By enabling external transfers directly into pots the role of a pot could be inverted from āspending leftoversā to āprimary purpose of incomeā. Additionally, this would solve a lot of problems for several classes of minority users (though in aggregate many, many people) who have non-standard income streams - both in terms of when, and how much, they get paid.
Case 1 - Budgeting
There are currently a number of ways to add to pots: manually, scheduled, coin jar, or IFTTT. However, all presuppose that you keep the bulk of your monthly money in your current account. If income was directed to a pot then a scheduled pot withdrawal could act as income, and could be set to the amount that the person has entered in their budget. This would put more of a focus on saving money, rather than spending it.
Case 2 - Fluctuating income
Freelancers, Contractors, Students, and others donāt get paid a fixed amount on a fixed day. This causes Monzoās spending summaries to be pretty broken. For instance, if you work for yourself then you will likely have a company bank account. You will pay your money out via a mixture of salary and dividends, with odd amounts at odd times. This doesnāt work well with Monzoās current app. If, instead, incoming money could be directed to a pot, and then extracted monthly via a scheduled pot withdrawal, then it would solve the problem of heterogeneous income by making it look like it is actually normal income.
Summary only lets you budget monthly, and doesnāt work well when youāre paid early or late. We want to make sure it can understand when people are paid at different intervals, and handle exceptions better.
Except that here rather than dealing with exceptions to a general rule for income, we are dealing with people who are always the exception (i.e. a more general case).
This is exactly what I do. Any time I get money from student loans or part time work I just dump it all in one pot, then have a scheduled payment coming out from that pot to my main account
Weāve been conditioned by YNAB so our child benefit etc goes into a pot and the pot gets emptied on pay day. Not overly hard to move it to a pot (and way easier when joint pots arrive).
I really like this idea. I think it would tie in really nicely with one of my main requests - DD/SO payments direct from pots.
Basically my issue is that i get paid every 4 weeks (13 times a year) and most of my bills are paid monthly (standard montly DD), with a few paid quarterly (not sure why water companies still do this).
I had initially planned on an automatic transfer from Main into my āBillsā pot when I get paid so there was enough, and then all DDs go from that pot. Not yet possible and waiting developments from Monzo.
If my salary went into the pot automatically and then money ātrickledā back into main for each bill or general spending throughout the month (probably weekly to keep my spending under control) then that would work really well for me.
That is a very interesting issue. Summary may need to be expanded to include āManagementā or āSpendingā pots differntly from āSavingā pots.
I think that this could (perhaps!) replace the need for DDs from pots? Assuming that youāre viewing Monzo through the lens of the Budget feature, having the funds for your bills in your current account all month shouldnāt matter as itās allocated to bills in the budget. And using this feature you could āsmooth outā your income very nicely (you are paid more frequently than once a month so it would work well).
I think that thereās a careful line to tread between doing something additional and useful to smooth out peopleās income, and reimplementing the budgets feature, badly, via separate pots for each budget item. But yes, you are right, this would be basically a āmanagementā pot. The thing is that most banks allow you to access your savings accounts via a sort code and account number externally so itās in reality a feature-parity issue with legacy banks, rather than a wild new feature request .
If assigning account numbers and sort codes to each pot is onerous, then perhaps this could be implemented most simply by matching a payment reference? As in, you assign a particular reference to credit a particular pot rather than your current account.
I donāt think that an additional account number or payment reference match should be required; I thought the DD from Pots feature should be fairly easy - it is not about associating the merchant ID but the registered direct debit, so that would simply be an additional setting against the DD itself, much like the Category or another tag.
I do exactly the same thing with first direct. JUst need a second account i can setup DDās from and it takes a set amount from my current account once a month.
Youāre right they donāt. I was commenting to show I think for people with irregular or non-monthly incomes they would be complimentary features in my view. Having the ability to pre-define where regular payments into the account go to (salary direct into a pot) and/or where regular payments leave from would be potentially very powerful to help budgeting for regular/committed spending.
Iād love this feature. Itās exactly how I used pots and weekly I release money for my budget, While I like this and itās helped me budget, itās made the spending summaries pretty pointless (and confusing) to me.
Thatās a lovely idea: essentially āLook after the penniesā.
When the prepay card became the joint account I think that some of the sharp edges Monzo enabled got blurred - before Monzo was a great way to dissect your discretionary spending, whereas now you can end up with everything in there and itās not nearly as clear. Yes there are categories, but they donāt always work very well, and thereās no overall ādiscretionaryā category.
The categories really do exemplify this tension. How can āHolidaysā be a category alongside āEating Outā? Holidays require saving, whereas Eating Out is discretionary. While holiday spending as a categorisation for spending makes sense, it makes absolutely no sense to have that vie for space in a budget with your discretionary expenditure. The correct correspondence in a budget is, surely, holiday savings vs discretionary spending.
I find that these month-to-month fluctuations undermine my ability to understand my cashflow.
This thread mostly deals with variable income, but I think that thereās a parallel story about variable spending. Savings towards a holiday are one aspect, but there are also bills which come in on an odd schedule (say quarterly, annually, or the rather spectacular 10-months-out-of-12-thanks-council-tax). In addition, a bill appearing on any schedule may have variability in the amount - e.g. a mobile bill.
Iām not sure what the solution is, but I would very much like it if Monzo handled both income and spending variability more coherently.
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