Covid cash savers must take stock of relationship with money - expert

Former Solihull Chamber president, Kevin Johns, is urging Covid money savers to take stock of their relationship with money, as national restrictions ease and the economy starts to bounce back.

Kevin (pictured), also managing director at leading Midlands accountancy firm Prime Accountants Group, has said that the pandemic has turned many into 'saving machines ', as a result of being forced to stay inside, not pay for daily commutes, meals out or impulse shopping spending.

Although many have been able to stash cash away, Kevin says this super saving comes with its own set of risks as different swathes of the economy starts to open back up.

He said: “The pandemic has turned some people into saving machines, many for the first time in their lives. While this is incredible, it comes with its own set of risks.

“The past year has certainly highlighted how vulnerable many people are to financial shocks. So, it is extremely important they embrace what has been a golden opportunity to save and evaluate how they can continue on this trajectory for future events.

“Put your spending habits into perspective and identify what your monthly income and outgoings are. Make it a habit to set aside a definite amount every month into a savings account - even if it 's a small amount, this can go a long way in helping you out on a rainy day.

“If you 've historically found sticking to a budget challenging, make use of free budgeting apps that can help you plan better. Transfer the money into a separate bank account so that it 's out of sight and you 're not tempted to spend it. ”

He also made a clear warning to Covid-19 savers on credit card debt, urging them to clear debt in order to pay less hefty interest rates.

Kevin said: “Credit cards can be a tricky business with the extremely high interest rates in the market today. Most credit card users are highly likely to pay more interest on debts than they earn from money in savings.

“This means if you do not use your savings to pay off debts, you will likely end up paying more in interest than if you just cleared them straight away, as the longer it takes you to repay your debts, the more interest will accumulate.

“My advice to Covid-19 savers would be to use a portion of their savings to clear any credit card debt. Using cash which you already have stashed away to clear your debts will save money in the long term, as you will ultimately pay less in interest. ”