Budgeting tools from the ground up to allow multiple styles of budgeting. Half of the infrastructure that make this possible, I think, is already there. it just needs expanding. (Pots - are great, and would feature in all systems, as are Categories - they just need threading together in a more complete way, I think).

Thing 2:

  • Bring in better analytics. “What gets measured gets done”. The budget itself is only half of the picture. We’ve seen through Year In Monzo that they have the capabilities, but it gets used for a once-a-year marketing event, rather than an ongoing user benefit. (Sure it would take more ongoing processing, but still). Much like Monzo’s pretty excellent fraud spotting systems; Imagine if you could see trends going in the wrong direction, mid year, so you can do something about it

I know Monzo hates toggles. So I expect it will never happen - but you could quite nicely have an app that can cater to all these systems in slightly different ways. I would be thrilled to even pay for such a system; I’m already paying for a good budgeting app, so why not pay Monzo if they got it right?

anyway this is long so I’ll stop now.

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This!

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The key to a good user experience is making the complex appear simple. I don’t necessarily think that toggles are the answer, but imagine being walked through the steps required and setting it up for you based on your personal style? That’d be cool.

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I would up for all of this. Hope someone at Monzo is taking notes :memo: