For years, I tried finding a solution to my biggest financial struggle – budgeting my day-to-day spending. 

In general, I’m pretty good at the big picture stuff, i.e, my home budget. I transfer my outgoings into separate accounts and save money as soon as payday hits.

However, when trying to make my daily budget last, I really struggled to keep my balance above £10 a week before payday. 

Enter Monzo. 

I’ve used Monzo for nearly two years and it’s hugely impacted my relationship with money. If you haven’t heard of Monzo, don’t worry – I’ll be going through what Monzo is, how it’s helped me and why you should get one too. 

What is Monzo?

Put simply – Monzo is an online bank. It doesn’t have any branches and doesn’t offer other products like credit cards or mortgages that traditional banks might. 

But, it’s a certified bank authorised in the UK by the Prudential Regulation Authority (PRA), regulated by the Financial Conduct Authority (FCA) and protected by The Financial Services Compensation Scheme (FSCS). This means that your money is protected and up to £85,000 is guaranteed by the British Government if anything goes wrong.

So, it’s a bank, what’s the big deal? Well, the app has lots of unique features such as bill splitting and a virtual piggy bank, making managing your money effortless and kinda fun. 

But to fully explain how I use Monzo to budget, I need to introduce you to its flagship feature – Pots. 

Separating money using Monzo Pots

I’ve always believed that keeping all of your money in one bank account is a bad idea. But Monzo has changed my mind, sort of. 

Monzo allows you to separate your money into virtual ‘Pots’ that are excluded from your available balance so you can’t accidentally spend the money in them. 

While I still don’t advocate keeping your life savings in your current account, this feature has changed my financial life.

I currently have the following Pots:

Daily Budget: My day-to-day spending. This is explained more in the Scheduled payments section below.
Travel: I work in London, so I keep my train fare in this pot so I can always pay for my commute.
Home Savings: I’m planning to move the money to an ISA eventually, but I’ll discuss my saving habits in another post to explain fully.
Fun Stuff: I explain below.
Emergency Fund: I keep up to £100 in here for, well, emergencies.

Scheduled payments

I’ve tried sticking to a monthly budget, but I’d usually spend it all in the first two weeks and have nothing left for the month. I’ve tried weekly budgeting, but the same thing happened. 

The only way I’ve successfully budgeted is with a daily budget. 

So basically, once I’ve subtracted my non-negotiable outgoings and savings from my salary, the money I have left is divided by the number of days until my next payday and deposited into my Daily Budget Pot. 

I then use the scheduled payments feature to create an automatic withdrawal every day until the following payday.

As long as I refrain from withdrawing any more money, I no longer run out of money throughout the month. 

Fun stuff

The only problem with daily budgeting is socialising. While I may have enough money to have dinner with friends, it’s split up throughout the month. 

Before creating my Fun Stuff Pot, I’d withdraw money to pay for social events and then run out of money at the end of the month because I didn’t account for it. 

So, every month, I look at my planned social calendar and estimate how much each event will cost. Then, I put it in the Fun Stuff Pot and lock it up (more on that below), so my daily budget is only ever that — a daily budget. 

Lock it up

You can also lock your Monzo Pots, restricting access to your money for a set amount of time. You can unlock it if you really need, but having the extra step helps stop it. 

It’s another way I manage my budget. I lock my savings Pots long-term, but I lock the Fun Stuff pot until my next social event.

This stops me from taking out a fiver here and there, meaning I always have the money when bottomless brunch comes around.

Should you get one?

If you want full control of your spending habits, then I’d recommend Monzo. It’s quick and easy to set up – it took me about five minutes and my card came within two days.

Some people are sceptical about app-only banks, but I think they’re the way forward. Plus, the 24/7 customer service actually makes it a better bank than most when you have problems.

Monzo is also incredibly community-focused, taking suggestions into serious consideration with many of its features coming from customer ideas.

Have you got a Monzo card? What do you think of app-only banks? Let me know in the comments below or tweet me @amywritesthings 🐦

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UK based content creator sharing organisation hacks, budgeting tips and small space living solutions.

1 Comment

  1. This is such a great idea! I currently use Starling and have also been using their “spaces” feature which is basically like the Monzo pots. I’ve found it so great for my savings (I’ve never saved before!!) I’d love to do it like you do!

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