Stuart recently joined as Head of Financial Difficulties at Monzo. One area he is focusing on is helping our customers meet their financial goals and avoid the stress of financial difficulties.
I’ve been lucky enough not to face any real financial hardship but I’ve met a lot of people who have, especially in a previous role at a Citizens Advice Bureau giving advice to people struggling with debt. For many people I met, budgeting had come too late and it took more formal advice to help turn things around. However, introducing a budgeting plan is still a crucial step in turning a corner and often it would have helped prevent difficulties in the first place (and many of the negative effects on people’s well-being).
The ‘Changing Household Budgets’ report published by the Money Advice Trust highlights some of the difficulties facing households throughout the UK and how many families’ weekly budgets are increasingly stretched. When we start lending, no matter how smart our decisions to lend are - we will inevitably get some people who struggle to pay us back. Largely this will be because of uncontrollable life events, such as losing a job or ill health, while at times it will be down to poor money management. Sometimes it might be a combination of the two.
It’s our responsibility to provide the best support possible for all of these customers. As a start, we won’t punish people with excess fees when they exceed their limits and we plan to use data to pre-empt difficulties before they happen. This will allow us to refer customers to free sources of advice early on, and of course promote features of the app that could help or provide information on budgeting.
I’ve found the ‘Targets’ feature in the app a fantastic aid to help with planning ahead and setting budgets - the categorisation of expenditure and live updates allow me to stay on top of what I am spending in an unprecedented way and I hope this will be the same for many others. Whilst these are all useful tools, I still think there is a lot of room for more traditional budgeting advice in helping customers change how they think about money. But giving budgeting information in a useful, readable format - through a medium which works and isn’t patronising - is not an easy task. There is lots of great information on budgeting out there, for example, the Money Advice Service website - but in my experience the people that really need this advice only look for it when it’s too late.
So I want to build a resource that provides information on budgeting to help customers improve their money management, which isn’t just for those who are struggling to manage their money. I’m hoping your feedback will help me expand and build on this idea. For instance, I’m not sure how useful it is for me to bang on about how you should eat out less, get less coffees or change utility suppliers (although you should do all these and I will keep mentioning them!), but maybe the focus could be on changing people’s mindsets and the way they think about money? What do you think would be most helpful?
I’ve written a list of my top 5 budgeting tips in the community forum to kick off the discussion on what sort of advice or resources you might find valuable. The below is not an exhaustive list of tips and advice - it’s largely based on my own personal experiences, which is where I believe some of the most relevant solutions are born! I’d be really interested to hear your suggestions around managing money better, along with ideas and feedback on the most effective way to present information like this… All comments are most welcome!