App review: Monzo (5 stars)
Pros: Free app, break down of spending, notification of daily spends, transfer money easily between friends, free transactions overseas
Cons: Have to remember to top up
I have always been better at spending money than saving. So I knew the only way I could possibly hope to save would be see where I was spending and whether I could rein any of it in; and therefore hope that I could put some money into savings at the end of the month. That’s where Monzo comes in.
Monzo is one of a number of new so-called “challenger banks” which have tried to disrupt the traditional high-street banking model with a flashy app and a neon card. Whilst Monzo previously only offered charge cards, they now have a fully functioning current account that tracks your spending and breaks down your expenses into 10 categories such as eating out, bills and transport. This is a really easy way of seeing where your money is going and therefore where you can think about cutting back. With every transaction you get a notification of what you’ve just bought and how much you have spent so far that day, this usually makes me think twice about deciding to get that extra G&T on a Friday evening or yet another top?
Rather than having my salary paid directly into the account (which you can of course do), I choose to use my Monzo account as a top-up card. I find that this really helps with budgeting as once you have spent the amount you’ve allocated for the day/week/month; you have to top the card up again. This helps you to work out whether you’d been too optimistic when setting your budget in the first place, or if you could have gone without that second Starbucks everyday.
Another real benefit of Monzo is the fact that it is so easy to send money to friends or even split the cost of a bill. You can send money to any contact on your phone without needing their bank details (always a real pain trying to remember sort codes and account numbers), and you can even remind your friends if (as expected) they never actually bought you that drink inside after you paid for the taxi.
A huge attraction to Monzo is the benefits of using the card abroad. Monzo lets you withdraw up to £200 per month oversees without charging you, and then charges 3% on any further withdrawals. Compared to the daylight robbery we normally experience with banks’ overseas charges, this is pretty generous. On top of this, there are no charges for using your card abroad or for transactions made online in a foreign currency.
Another handy benefit is if, like many of my friends, you are prone to losing your purse/wallet after a couple too many drinks; there is a freeze button on the app so you can block the card straight away. No more rounds of drinks for the lucky person that finds your card and decides to treat all their mates.
Finally, Monzo recently launched a saving “Pot”, a new feature where you can put your money to one side as you save for a new holiday, phone or even a house. You can transfer money from the pot back onto your card but I’m a lot less tempted to do that when I know every time I do that I am reducing my chances of lying on a nice beach somewhere hot.
I know that with my terrible will power I will always struggle to stick to a budget but being constantly reminded about how much I’m spending and what on means that I have definitely seen some progress in my saving since signing up.
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