How to use Monzo for easy, real life budgeting!

Is the Monzo app good for budgeting?

Over the last 5 years we’ve come to LOVE Monzo as a bank and app in our family for simple, ethical budgeting that works for our real, busy, and somewhat unorganised life. When it comes to budgeting, having a practical budgeting system that works is the difference between actually budgeting, and just spending and crossing your fingers. Monzo has become a favourite choice for thousands of people, thanks to its easy to use app, transparent fees, ethics on investing, and a unique feature called “Pots” that makes budgeting effortless. In this post, we’ll walk through why Monzo is a great bank for anyone looking to take control of their finances, how it can help as we build more sustainable, ethical and mindful life, and how its Pots feature can transform your budgeting.

Monzo: An Ethical Choice for Our Money

Beyond its great budgeting features, Monzo is an ethical bank, which is a massive deal to us and many people who want their money to reflect their values. Unlike many traditional banks, Monzo chooses not to invest in harmful industries like fossil fuels or weapons manufacturing. We LOVE that. In a time when climate change and global conflicts are pressing issues, banking with an institution that refuses to fund these industries helps ensure our money isn’t contributing to environmental damage or the arms trade. Two things that deeply matter to us. By choosing Monzo, you’re not only managing your finances but also supporting a bank that actively stands for a more sustainable and less devastating world.

How Monzo Pots Can Help Simplify Your Budgeting

Alongside basic budgeting perks like instant notifications, no hidden fees, spending breakdowns and no fees for spending abroad – the Monzo’s Pots feature is the best budgeting feature of Monzo. These “envelope” like pots are one of Monzo’s most unique and powerful budgeting tools – and we LOVE using them. Think of Pots as virtual envelopes or simple sub accounts that help you manage your money by separating it into different categories and tracking them individually. Here’s how Pots can simplify your budgeting process:

  1. Organising Your Expenses, Savings, and Bills: Instead of keeping everything in one account and not quite knowing how much you safely have for various areas of life, pots allow you to put money aside and assign it for specific purposes. For example, you could create a “Groceries” pot for food spending (our most used one!), a “Kid’s Clubs” pot, a “utilities” pot that you pay into monthly to save for quarterly or annual bills, or a “Holiday Fund” pot that you’re slowly trying to build. This way, your main account balance isn’t just money only for spending money, and your allocated funds are tucked away safely in their respective pots.
  2. Savings Goals Made Simple: Whether you’re saving for a big purchase or just want to build up an emergency fund, Pots make it easy. You can set specific goals for each pot, and Monzo will show you your progress—making it super motivating to watch your savings grow.
  3. *Our favourite* Automate Your Budget Feature: With this feature you can automate transfers into your Pots from your main personal or joint account, ensuring that every payday (or any other time) a set amount goes into each pot. This takes the guesswork out of budgeting and helps ensure you’re not overspending on other things before handling your priorities. Without thinking, you can set aside a certain amount every month for a range of different things from rent to food, clothing to Christmas saving.
  4. Pay Direct Debits from Pots: For even more control, you can set certain direct debits to be paid straight from designated Pots. For instance, if you’ve set up a “Utilities” pot and you have electricity direct debits quarterly, Monzo can take your bill payments from that specific pot, giving you a clearer view of your spending. Or if you have a “Groceries” pot, you can have a coffee subscription or school lunches pay directly out from that pot. It’s not our most used feature but I do love it for certain things.

