Things we wish we’d known about money

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We asked the Monzo team what they wish they’d known about money when they were younger – here’s what they said.

You’re not supposed to live in a student overdraft

Student overdrafts can be easy to get, and they’re often interest-free while you’re at university. But once you graduate, you’ll usually be charged interest on any money you still owe. This means your debt may grow on its own, making it harder to pay off.

What’s more, money can be tight when you first enter the ‘real world’, so repaying old debts is the last thing you want to worry about.

“I rinsed my student overdraft rather than budgeting and being frugal,” says our Content Manager, Bea. “It took me two years to pay it back after I graduated, and I still haven't gotten out of the mindset that it's okay to live outside my means.”

A fifth of us said that getting deep into a student overdraft was our biggest money mistake. We usually spent it on nights out and impulse purchases, and one team member even confessed to blowing his on a big TV.

Lesson learnt: A student overdraft can be handy for emergencies and short-term borrowing, but don’t think of it as ‘free’ money. Be aware that you’ll start paying interest at some point after you graduate, or try and pay it back before your interest-free period ends.

Everyday costs can add up quickly

Independence can be expensive. Data scientist Neal says his worst money mistake was renting a room he couldn't actually afford when factoring in monthly expenses. Meanwhile, squad captain Jim got a shock when he realised how quickly buying things like fast food can add up.

Budgeting is the best solution for avoiding stress, debt and other surprises. Beth in our Customer Operations team suggests finding a way to plan and track your spending, whether that’s using a spreadsheet, an app or a pen and a piece of paper!

Self-control is important too. “It's really easy to spend without getting much in return,” says Jacq, our COps support lead. “Impulse purchases are almost never worth it.”

Keep an eye on transactions to understand your spending patterns. “I used to get anxious about opening my banking app, and often found it easier to avoid looking at my balance altogether. Using Monzo helped me ditch bad habits,” says Bea. “My balance updates instantly, so I'm always aware of how much I've spent.”

“Constant visibility on how much you spend and make and have is crucial,” agrees Scalers analyst Ignacio.

Lesson learnt: Spend less money on impulse buys, and more time on budgeting. It’s not exactly fun, but future-you will appreciate it.

Relationships can really impact your money

Your friends, relatives and partners can affect how you manage your money – in both good and bad ways.

Asking for guidance from people you trust or finding independent sources of advice can be helpful. Natalie in our Vulnerable Customers team was having a difficult time managing her debt until her partner explained how to pay it off.

Be cautious about lending to or borrowing from people you know. Our head of people Tara remembers buying 10 festival tickets for friends, who all promised to pay her back. “They all pulled out,” she says. “It was a nightmare. Strained friendships, angry parents and a lot of overtime!”

This applies to sharing finances with your partner too. Backend engineer Chris got a joint bank account with her boyfriend, without keeping her personal account open. “We'd moved in together and it seemed like the grown up thing to do. But he spent my money freely and controlled what I could spend on,” she explains. Sharing finances with someone will link your credit report with theirs, so their spending habits could affect your credit score. “Don’t give away your financial independence,” she says.

Just remember, what works for other people may not work for you. Caroline in our Finance team says she spent a lot of time living beyond her means to keep up with friends.

Lesson learnt: Sharing finances and lending money shouldn’t be done lightly. Consider advice from people you trust, but do your own independent research and take responsibility for your own money.

The details can catch you out

When you open an account or take out credit, reading the Ts&Cs might not seem necessary. But it’s important to understand what you’re signing up for.

Tatsiana got stung by fees charged on her US bank account. Angus closed an old current account that was linked to a savings account and went from expecting to earn £125 in interest to £0.97 overall, because he had to pay a fee for closing his account early. And Jordan forgot about the interest-free credit card he got when he was at university, meaning he racked up debt when the 0% period ended.

It’s not just fees you need to pay attention to though. For example, Georgie got stuck with a savings account she could only access by visiting a branch.

Lesson learnt: Always read the Ts&Cs so you know what to expect. Keep an eye on communications from your lender too, as interest rates and other details can change over time.