Digital Budgeting Tools Increase as Holiday Cost-Cutting Sweeps Across Europe

As inflation bites, European consumers are turning to cost-cutting tools and techniques this holiday season.

In fact in the U.K., a poll by Accenture found that 70% of all adults are planning to cut back on festive spending this year, while about 49% said they were looking to cut back on gifts, 46% on eating out, and 35% on socializing and food and drink at home.

To help consumers rein in their holiday expenses, neobanks like Bunq have been rolling out budgeting tools that allow Europeans to ring-fence money in separate sub-accounts, for example.

As the firm’s CEO Ali Niknam explained to PYMNTS, the tool helps users set different budgets for categories such as groceries, housing and car expenses, after which Bunq automatically detects which budget a given payment belongs to and assigns funds from the correct sub-account.

Related: Digital Budgeting Tools Are Inflation Era Lifeline for Millennials and Gen Zs

Niknam added that “people should have tools to easily identify what they’re spending their money on […] so that they can cut away anything that is not important enough for them to keep.”

Other digital-first challenger banks such as Monzo, Revolut and Starling all have their own budgeting tools to help customers manage their money more effectively.

Related: Revolut’s ‘Pockets’ Tool Aims To Help People Organize Payments

Like Bunq, these neobanks approaches to cost-cutting are built around allocating a set budget to different spending categories to help consumers stay on top of their expenses and gain better insight into where their money goes.

For example, earlier this month, Starling introduced virtual cards for its current account customers to give them more control over their spending.

Each virtual card is linked to a “Saving Space” in the Starling app, instead of the user’s main account balance. Starling customers are able to choose from which Space they spend, allowing them to set separate budgets for travel, groceries, etc. When one Space runs out of funds, the virtual card declines a transaction instead of dipping into the customer’s main balance.

The neobank has also redesigned its “Spending Insights” feature to give users a clearer picture of their finances. Starling customers can analyze their spending from specific Spaces and during custom date ranges, allowing them to use the app’s interactive graphs to help them better understand their spending patterns.

Budgeting Tools for All Ages

With Europe’s cost of living crisis affecting all generations, digital budgeting tools need to be able to appeal to different age ranges.

For older generations, FinTechs like Moneyhub have developed dashboards to help pensioners view and manage all of their pensions in a single place.

For example, the company has partnered with the U.K. pensions provider Standard Life to create a digital financial wellness product for its customers.

To further build on that relationship, it was recently announced that Standard Life’s owner, Phoenix Group, has invested £15 million in Moneyhub to become a minority stakeholder.

In a press release announcing the funding, Moneyhub said it will continue to provide Standard Life “more tailored, customer-centric services through consumer-driven data and open banking payments.”

For all PYMNTS EMEA coverage, subscribe to the daily EMEA Newsletter.