Did I tell you about my ex-girlfriend’s Dad?

Have you ever really managed to plan your personal finances for more than, say, the length of a holiday with your mates? We keep being told that there are so many ways to manage our money, and that technology is making financial planning for Millennials so much easier, but is it really? When I was at Uni, my girlfriend’s Dad (an accountant, no less) budgeted the whole family’s spending on a big spreadsheet every month. My girlfriend received a monthly allowance towards her living costs. At the end of the year, if the family came in under budget, he gave them all a bonus – she got £50 once to spend one January. Really bizarre – he had turned their household into a corporation. 

It didn’t work so well for me at first…

So, several years ago when I started work I thought I’d try budgeting too. I had the app for my bank account – it was the latest tech at that time – and it allowed me to see my finances in real time. But, tracking all my spending was very difficult – I just had lots of cash withdrawals on my bank statement – I had no idea what I’d spent the cash on; it always showed that I spent more every month than I earned (tell me something I don’t know!); and it didn’t help in any way to work out how to save money, because of course I had already spent it. So I literally had all of my bank data at any time of the day or night but it was of no practical use to me. I gave up on the financial planning idea after few months and went back to sneaking a look at my bank balance occasionally to see what was happening…until now.

The new wave of Apps changed everything…

I have the financial planning for Millennials bug. It all started with Revolut, the foreign currency payment card. It’s free, and I got it to avoid rip-off fees and charges from by bank card when I went on holiday. But after a while I noticed the Revolut app was telling me what I was spending my money on – transport, restaurants, groceries (I always stay Airbnb and do a bit of holiday cooking) and so on – and I could click down to see what I had spent in each category. It was useful in managing my money when I was on holiday. I loaded the card at the start of the holiday, and if the cash was going too fast I could see where and why, and manage my spending as I went along. What I also liked was that Revolut isn’t a bank: no hidden charges, no tipping unexpectedly into an unarranged overdraft, and it didn’t feel like my parents were monitoring my spending. This is one of the things I like about the new tech apps: they’re not banks, and they’re not judging me. They’re on my side.

There is a much bigger prize than keeping tabs on my holiday spending

Revolut showed me that tech could track and categorise my expenses in real time – no big spreadsheets needed. Then I started to think, could I use Revolut at home for my day-to-day spending, and then I’d have real time feedback on all my spending? I tried, but it was too messy because I have to use my bank card for some expenses and so I couldn’t put all spending through one card. I need everything in one place, on one app. I don’t have time to be adding two apps together. So I started looking around and discovered a squad of new and impressive Fintech apps and banks have opened up online whose focus is very much to provide hassle-free financial planning for Millennials. These split into the Neobanks, Financial Planning Apps and Payment Apps.

Neobanks (shhh…they’re pretending not to be banks)

The Neobanks are apps like Monzo and Starling. They have a banking licence to keep your money safe but otherwise they don’t want anyone to know they’re a bank. They’re online only, with no branches. They provide a debit card, but best of all they do all the expenses categorisation like Revolut; and even better, you can set a warning if you’re spending too much. This solves my problem of how do these financial planning for Millennials apps actually help me save money? When I set warnings on the app it helps me to slow down before month end if necessary, and it works.

The friendly apps…

So far, so good. But what if I don’t want to change bank account? It’s a hassle, and I can’t keep changing bank every time a better app is launched. Fair point – so look at the new Financial Planning Apps, Bean and Emma. These Apps plug into your existing bank account – no need to switch banks – and categorise your bank statement data just like the Neobanks do, giving you real time expense management as well. You just download the app and get started

The more serious payment apps

And lastly there’s Payment Apps, such as Monese and Revolut. They are a half-way house between Neobanks and Financial Planning Apps. You keep your cash with them but they’re not a bank; they give you a payment card, and some allow Apple Pay too, and they have all of the financial planning tools that Neobanks and Financial Planning Apps offer. But they can’t plug into your existing bank account, so you really need to use them as your main account if you want useful expense planning.

The more serious payment apps

And lastly there’s Payment Apps, such as Monese and Revolut. They are a half-way house between Neobanks and Financial Planning Apps. You keep your cash with them but they’re not a bank; they give you a payment card, and some allow Apple Pay too, and they have all of the financial planning tools that Neobanks and Financial Planning Apps offer. But they can’t plug into your existing bank account, so you really need to use them as your main account if you want useful expense planning.

Financial planning for millennials: tech really can make it work for you

So I’m now a convert that tech makes financial planning for Millennials much better. All of these providers look very similar from the outside: easy-to-use apps; they show your spending by category; you can set balance warnings; did I mention that some of them offer bill-splitting with your mates? and they’re competing on customer offers. It all adds up. The information they provide on my spending is genuinely useful; the expense and balance warnings do help me to manage my money; and the customer deals are very welcome. Best of all, it’s all done from my mobile, 24/7. And watch out for new players coming down the pipe such as B-Social and Portify.

One of these days I’d love to show my ex-girlfriend’s Dad some of these Apps, just to show him you don’t have to be an accountant to manage your expenses. But that would require me to re-connect with her, and as an Italian friend of mine once cautioned me, in matters of love: never re-heat a cold soup…

Write A Comment