Personal Finance when I first left University: 1. Receive income and escape overdraft. 2. Spend indiscriminately for the first week. 3. Check my bank account 3 weeks in and realise I'm back in my overdraft again. 4. Literally stop going out as I can't afford a beer.
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Personal Finance in my thirties: 1. Receive income that is automatically sorted (thanks
@monzo!) into separate pots for my fixed costs (Rent, Bills, etc). 2. Multiple AI savings accounts that automatically and steadily extract money during a month (@withplum,@Get_Chip).1 reply 0 retweets 3 likesShow this thread -
3. All accounts managed with a single app (
@emma_finance). Abuse of the custom "Loans" feature as a way of making large future costs explicit - for example, I am self-employed, so use a 'Self Assessment Tax' "loan" to make it explicit that I owe tax.1 reply 0 retweets 2 likesShow this thread -
4. Use of
@monzo 'Fixed Savings Pots' to both lock money away temporarily for these large future costs and earn interest while doing so. 5. Use of@monzo 'Early Access Savings Pots' with goal amounts setup for costs that I want to have amortized over multiple months.1 reply 0 retweets 1 likeShow this thread -
Basically, I've automated financial responsibility. I've written this up because I don't know how many people are aware that this is possible now. Part of the work is manual: you need to look at your repeating fixed costs and then setup financial pots that will handle these.
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There are manual ways of achieving the same thing (manually moving rent/bills money into a separate account, etc), but Monzo makes it much easier to do this automatically because of the salary sorting feature and the ability to assign bills (and other direct debits) to pots.
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This could be improved with better ways of seeing repeated costs (e.g. annual coffee expenditures), and then improving the assign bills feature by combining category budgets with pots and allowing transactions other than direct debits to be paid from these.
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It turns out I had just inadvertently reinvented @ynab's "Four Rules" without realising.
A very worthwhile read if you haven't read it already:https://www.youneedabudget.com/the-four-rules/
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