Spreading payments


(Ed Stubbs) #1

My main issue when budgeting is with one off sizeable payments which I don’t plan very well for.

Case in point being my car insurance. You can pay monthly or all up front and I pay up front as it’s cheaper. So there’s let say £660 coming out in one month and then nothing for car insurance in the intervening 11 months. I tend to forget about the monthly cost of the car insurance when budgeting in the months which I don’t pay for it which means I’m spending more than I should be.

There’s two options I see for the app, one is to save into a virtual account entitled Car Insurance or whatever you’re saving as has been discussed in the community before, but the other would be to have the option in the app to spread a one off payment over the 12 months (or over whichever period required), therefore every month, or every anniversary of the payment, 1/12th of the payment would be added to the payments stream.

The major issue I see is that you have to pre-load the card with the £660 prior to the payment and it would reduce the balance at the outset, not every month (with £30 like in my example).

So perhaps it wouldn’t work…but maybe there could be a reminder somewhere on screen to take the monthly payments into account, such as a small circle with the number of payments that you were spreading into that month in the corner etc. just some sort of notification that you need to stay £30 under your budget for that month.

Thoughts?


#2

great idea. very useful suggestion


#3

This does sound like a good idea - would be possible with a generic fund bin system you can schedule top ups into, and set certain merchants to take money from. So you’d:

  1. Create a bin called “car insurance”
  2. Set an auto-topup for £5 every 1 week
  3. Make a standing order (if added) or set it so all payments from “Bob’s Car Insurer” comes from this bin

This imo is the most customizable way to do this


(Ed Stubbs) #4

Depends how you look at the payment I suppose. Some might look at it as a saving thing using virtual bins as has been suggested in one of the more popular threads. However it ends up being an estimation as to how much the car insurance (or whatever the bill might be) is likely to be at outset which could be pretty inaccurate.

And I tend to look at a savings pot as something I’m looking forward to such as a holiday, new car or mortgage deposit etc

I think I look at slightly differently in that when I pay up front, I would then know how much I would need to avoid paying in the subsequent months, as if i’d paid the monthly cost as an ongoing bill like they’d given me the option. But as you know the money would come out at outset and give me the issue I was describing in the post, the fact that i’d forget about it and overspend.

This was why I’d like the option to spread the payment or be reminded in the app not to spend the money again.

It wouldn’t be necessary for all one off payments, like I said a lot would be relevant for a virtual savings bin, as has been discussed at length on the post, but some annual type payments it would be useful for I reckon.


(Ed Stubbs) #5

Looking back at this, the issue of having to pre-load the card with £660 in my example would be solved when current accounts launch.

However I’m sure it’s probably further down the list with the focus on a marketplace and other features (apple pay, custom time frames, bill splitting, virtual saving bins) taking up the developers time.

Fingers crossed it is done this year though :crossed_fingers:


(Patrick) #6

I like this. Very similar to what I was thinking earlier so I am just posting here.

I would love to see intelligent saving pots or envelopes (or whatever you want to call them) that would be assigned for each of these payments. You could tell the pot what the savings target would be (what is this bill going to cost you) and the predicted day on which payment is due. The pot will then calculate how much you need to save weekly/monthly for you to be able to pay this and if set to do so automatically ring-fence these amounts for you weekly or monthly.

Say my insurance is up for renewal the 2nd of February every year. This 2nd of February I pay £660 (Just to continue with above example) but I had set the savings pot/envelope at £700 just to be on the safe side or in case of premium increases. The pot now has £40 and the app can now calculate that I need to save £660 for next February. App can then notify me when I should be putting funds into this pot (weekly or monthly) or automatically do it for me if set to do so. If there is a month/week were I cannot pay or the months/weeks were I pay more (if salary was more than expected or I managed to seriously cut down on some spending) then the remaining payments to this pot would intelligently auto-adjust.

I love the idea of treating these as monthly direct-debits which I have no option but to honour (I would still need to pay my insurance monthly if not done so annually) so I have the money there when the bill comes round.


(Alex Sherwood) #7

Thanks for sharing your thoughts on this, it’s always interesting to see how other users are imagining new features & you’ve mentioned some elements that I hadn’t thought of :bulb:

Following on from

I’m guessing that the Targets feature could be adapted to work as you describe. The Overall Monthly Target would be the total amount that you want to save & the alerts (:traffic_light:) would show you whether you’re on track to hit your saving goal, within the timeframe that you set.


(Alex Sherwood) #8

Here’s some more thoughts on this use case from @jshrager