How Moneybox helped me painlessly save and invest £722.50 in 15 months

This is a follow up to an earlier post I wrote called How you can save money effortlessly using Monzo, Marcus by Goldman Sachs, and Moneybox and an update to how the Moneybox part is doing.

How Moneybox helped me painlessly save and invest £722.50 in 15 months

Automatic equals painless

Ramit Sethi is all about having systems in place so that you don’t have to use your willpower. Because willpower is fickle and it gets exhausted and it doesn’t always work.

Systems on the other hand do work. Such as setting up automatic payments to come out of your account straight after pay day to go into your savings account or into your investment account. This way you don’t even think about it. This is how I’ve set up my Marcus savings account and my Hargreaves Lansdown ISA. It comes out of my account and automatically saves and invests for me. I don’t have to think about it and I don’t have to remember to manually make the transfer or the investment.

What is Moneybox?

Moneybox is a mobile app that I started using in February 2019 and it’s designed to make saving and investing super simple and painless. I use the iOS version.

How does Moneybox work?

In the Moneybox app, you connect your bank accounts that you spend money with eg. Monzo or HSBC as I use. You decide to round up transactions to the nearest pound or two pounds (as I’ve started to do). So let’s say you have a transaction for a coffee at £2.50. You could choose to round it up to the nearest pound (£3.00). Your Monzo account would show a £2.50 to the coffee shop, whilst the 50p round-up would be added to the Moneybox weekly pot. (50p might not sound like a lot but it all adds up. Like my mum used to say, watch the pennies, watch the pounds.)

Once a week the amount in the Moneybox weekly pot is taken from your chosen bank account (with which you’ve set up a direct debit). For me, it’s generally about £10 to £20 that’s built up over the week and this is swept from my HSBC account to Moneybox who then invest it in a Stocks and Shares ISA according to your chosen risk appetite in a simple mix of funds.

(The choice of mix of funds is Cautious, Balanced, and Adventurous, where Cautious has the least equity funds and more bond funds, and Adventurous has the highest allocation of equity funds. Mine is in the Balanced mix, which is 65% global equities, 10% global property shares and 25% corporate bonds.)

You can also ‘boost’ your savings with Moneybox through one-off injections of £10, £20 etc. The app shows you how that can positively impact your total savings and investments over a longer time horizon.

How much have I saved and invested through the app?

As of today (26th May 2020), I’ve got a grand total of £722.50 in the ‘balanced’ mix of funds. I’m chuffed to bits with that because it was easy. I didn’t even have to think about it. It was almost literally made up of the loose change in my pocket.

What’s been my return on my investment?

As at 26th May 2020, £1.50! That’s 0.21%! Not great I know 🙂 but remember we have just had a big correction in equity markets due to the Coronavirus pandemic, and we’re in this for the longer term. It was a negative return for a while during March and April 2020.

Would I recommend Moneybox?

Absolutely! It’s genuinely painless. I don’t even think about it anymore. The app is easy to use and the act of ’rounding up’ and ‘boosting’ your weekly pot is fun and almost delightful. It’s a well-designed app.

If you struggle with saving and investing, if maybe you don’t have the discipline to manually save and invest each month or just regularly, then this type of app/system could be what you’re looking for.

Check out Moneybox here!

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