Is Monzo Good for Budgeting? Full Review
Budgeting has become a must-have money skill for anyone trying to take control of their personal finances in the UK. Whether you’re saving for a house, paying off debt, or simply trying to stop your money from disappearing before payday, having the right tools can make all the difference. One name that often comes up in UK money circles is Monzo — the bright coral bank that promises to make money management effortless.
But is Monzo really good for budgeting in 2026? Let’s take a deep look at how Monzo’s budgeting features work, what’s changed recently, and whether it’s the right fit for you.
Before we start, you can download Monzo using the button below:
What is Monzo?
Monzo is one of the UK’s most popular digital banks, founded in 2015 as part of the “challenger bank” movement. It operates mainly through its mobile app, offering clever features designed to give you greater visibility and control over your finances.
The premise is simple: Monzo’s app uses technology to help you see exactly where your money goes, plan ahead, and stay within your budget. But how well does it actually deliver on those promises?
Key Budgeting Features in Monzo (2025 Edition)
Monzo’s approach to budgeting has evolved considerably in recent years. While the core tools remain similar, 2025 brings smoother integrations, more accurate spending insights, and extra tools that make budgeting easier than ever.
Here’s what you can expect:
1. Instant Spending Notifications
Every time you use your Monzo card or set up a direct debit, you receive an instant notification. It might sound simple, but this helps you stay aware of your real-time balance, preventing the “surprise” moments that many people face at the end of the month.
2. Automatic Spending Categorisation
Monzo automatically sorts your spending into categories like groceries, bills, and eating out. You can also create custom categories if you want to tailor this to your lifestyle — a huge help for anyone following a structured budget.
For example, if you’re using the Next Steps Budget Template to track your expenses, you can match Monzo’s categories with your spreadsheet, making your monthly review much quicker.
3. Budgeting Limits and Warnings
You can set category budgets each month. The app warns you when you’re nearing your limit — and if you overspend, it flags it immediately. Monzo Plus and Premium users even get forecasting tools that predict whether they’ll hit their targets based on current spending.
4. Monzo Pots (Savings and Bills Management)
Pots are one of Monzo’s most loved features. You can create separate “pots” for rent, bills, emergency funds, or upcoming holidays. For example, you could have:
A Bills Pot that automatically receives your direct debits every payday.
A Savings Pot for your rainy-day fund.
A Christmas Pot to avoid festive overspending.
Because the money for bills is separated right away, you always know exactly how much is left to spend freely.
5. Salary Sorter
As soon as your salary arrives, Salary Sorter allows you to divide it automatically into different pots based on your priorities — bills, savings, and spending money. This eliminates the need for manual transfers and ensures you’re budgeting before you spend.
6. Trends and Insights
Monzo’s Trends section now tracks your net worth across linked accounts and helps you understand long-term spending behaviour. It’s especially useful if you’re combining Monzo with other accounts or investment apps through Open Banking.
Advantages of Using Monzo for Budgeting
Monzo’s design philosophy revolves around clarity and simplicity, making it particularly good for people new to budgeting. Here are the main pros:
User-friendly interface: Everything is laid out clearly, and actions like creating pots or checking your categories are simple.
Automatic budgeting support: You don’t have to be a spreadsheet guru — Monzo does the heavy lifting.
Great for day-to-day spending control: Instant alerts and limits help you spend intentionally rather than impulsively.
Integration with savings and investments: You can connect external accounts using Open Banking, seeing your finances in one place.
For many UK users, Monzo turns “I should really make a budget” into an actual daily habit — a big step towards better financial health.
Drawbacks and Limitations
No budgeting app is perfect, and Monzo has its limitations too.
Customisation is limited: You can’t fine-tune every detail in the same way you can with a manual tool like a budget template.
Free version has fewer insights: More powerful analytics and forecasting tools require Monzo Plus or Premium (starting from around £5 per month).
Not ideal for joint budgets: While joint accounts exist, some features are more limited compared to individual ones.
Data delays with some external accounts: Open Banking connections aren’t always instant, which can affect real-time tracking.
If you like full control and flexibility — for example, planning your income and goals months in advance — Monzo is best used alongside a more detailed system, such as a personal spreadsheet-based budget. You can use our Next Steps Budget Template to create that foundation and use Monzo as your daily tracking companion.
Expert Tip: Combine Tools for the Best Results
The smartest approach isn’t necessarily choosing one tool, but creating a system that works together. Here’s how:
Use Monzo for daily spending. Instant notifications keep your habits in check.
Log monthly summaries into your Next Steps Budget Template to review your overall progress.
Adjust categories and pots as needed to reflect your real priorities — like saving for a holiday, paying off debt, or building an emergency fund.
This hybrid approach gives you Monzo’s automation and visibility while retaining the full flexibility of a manual budgeting framework.
Who Should (and Shouldn’t) Use Monzo for Budgeting
Ideal for:
Beginners who need guidance and automation.
People paid monthly who benefit from Salary Sorter.
Those who struggle to stay on top of daily spending.
Might not suit:
Advanced budgeters who prefer detailed custom forecasts.
Users who manage shared or complex financial setups.
Anyone who dislikes app-based money management.
Final Verdict: Is Monzo Good for Budgeting in 2025?
Yes — Monzo remains one of the best budgeting tools for everyday money management in the UK. Its smart automation, instant feedback, and intuitive pots make it incredibly easy to stay organised and avoid overspending.
However, to truly master your finances, Monzo should be part of a wider system — one that includes clear goals, a structured budget, and regular reviews. Tools like the Next Steps Budget Template can help you do just that, offering a simple way to monitor your income, savings, and spending all in one place.
By combining Monzo’s day-to-day clarity with a solid budgeting plan, you’ll not only feel more in control of your money — you’ll actually be using it with purpose.
Next Step:
If you’re ready to take your budgeting beyond the basics, visit our guide on Budgeting for more practical advice and free tools to make 2025 your most financially confident year yet.
