Smoothing of annual payments into monthly amounts

[conor (Conor Hackett)]

Hello everybody,

Thanks for the feedback on this. It is clear that I have not explained this properly. @anon75875116 has understood this as I hoped but I will clarify for others.

@anon75875116

To be clear, this is all about how the cost is represented in Spending right? If so, sounds awesome.

You would still make the payment in full at the start, but it would then it’s effect on budgets etc would be spread out into future months.

That is exactly how I envisage a solution working.

@glasgow

@conor Someone’s still got to pay the amount up front though so there’s still lending involved in that

For amazon prime specifically you can already go on their website and change to monthly

I think you have slightly missed the point. The idea is to be able to leverage the annual pricing to get a discount.

@o99

Sounds like you’re basically asking Monzo to provide your with up to a year of Interest free credit on a rolling basis. I don’t see how that would be sustainable.

Why not use a Pot? Make a list of all the subscriptions and expenses you pay once per year. Add up the total amount and divide by 12. Set up a monthly scheduled payment for that amount into the Pot and then when it comes time to pay, remove the money from the Pot.

Alternatively, if you have a good enough credit history, get a credit card with long interest free period (2-3 years) to use for these types of purchases. Pay back the ave monthly cost as card repayments. Once the interest free period is up, cancel the card and get another one.

I am not asking for credit. I have the funds to pay the entire amount up front but I would like it to be deducted from my main account each month. So in effect I would pay (from my current account), the entire amount once off. So that is one transaction between myself and “Amazon”, using my money.

I would envisage a possible solution (algorithm) being something like this:

• User makes single transaction for 120 to merchant
• User selects option to “smooth this payment over 12 months”
• Monzo will calculate monthly amount: 120/12 = 10
• Monzo will deposit 11 months worth of cost back into main account (110), from a pot, meaning the current month we have only been deducted the amount equal to one month (10).
• the next month and subsequent months, Monzo will deduct (10) from main account back into the pot.
• At the end of the 12 months. The original pot that the funds came from will be replenished and the user will have spread the cost of the transaction over 12 months, making budgeting easier.

This could be really useful for me because I have a number of things that I pay a lump sum for in order to enjoy discount on services rendered on a monthly basis.

This would really help me budget better.

I think implementing the functionality is not difficult. It’s more about how this is presented to the user. With Monzo adding loads of cool features, if not executed correctly I imagine they run the risk of ending up with a spaghetti type log of transactions… obviously they are doing a super job thus far.