When making big purchases, i.e a Laptop or Phone it can have a detrimental effect on budgeting. The purchase “spike” can ruin budgeting for that month.
The current solution is to “ignore” the payment from your budget to make it seem like it never happened. Although this helps, it’s less than ideal since I would like to plan and budget for these big spends.
My current workaround is to use regular payments to pots, such as putting in £50 per month for big spends which will then fund these purchases.
However it has one big downside, I must save up the money first each month before purchasing, even if I already have the money in my main balance. The pot payments per month also don’t appear in my balance as they are counted as fixed extras.
To reduce the need for the above workaround, Monzo should give us the option to spread out a payment over a desired duration. For example a phone I may choose spread the cost over 24 months. This would then result in 24 equal payments coming out of my spending budget.
EDIT: To clarify, I’m not suggesting using Loans to make purchases.
this would be funded entirely out of your own balance. However the lump sum purchase would not be negated for your budget for that month. Instead the subsequent monthly payments would
EDIT 2: To futher clarify here is a working example.
Month 0: Initial balance £1000 , spending budget £100
Purchases £1000 phone, balance goes to 0, for the next 20 months £50 comes out of spending budget
Month 1: balance 0, spending budget £(100 - 50) = £50
Month 2: balance 0, spending budget £(100 - 50) = £50
Month 20: balance £0 , spending budget £(100 - 50) = £50