Despite living in an increasingly digital environment, younger generations are reverting to techniques like cash stuffing to limit their spending | Picture: iStock
Contrary to popular belief, young people aren’t all spendthrifts. While wallets are currently being hit hard by price increases due to inflation, some members of Gen Z are adopting the “cash stuffing” technique to better manage their expenses. The practice is particularly in vogue on their preferred social network, TikTok.
Low salaries, meager savings, lack of knowledge when it comes to managing a budget… People under 30 often struggle to finish the month without going into overdraft.
These financial difficulties are a major source of concern for young generations: nearly 30% of millennials and Zoomers fear running out of money, according to a recent report by Deloitte.
While older generations tend to consider money as a taboo subject, 18-35-year-olds are keen on educating themselves in order to better manage their budget.
But don’t expect them to seek advice from their bank counsellor. Many are heading to TikTok to learn how to consume less and save more.
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One method is particularly popular on the social network for better controlling your spending: “cash stuffing.”
This savings strategy consists of dividing a fixed amount of money into different envelopes each month. Each of them is dedicated to a specific category of expenses, such as; housing, food, transportation and even leisure and outings.
The goal of this approach is to limit card payments and online shopping.
@baddiesandbudgets #cashstuffing #cashstuffingenvelopes #budgetbinder #baddiesandbudgets #cashenvelopemethod #cashenvelopes #payingbills ♬ Running Up That Hill (A Deal With God) – Kate Bush
The reasoning behind this approach can be found in numerous studies that have shown that people tend to spend more when they use a credit card. Researchers from Stanford University, MIT, and Carnegie Mellon discovered in 2007 that the process of paying causes physical pain. This sensation is less intense when using a bank card instead of cash.
‘Cash stuffing’ encourages young TikTok users to go through this pain by paying with cash, precisely in order to limit the money that enters and leaves their bank account. And it seems that this trend has found favor on the platform: the hashtag #cashstuffing counts nearly 539 million views on the social network.
It’s a trick that sounds like it’s straight out of a grandmother’s playbook, but many of those who have tried it boast of having made substantial savings by dividing their cash into small packets. Twenty-three year old Laura Castellanos, better known under the pseudonym @abundantgains, claims to have managed to save $20,000 in just over a year thanks to this method.
@abundantgains And I’m done with my cash stuffing for my first paycheck!
♬ original sound – AbundantGains
While apps like Goodbudget and Digit offer to monitor our budget allocation for us, proponents of cash stuffing say that paying with cash prevents unpleasant surprises.
“When we’re using cash, we are taking control of our money instead of it controlling us,” Laura Castellanos told Bloomberg.
When will the piggy bank of our childhood make its comeback?
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