Self Incurred Savings Taxes


#1

Self Incurred Savings Tax’s

Whilst working on my mock ups for the Coin Filter / Roundup Feature, I had the idea of Self Incurred Tax’s.

As well as budgeting, one could place a 5%, 10% or 20% Tax on a particular Category or Merchant. If you consider Eating Out to be a particularly bad habit of yours, Tax yourself. Every time you buy food categorised as ‘Eating Out’, whatever percentage you set as your Tax is added to a Saving’s Fund.

The same could apply to income from a particular person/company such as your weekly/monthly wages. Set a Tax on it and every time you receive a payment, a percentage is safely stored away.

I’ve read similar things before and I had a wee search, but nothing too similar came up. As always, thoughts/feedback is most welcome.


#2

Great idea! I would use this feature :slight_smile:


#3

Nice idea.


#4

It’s only moving money when you spend in a category though, I get the idea, I just don’t get the need.

If the money was moved to goal or account you couldn’t immediately access then I see the benefit, but otherwise its just another way to use a goal, which isn’t really taxing your self.


#5

I like the idea. Another way to save towards a goal, and I set the rate. I don’t like the idea of not having instant access though @daedal, when I get to the target amount (or even before then if desperate) I want to access my cash without referring to anyone. I have other “locked” savings mechanisms that prevent me going overboard. R-


#6

Cheers for the feedback!

I agree to an extent, though a line must be drawn between the apps functionality and the users responsibility. Fitness apps provide functionality which help toward greater fitness, but they cannot stop you eating that cheeseburger or going down the pub instead of the gym. The onus lies with the user to work in tandem with the app. If the user doesn’t have the will or discipline to save, despite the help of the app, I don’t believe they should be forced to do so.


#7

My main concern around this would be what’s the end goal? If you want to put a tax on something like eating out, cigarettes or whatever it’s probably because you want to curb that behaviour.

So if you tax too high then maybe you’ll curb it, but you’ll not see any money in your ‘tax’ pot because you’ve stopped doing the thing, or are doing it much less.

If you tax too low then you’ll probably just continue anyway and then enjoy the 3% extra cash at the end of the month, so no habit change.


#8

Quite simply @djh, saving money.

Precisely! If you stop the bad habit you’d have no money in your “Tax Pot”…but where would it be? In your Balance! :grinning: You would have successfully deterred yourself from a bad habit and are now saving money because of it.

Even if you tax “too low”, you’re still saving money each time you indulge in your habit.

  1. You have £2.00 in your Balance.
  2. You buy a Chicken Burger for £1.00.
  3. You are Taxed 20% for “Eating Out”.
  4. Your Balance is now 80p (£2.00 - £1.20).
  5. You cannot buy another Chicken Burger.

#9

Speaking with my father just now, he came up with a splendid idea. Assigning your Taxed category to a Scheduled Payment Fund such as your Gym Membership.

Every time you Eat Out and are Taxed, that Tax goes into a fund toward your Gym Membership.

Good Job Dad!


#10

I guess the bottom line is, the use of such a feature essentially is the saving of small sums of money into pots of goals triggered by specific expenditure. I get that.

It’s a fun way of saving, whether you call it a tax or not. It would be equally fun applied in a myriad different ways.


#11

I’m all for various different methods which allows people to save money.

But I can’t help but feel a lot of these things (like coin jar), is a half way measure, and tends to avoid the main issue of money management.

We are becoming a bit of a nanny state, where we ignore the skills and habits needed for saving (and managing your finances in general), and instead, we have these “solutions” which do all of the saving for us (by looking at our spending habits etc).

So whilst it may work for some people, and there is clearly a lot who could benefit from something - I’d rather see people really analyse their spend, and work it out for themselves.


#12

What you are saying, is effectively an IFTTT integration with Goals - Similar to what Monzo has.


#13

@nickhoward Should we also eradicate life guards and let bad swimmers die off through natural selection? It’s quite a leap but it’s on the same plane. :joy:

I agree that financial management skills are not widely taught, though these “solutions”, are aids. The way you aid a child with stabilisers on a bike. One day, he/she will be able to ride unassisted. In theory at least.


#14

Haha - I think we will need Hasselhoffs for ever! :joy:

Like I said before, I’m sure it will benefit some people - I know Starling have had conversations with IFTTT in the past, but there is a security issue that is yet to be resolved.

Monzo has it, and whilst I personally don’t use it, many people do (for various different reasons).

I see a “fun” benefit to it, and “subliminal” element to this type of saving.

So I’m not saying it’s a bad thing as such, and any option which aides saving is always good.


#15

So would I @nickhoward, but we’ve all seen just how ill-prepared new-earners are for the rough and tumble of personal finance.

For so many it seems that overdrafts, savings, direct debits and getting through the month are a constant puzzle - and they need support (earlier rather than later).

In the meantime, if an app can generate some sense of order and progress into their finances, I’d say go for it.


#16

I agree to an extent.

Although given the closeness to the IFTTT integrations I’ve mentioned, I would think this “tax” would have less of an effect than the links which add money for actually doing something (running/cycling etc).


#17

Amen! :joy:

I’m all for keeping it in house at the moment. Integrating with other apps would be nice, though having a Gym fund in your Starling account that gets topped up with Fast Food taxes seems grand to me. No need for cross app support. I prefer simplicity.

I watched the Monzo/IFTTT video about integrating with other companies to do this and that and as good as it sounds, it creates a whole web of money coming in here and going out over there. At least if it’s all under one roof (Starling), it isn’t technically going anywhere, but rather being “ring fenced” until you decide to do something with it.


#18

I think IFTTT will need to be a whole lot more accessible and intuitive for the masses to gain traction.


#19

I like the idea, but I would put this very low down the list of things I’d want from Starling right now.

However, can I just say your mock ups, and general ideas which stir up good discussions are excellent!


#20

In all honesty, it’s all nonsense to me too. I’d rather just have my cash with me and do away with all these cards and banks. Cards are already somewhat flawed in that you never see your money disappear. When you spend a tenner though, you see it leaving your hand and feel that tear slide down your cheek :joy:.

All these ideas are gimmicky and weird, but like you say, they work. Same with all these fitness apps, reminding you to drink water and when to breathe lol. They are in no way necessary and may not work for everyone, but they’re there in case you do need a helping hand.

Cheers! I need to get a life :laughing: