How Covid is changing the way we spend and save

Goodbye bad habits, hello savvy spending (and saving). With so many of us stuck at home, we’ve turned online in our droves – and there’s never been so many financial tools at our fingertips to help us kick poor habits and become budgeting buffs and smart savers. The boom in money-management apps means we can easily be more conscious of what we’re splashing our cash on, with many managing to save more money than ever.

One of the biggest trends has been ‘jam jar’ accounts. You simply divvy up your income into different pots for different expenses – a great way to master your Moneyverse.

Or take spending: how wild is your weekly spend on takeaway coffee? Can you actually afford those new trainers? And could you save more each month? Whatever you’re looking to get a grip on, there’s increasingly an app to guide you while our own can help you monitor your money, including the stores you spend the most in (and when) and a balance tracker.

Even everyday expenses like splitting the bill in a café or sharing council tax costs with housemates can now be sorted with just a few taps. And budgeting online has never been easier, with more tools and tips to stay in control.

Have you been scouting online for second-hand clothes? Hunting for discount codes? Doing your best to mend and recycle? If so, you’re in good company. For many, the pandemic has triggered a reset of personal values that’s ushered in what’s been dubbed a great ‘shift to thrift’. This fresh focus is on recycling, reusing items and seeking better value. In a nutshell, more of us want to spend less and get more: seven out of 10 are actively bargain-hunting.

As well as personal financial circumstances, this return to frugality is often driven by concern for the environment. And for some, it’s also simply fun. Grabbing a bargain always feels like a win – especially when you’ve got a new-to-you pair of shoes to show for it. Might these old-fashioned habits – ones instilled by many of our grandparents’ generation - lead to a better financial future? Let’s hope so.

With so much extra time online, many of us have had our heads turned by fantastical get-rich-quick schemes. The pandemic has created a huge opportunity for scammers, especially on social media. You might have seen them showing off big wads of cash as they tout schemes flogging everything from Forex (foreign exchange) trading to crypto. They might also deploy bogus celebrity endorsements to lure you in. And with it comes their promise you can earn thousands every month for doing next to nothing. All you’ve got to do is pay a small sum to sign up and the secrets to success will be yours. Easy, right? Of course not. Sadly too many still fall victim with a sharp rise in people being taken for a ride. So, how to spot the scammers? First, the golden rule – if it sounds too good to be true, it probably is. Second, check whether the trader or scheme that’s caught your eye is accredited by the Financial Conduct Authority. If they’re not, steer clear. And keep on top of our guidance so you can recognise the latest fraud and scam trends. 

Investing – does it intrigue or intimidate you? If you’re a newbie to stock markets, it may be a bit of both but whatever you might feel, you’re not alone. For those able to save a bit more than usual during the pandemic, now could be the time to consider putting some of it on the stock markets. Nine months into the pandemic, a survey charted a rise in female and young first-time investors – an indicator of a growing appetite for investment as a way to help your money work harder.

It can’t be emphasised enough that any investment you might make carries risk – it can fall in value as well as rise, that’s its very nature. But there are lots of established, legitimate ways to invest, and if you want to learn the ropes, take a look at our Barclays Smart Investor platform. It’ll help you figure out what type of investor you might be, how much risk you’re comfortable with, and learn about the different funds you could put money into.

Investing’s not for everyone and if you don’t fancy it, that’s fine too. Why not check out smart ways to save instead? If you want to build up enough for a house deposit, a Lifetime ISA – with its 25% top-up from the Government - could be a really good place to start. Find out more about this and all the different types of savings accounts you can get.

Social media’s magic for memes, selfies and cute cat photos. But what about financial advice? In this era of the ‘finfluencer’, would-be financial gurus continue to flock to TikTok, Instagram and YouTube to impart their wisdom and build their following. Some can be brilliant resources – the best can make tricky financial concepts much easier to understand.

But not everyone’s in it for the right reasons. As well as budgeting tips and explainers on Bitcoin, you’ll also find some pushing particular financial products and strategies – especially high-risk cryptocurrencies. Be very wary of those who do. Ask yourself: might they be getting paid to promote this, and are they upfront about it? Do they have proven experience and qualifications? And if they really had money-spinning strategies, would they give them away on social media? These types of questions will help you know when to hit ‘unfollow’. 

When was the last time you said ‘keep the change’? It’s been a swift shift from notes and coins to ‘apps and taps’. Cash use fell by 35% in 2020, while contactless payments rose by 12%. Digital payments have been on the up for some time, but the pandemic has pushed the trend forward.

Of course carrying just a card or smartphone is convenient, fuss-free and keeps our pockets light. But there can be a downside. Psychology experiments have suggested some tend to spend more when they pay online instead of in cash. Handing over money is psychologically painful, the theory goes, but tapping a card doesn’t feel as real as parting with notes and coins.

How to tackle this, apart from bags of self-control? One answer, counterintuitively, could be more tech. If you find it all too easy to splurge with contactless and online shopping, money-tracking apps including our own could help you keep a close eye on things. Watch what you’re spending and where e.g. on food, travel or bills, and see which retailers you give the most to. Once this becomes second nature, it should get easier to get a handle on wayward spending and help build better habits for the future. 

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