Cash Stuffing: Why This Viral Gen Z Trend Is Gaining Popularity

This story belongs That’s how Moneyan online community dedicated to financial empowerment and advice, led by CNET Editor at Large and So Money podcast host Farnoosh Torabi.

Have you heard about the “cash stuffing” trend that has taken TikTok by storm?

A recent study found “cash stuffing,” where you put dollar bills in envelopes, paper clips, liquor bottles or just about anything, is growing in popularity with Gen Zers and millennials. The act of storing dollar bills in creative places went viral on TikTok during the spring. Researchers at Credello, a personal finance platform, found that more than half of young adults regularly use cash to manage their money, save and pay off debt.

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And it warms my heart.

As a personal finance expert and parent, I know firsthand how using cash can encourage more financial discipline than credit. I practiced this technique in adulthood and only spent what I carried in my wallet. Because cash has real, physical limits, I didn’t spend too much. It helped me wipe out thousands of dollars in credit card debt in a matter of a year.

A 2021 MIT study found that parting with cash at the register versus hitting your credit card causes a higher degree of “pain.” That is actually a good thing. While credit cards have an intangible, “deal with it later” qualities, when we use the almighty dollar, we only pay for what we can afford, which can improve our chances of. stick to a budget.

But in our hyper-online world where digital payments are the norm, and nearly half of consumers are using mobile wallets like Apple Pay and Venmo to transact, what’s involved in successfully carrying out a cash-only strategy? ? Is it possible?

So Money podcast listener and newsletter subscriber, Ricky, recently asked: I’m having trouble keeping a budget and I’d like to start putting cash… How do I implement an all-cash budget if I have a credit card balance I need to pay?

I have some best practices (and pitfalls) for Ricky and anyone looking to “cash things” their way into savings.

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1. Develop a realistic strategy

While some cash extremes may try to pay for everything using dollar bills, this is not possible for most of us, considering how many merchants and services prefer – or even require – digital payments.

Top up cash works best for variable monthly expenses, such as food, gas or household supplies, where you can exercise better control over personal spending.

Once you know what bills and payments you’ll be using your cash for, set up a plan. Understand why and how cash can enable your goals either save more money or spending more awareness is an important first step in setting yourself up for success.

For example, if your hope is to save a certain amount each month, this might mean putting that amount aside in cash every time you get paid in its own marked envelope (and putting that envelope out of sight). .

Or if you want to stretch cash to get a better handle on spending, you could set aside a limited amount of cash each month for essentials like groceries and gas and use the rest to pay off a small amount of debt each month. .

In Ricky’s case, you may technically be on a cash only budget pay off credit card debt. You could either pay your monthly credit card balance at the company’s physical branch or ATM, or pay normally into a checking or savings account.

2. Calculate how much money you need every month

While this requires some tracking, knowing how much cash you will need on hand is important. I recommend reviewing recent bank statements to see how much you tend to spend in each variable category, such as groceries, gas, utilities, clothing and entertainment. From there, commit to a spending limit or savings goal and allocate that amount to the corresponding envelope.

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Note that unlike variable expenses, many fixed monthly expenses, such as rent or mortgage, credit card balances, loans or even a Netflix account, often require some form of online payment.

Pro tip: Put 10% of each paycheck in a “savings” envelope to make sure you always end the month with extra.

3. Leave credit

One of the big reasons people choose to use cash is to rely less on credit cards to pay for expenses. And as the Federal Reserve keep raising interest rates to try to tighten on inflation, it is a good idea break down outstanding debt balances sooner rather than later.

While cash can limit the temptation to overspend in physical stores, it cannot prevent you from overspending online. So if you find yourself needing to pay for something digital that would normally come out of your cash system, make sure you review your plan and reconcile the expense.

Also, consider removing credit card numbers saved on your phone or on websites, making it too easy to buy on a whim. Having to enter your card information before making a purchase takes more time and effort which can help reduce the temptation to spend.

4. Plan to spend more time shopping

When I think about how a cash-only budget would affect my daily routine, it feels inconvenient on many levels. First, I imagine going to an ATM to withdraw cash. Then, if the cash strategy is for spending, I think about showing up to a grocery store in person, which requires more time than ordering supplies online and paying by credit card.

A cash-only system means more travel and moving away from the instant purchase model that many of us have become accustomed to during the pandemic. And that’s not a bad thing – it’s just something to plan for.

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5. Keep your receipts

It’s important to have a paper trail of your cash purchases, especially for big-ticket items that you may want to return or just have as proof of purchase. Cash transactions do not get online tracking like credit purchases. Always get a receipt printed, emailed or texted to you after a purchase.

6. Know that you are making an exchange

Paying in cash can help you reduce your expenses and save while taking a big hit from your debt. But you’re also giving up some benefits.

For example, if you use a credit card and pay off the full balance each month, you can earn points or rewards that you won’t accrue when you pay with cash. You also do not earn interest on your savings. But if you lose your cash, there is no way to recover it.

Some credit cards also offer purchase protection, which allows you to receive a refund or refund if the item you purchased is stolen or accidentally damaged. Unless you buy a guarantee, buying in cash will not give you the same peace of mind.

Finally, deciding not to use credit cards in any form can prevent you from building a solid credit scorewhich is important if you are looking to buy a house, lease a car or even move into a new apartment.

For more money tips, check out TikTok money advice you should always avoid. Find ways to save more money with some of the our favorite savings challengesand learn what to do if you can’t afford to pay off your credit card this month.


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