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

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

A recent study found “cash stuffing,” where you stuff dollar bills into envelopes, binders, wine bottles or anything else, is growing in popularity with Gen Xers and millennials. Hiding dollar bills in creative places It 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, build savings and pay off debt.

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And it warms my heart.

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

A 2021 MIT study found that parting with cash at the register causes a higher level of “pain” than tapping your credit card. That’s actually a good thing. While credit cards have an intangible, “deal with it later” quality to them, when we use the almighty dollar, we pay only what we can afford, which can improve our chances. Stick to the budget.

But in our hyper-online world where digital payments are common, and nearly half of consumers are using mobile wallets like Apple Pay and Venmo to make transactions, what is involved in successfully executing a cash-only strategy? Is it possible?

A So Money podcast listener and newsletter subscriber, Ricky, recently asked: I’m having trouble sticking to a budget and I want to start filling up with cash … How do I implement an all cash budget if I have credit card balances that I need to pay off?

I’ve got some best practices (and pitfalls) for Ricky and anyone looking for a way to “cash stuff”.

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1. Develop a realistic strategy

While some extreme cash stuffers may try to pay for everything using dollar bills, it’s not possible for most of us, given how many merchants and services prefer – or require – digital payments.

Cash-stuffing works best for variable month-to-month expenses, such as food, gas or household supplies, where you have better control over personal spending.

Once you know which bills and payments you’ll use your cash for, set a plan. Understand why and how cash stuffing can enable your goals Save more money Or spending more consciously is an important first step in setting yourself up for success.

For example, if your hope is to save a certain amount each month, that means setting aside that amount in cash each time you pay in your own labeled envelope (and keeping that envelope out of sight).

Or if you want to leverage the cash stuff to get a better handle on spending, you can reserve a limited amount of cash each month for essentials like groceries and fuel and then use the rest to pay off a portion of the debt each month.

In Ricky’s case, you can technically be on a cash-only budget when Pay off credit card debt. You can either pay off your credit card balance each month at the issuer’s physical branch or ATM, or pay virtually from a checking or savings account.

2. Calculate how much cash you need each month

While this requires some tracking, it’s important to know how much cash you need on hand. I recommend reviewing past bank statements to see how much you 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 that envelope.

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

Pro tip: Hide 10% of each paycheck in a “savings” envelope so you always end the month with a surplus.

3. Leave credit

A big reason people choose to use cash is to be less dependent on credit cards to pay for expenses. And as the Federal Reserve Interest rates continue to rise To try to suppress inflation, this is a good idea Knocking off outstanding loan balances sooner rather than later.

While cash stuffing can limit the temptation to overspend in physical stores, it won’t stop you from overspending online. So if you find yourself needing to pay something digitally that would normally fall out of your cash-stuffing system, be sure to revisit your plan and adjust the expense.

Also, consider removing credit card numbers saved on your phone or on websites, which makes it easier to make purchases on a whim. Entering your card information before making a purchase requires extra time and effort which can help reduce the temptation to spend.

4. Plan to spend a lot of time shopping

When I think about how a cash-only budget affects my daily routine, it feels uncomfortable on so many levels. First, I imagine going to an ATM to withdraw cash. So, if the cash strategy is for spending, I think about showing up at the grocery store in person, which requires more time than ordering groceries online and paying with a credit card.

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A cash-only system means making more trips 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.

5. Keep your receipt

It’s important to have a paper trail of your cash purchases, especially for big-ticket items that you want to return or just have as proof of purchase. Cash transactions are not tracked online like credit purchases. Always receive a print, email or text message after purchase.

6. Know that you are closing a trade

Paying in cash can help curb your overspending and build savings while making a significant cut from your debt. But you’re also giving up some benefits.

For example, if you use a credit card and pay off the balance in full each month, you can earn points or rewards that you wouldn’t accrue if you paid with cash. You won’t even earn interest on your savings. And if you misplace your cash, there’s no way to retrieve it.

Some credit cards also offer purchase protection, which allows you to receive a refund or reimbursement if the item you purchased is stolen or accidentally damaged. If you don’t buy a warranty, buying cash won’t give you peace of mind.

Finally, deciding not to use credit cards at all can prevent you from building one Strong credit scoreWhich is important if you are looking to buy a house, rent a car or move into a new apartment.

For more money tips, check out TikTok money advice you should always ignore. Find ways to save more money with some Our favorite savings challengesAnd learn what to do if you do Can’t afford to pay off your credit card this month.


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