Setting Up Your Monzo Pots

Setting up Pots is incredibly easy so let’s walk through it. Once you’re in the rhythm of it, managing your money feels second nature in a few moments here and there. Here’s a quick step-by-step:

  1. Open the Monzo App: On the main screen, you’ll see an option to “Create Pot.”
  2. Choose which account you want it linked to. This will only be an option if you have more than one.
  3. Name Your Pot: Give your pot a name like “Savings,” “Bills,” or “Holiday Fund” to suit its purpose.
  4. Choose a Pot Type: You can either choose a regular Pot or a Savings Pot (which may earn interest).
  5. Set a Goal: This step is optional. We don’t use this on our regular monthly pots. But we use it if there’s a specific, non regular goal we’re trying to hit like for a vacation or a new item we want to buy.
  6. Chose how to Money to Your Pot: Transfer a lump sum (better if you’re saving or setting money aside as a one off), or schedule a recurring transfer to automatically set money aside (best for regular saving and dividing up pay checks).
  7. Schedule regular transfers that fit your budget.
  1. Create and name your pot, add an icon picture if you want.
  2. Set a goal amount if that fits the pot.

Select how you want to add money, one pff payment or on a schedule.

Track your spending and use money from the pot!

Why Monzo Makes Budgeting Less Stressful

With Monzo’s easy-to-use interface, instant notifications, and Pots system, managing your money becomes less overwhelming and more organized – which is the key to making it happen! Instead of feeling anxious about whether you have enough for bills, groceries, or unexpected expenses, Pots help you see exactly where your money is going and what you can safely spend where. It also makes it clearly visible which can really motivate you to not spend what you don’t have allocated, or to save where you want to. It stops money from being unknown, and gives you a clear way to organise things.

Budgeting can seem like a daunting task, but Monzo’s tools are designed to make it simple. To see exactly how it works and how we use it, check out the video linked in this post and start setting up your own Pots today or get them ready for next month. You’ll be surprised how much clarity and control you can gain over your finances with just a few taps on your phone – it’s helped us SO much.

How we use Monzo in our family for easy budgeting

We actually started using Monzo for it’s simplicity. We’d been using a different ethical bank, and it was just not user friendly enough for us to make quick transfers and do what we needed to without hassle. Someone recommended Monzo, and we tried it out which you get £5/$15 for doing HERE. We each got a personal account (which we don’t use that much aside from secret Christmas and birthday spending!) and a joint account which we use for the majority of everything. We both get a notification for every joint account transaction which helps us stay aware of what’s being paid and what we’re doing financially. You can of course switch those off on your phone.

We then do have a simple spreadsheet that helps us decide how we want to divvy up our income depending on what comes in (you can see that system here but it’s not a necessary step for simple budgeting!) Then according to what we’ve decided we want to go where, we set up instant transfers each month into different pots labelled “food”, “kids’ clubs”, “utilities”, “kids, pocket money”, “mortgage”, “gift saving” and various other pots. We fully divide up our spending to allocate everything that comes in because that bring us the most peace – and relational health! – but even doing one category can be really helpful.

Mostly, we use regular monthly pots that save automatically, and we don’t set savings goals in the pots because they’re used for regular planned transfers. We do sometimes set small savings pots for things like “summer takeout spending” and then we set a goal and transfer little bits where we can if we underspend in different places. They bring us the peace of knowing that the extra spend doesn’t effect our other bills or saving. We also use the ‘direct debit from pots’ feature, so that we save from every paycheck into pots and then pay weekly/monthly/quarterly for those things without thinking.

We use the free version of Monzo which works so well. Every time you make a purchase you have transfer it out of the pot to use the money, or transfer it after which takes about 3 seconds. You can do this in the moment or reconcile it every few days. This step can be eliminated in a helpful way with the Monzo plus version for a small charge each month. Then you can pay directly from pots with a separate card for the pot – it’s really useful. The one downside of that is that it doesn’t work for join accounts yet. We decided we wanted to both have access to all the pots so we do the transfers manually where they’re not direct debits. If I was on a personal account, I probably would use the Plus version to be able to pay directly from the pot for ease!

For a more detailed visual tutorial, watch the video above and drop any questions there!

Happy budgeting!

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How to Shop Our Favourite More Sustainable + Ethical Veg Box on a Budget

Video: How Much Should You Be Spending On Food?

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