Monzo needs to help us see the forest for all the trees

Monzo necessarily began as a prepay card, excelling at showing discretionary spending. But that clear distinction was lost with the current account. There is no longer a separate, cohesive display of discretionary spending. Additionally, because of this prepay card ancestry, Monzo has never truly dealt with timescales larger than a month. There’s no larger perspective in your endless Monzo Groundhog Month. Savings, debts, pensions, mortgages, etc. all span long timescales. Monzo has pockets of these, but there’s no cohesive overview. To truly fulfil its role in the center of our financial lives, Monzo needs to tell us where we are going, not just where we are right now.

Categories suck. They’re wrong for almost everyone, both leaving large gaps and simultaneously having too much overlap. One can sensibly tag a hand soap purchase as any of: shopping, groceries, personal care, general, or family. This wouldn’t be so bad if it weren’t for the glaring omissions; gifts, charity, and many others. Many reasons have been given over time, such as:

  • Application complexity for the median user.
    • Except custom categories are optional, meaning zero obligatory complexity.
  • Automatic categorisation is preferable for the median user.
    • Except it’s impossible; there just isn’t enough data (is this Boots transaction for soap or a snack?). And it’s narrow-minded to presume that one view is absolutely correct.
  • They undermine the Monzo Marketplace
    • Except Marketplace suggestions will require precisely identifying users’ individual bills - categories are useless for this. Further, categories are most useful for non-repeating discretionary spending - the one part of spending irrelevant to the marketplace.
  • Tags solve this.
    • Except tags are currently close to useless; second-class citizens to catagories across the interface with no overview at all.

Therefore, we need the following

  • An inter-month view of our finances.
    • Modelling of savings in a fluid way so that future purchases can be reprioritised. “How long until I can afford X? What if I bought Y first?”
    • Modelling of savings which contribute to future services, such as a child’s university tuition or a pension. How much will be banked by such-and-such a date?
    • Modelling of debts - amount and repayment schedule.
    • Graphical dissections of spending. Where are the pie charts? Show us how much spending is discretionary vs obligatory, and how we might improve our financial future by modifying our current spending patterns.
  • Custom categorisation of transactions, as a first-class application object, for properly dissecting discretionary spending.
    • Let users choose how they want to dissect their finances.
    • Help users distinguish between discretionary and mandatory spending.
    • Help users distinguish between planned and unplanned spending - an important distinction for budgeting.

I really hope that we start to see more of an overview approach in the app soon.

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I agree that the categories are not particularly useful. I don’t intend to use Monzo to track my outgoing expenses and their “categories”. I’d use something more sophisticated for that, perhaps a spreadsheet. For me, Monzo’s categories just add to the user experience.

Necessary vs discretionary spending would be amazing.

I’ve been reading about the 50:30:20 rule to budgeting where:

  • 50% of your monthly income goes on “needs”
  • 30% goes on “wants”
  • 20% services debt or goes to savings

Having a way to categorise into one of those three groups (and show your habits as a pie chart) would be great.