Goals, Direct Debits & Overdraft


#1

I just want to be clear how things work, so here’s a scenario:

  • Suppose you have a current account balance of £1,000.

  • And you’ve also squirrelled away a futher £1,000 in one of these new saving goal pots (so although the account shows £1,000 you’ve actually got £2,000 on deposit with Starling).

  • And suppose you have got a £1,000 approved overdraft.

Now, I decide I want to buy a new telly and go wandering in to town:

  1. I stop and decide to buy a new fancy-pants HD model costing £1,500. As I understand things, after that purchase my account will show an overdrawn balance of £500 (within my overdraft limit). But because I have £1,000 in my goals, I will not pay interest on that overdrawn balance as, including my savings in my goals, I am still in credit with Starling to the tune of £500.

  2. But what happens if I decide to buy a mega-sized 108” ultra-HD fancy-pants TV which costs £2,500? Will that transaction be approved? If it was, technically that would create an overdrawn balance of £1,500 on my current account but my overdraft is just £1,000. However if you factor the goal savings of £1,000, the transaction will only take you £500 in debit with Starling, which is within your approved overdraft limit.

I know this is a bit random and hypothetical, I’m just trying to understand the logic of how overdraft and saving goals work together.


#2

Oooo this is interesting…I am following this with interest.

Oh and I wouldn’t bother with the larger TV as ultra HD fancy pants is only slightly better than fancy pants HD :slight_smile:


#3

Watching with interest


#4

Wow - love a puzzle! In this circumstance, the transaction would be declined until you took the money out of your Savings Goal(s). :blush:


#5

I am starting to realise that my own banking habits, which includes 10 current accounts, four regular savers, and six credit cards, is not as complex as some with just one or two accounts.

I chose no overdraft as I don’t believe in spending money I do not have, however, I too will be watching this thread with interest.

Is the Goals feature really as complicated as some people have been making out (on other threads/posts, not this necessarily this one)?


#6

Hi Rob,

Just to clarify one thing, because your money is one account, your overall balance with Starling in the scenario is £2000, of which £1000 is locked in Goals and £1000 is shown on the homepage and is available for spending.

For #1, you’re correct. The additional point is that the definition of the £1000 in Goals would change slightly in this interim scenario. Because you are £500 in credit with Starling then you would technically be adding that £500 to a Goal and then reserving a further £500 from your overdraft to pay for your Goal when the time comes.

For #2, the transaction would be declined, as there would only be £2000 available that hadn’t been locked in a Goal (we want the money in Goals to be secure). If you wanted to make that purchase you would have to go and take £500 out of the Goal and make the purchase again. If you did that, and then made the purchase then you would have borrowed £500 from Starling (in the form of an overdraft), as you point out.

Does that make sense? We feel it’s the option that keeps your money secure, while still giving you the flexibility to access your money instantly from the app if you decide to spend money from a Goal. I also think that when you are actually using the app, the right numbers go up and down which makes it much clearer than when we’re trying to describe a hypothetical scenario.

We also want to make it easier to spend directly from a Goal, so you could save for the TV in a Goal, point your card at it in the app, and then use your card as normal.

As always, let us know what you think and if anyone wants a more in depth discussion feel free to DM me, etc.


#7

If you have £100 spending money, no overdraft and £500 in a rainy day goal, and a DD comes out for £120, would it be refused and incur charges like the cancelled transaction above? Or would you take that from a goal, because cancelling a transaction is one thing but actually being charged and having an affected credit rating and stuff is something entirely different.

Are goals completely locked away from all other transactions or is there a priority?


#8

Money in Goals are locked, so in that scenario there would not be enough available to pay the DD. I.e. Goals are completely locked.

However, there would be a notification sent in the morning saying there is not enough to pay the bill, and instructing to add money or take money from a Goal to pay it. As soon as enough money is taken then the bill would be paid immediately.

The way I would like to evolve this experience is by pointing the DD at a Goal (e.g. called Bills). That way, at the start of the month someone could lock away their bill monies in a Goal, confident they’re protected from spending. Thoughts?


#9

I like goals being completely separate. I also like not seeing them, so I disagree with the people who ask for it on the home screen. For example I’d like to start a goal saving for a house deposit. I’ll put monthly amounts in it and it can carry on in the background without me looking. A, because I like the surprise when you haven’t looked for a while. And B, because I think that some months are generally more difficult than others, but I want to cut back on those months and be more responsible, cut back on treats. If I’ve always got money in goals showing on the home screen I’ll just carry on regardless.

With regards to a bills pot…

I’ve mentioned in a few separate posts now that a bills pot seals the deal for me. I really REALLY want this feature! I don’t need any fancy algorithms guessing what my bills might be, etc. Just somewhere to separate the bills money and have DDs coming out. THE MOMENT that comes out (hopefully really soon) then I’m absolutely 100% Starling! It’s the deal breaker. The clincher. And any other phrase to mean that I really rather like the idea. :wink:


#10

Hi Ben,

Yes indeed - that makes perfect sense to me and the behaviour you describe was exactly the behaviour I was expecting and hoping for. In my mind too it is important to separate money stashed away in Goals from your everyday cash.

I realise it was a bit of a mind-bender (and sorry for that!), but it’s good to understand these things - so thanks for your reply.

Interestingly enough, what that does mean is as soon as while you have stashed away money in your Goals than you have spent on your approved overdraft, you’ll never pay a bean in overdraft charges :+1:

And love the notion of attaching your debit card (plus DDs and SOs) to a specific goal. Looking forward to that development very much.

Thanks again.


#11

I also prefer control and explicit movements by the customer over automatic movements of money. I think ‘fancy algorithms’ can be good for nudges, reminders etc, though.

I also prefer not having the Goals total on the home screen, but I’m open to the idea of making it customisable.


#12

This is the feature that would push me to closing my HSBC account. I currently have all my DD’s etc on my HSBC and set aside enough to cover them with the rest being transferred to Starling for spending…to do this in app would be great!


#13

Spending directly from a goal would be amazing.

D


#14

I am not in to program script writing, however, for the DD taken from Goals wanted feature to work, I think Starling would have to define the default name of the Goals pot dedicated for that particular function.

For example, one user puts there DD money in a Direct Debits folder, another uses Bills, a third uses DDs, and so on. How would the program know which Goal to use.

An alternative could be a toggle or Set As Default DD command, perhaps. This is what I believe @ben.chisell is suggesting too.

I know some consumers want the bank to do all the work for them, but please don’t lose grasp of the fact that it is your money and so, ultimately, it is important to continue to take some responsibility and control over its disbursement still.

I would hate to miss a Direct Debit due to a software misread.

Anyone agree?


#15

I am intrigued how direct debits, standing orders and even debit card transactions would be paid from a Goal.

I suppose technically they could add an option on the payments screen where you could choose which Goal a direct debit or standing order should be paid from. But then what happens if there’s insufficient money in that Goal to process the transaction? I would not expect Goals to go overdrawn. So maybe you’ll need to pay money into your Goal so the transaction can be processed…?

The possibilities are quite bewildering! :persevere:


#16

I agree @paulo. I think asking Starling wizards to look at things that THOUSANDS of people have bought and what their bills were before and basically GUESS what they might be next time could be begging for trouble. I don’t consider it much to transfer the amount I need into a pot. And at least I retain the “control” which is so important in budgeting…

Like you say, I wouldn’t want charges or trouble because a computer didn’t realise my son discovered a way to get round the content filter and his bill is now huge! :joy::joy: (hasn’t happened yet, but I’m sure it’s only a matter of time. :pensive: )


#17

I’m with you on this, this would be a massive USP for Starling if they could do this, and from what @ben.chisell has said is very much his thinking it too.

I’d be very pleased to see this DDs taken directly from a protected goal fund!


#18

Good feedback & questions everyone ^^

These details are currently being worked on by Ben & the team, hopefully we’ll have more details in the not to distant future! :smile:


#19

I think that it is a great idea being able to direct specific requests to specific goals. I like the example of being able to put money aside for bills knowing they are taken care of and the rest is ‘spending money’


#20

I’d really like to be able to do this.