Cash stuffing is a trendy new way to save and spend money using cash instead of debit and credit cards. It is a saving strategy that would shock our ancestors of the 20th and 19th centuries. And if you detect a little sarcasm in this sentence, you will not be wrong.
Money stuffing is a buzz term, popular with Gen Z – those born between 1997 and 2012 – and popularized on social media sites like TikTok. But the concept is not new.
So if you’re not sure what the money-stuffing craze is, wondering if it works and whether you should try it, consider this your crash course in money-stuffing. silver.
What is cash stuffing?
The most popular version of cash stuffing is to put cash in envelopes, with each envelope assigned to an expense category. The money for races goes in one envelope, utilities in another and so on. This way you always know you have money for certain segments of your budget.
But not everyone on TikTok and Instagram is putting money in envelopes. Some people create a money stuffing workbook as average budget. Others put money in glass bottles until they need money for an emergency or impulse purchases, then they break the glass. You can put money in old shoes, mason jars, coffee mugs, or go really old-fashioned and put it under your mattress.
In other words, how you play the money game is up to you – and it’s just a fun way to help you budget or save some money.
Lyle Solomon, a consumer credit attorney and senior attorney for Oak View Law Group in Auburn, Calif., said he did some form of money cramming in his early adulthood when he was low on income.
“I had to keep track of every penny to break even at the end of each month, and this method proved useful,” says Solomon. “So cash stuffing may be trendy now, but the method itself is old, and I can say it’s really effective.”
Why does Gen Z love cash?
Of course, this is a generalization. Some Gen Zers may hate the cash stuffing, and for some people who like budget calendars and budgeting apps it may not be very helpful. But as noted, the cash stuffing has spilled over to social media sites that Gen Z use a lot, like TikTok and Instagram.
As for its appeal to Gen Z and all generations, cash stuffing may be just what the accountant ordered for those who like to handle cash. Real money is touch. You can count and hold. If you have multiple numbers in a bank account, you can touch your phone or laptop screen, but that’s about it. Your money can feel more real when you hold paper bills.
Solomon says stuffing cash can be a great way to budget and spend money “because it helps curb compulsive spending and accumulate credit card debt. The method also takes the stress out of mental accounting because you know where your money is going and your bills have been paid,” says Solomon. “So for Gen Z, cramming cash is a great method to build good financial habits that they can stick with for the rest of their lives, even as they switch to digital-first payment methods and start to use credit cards.”
COVID-19 is likely another reason the cash stuffing has spread. The pandemic has taught many people get creative with their spending and budgeting. Supply chain issues and inflation have also made people watch their money. After all, rising prices can cause money to disappear from a bank account even faster. Cash stuffing forces people to pay close attention to the cash they have, an important feature in these times of inflation.
The pros and cons of cash prank
Before you empty your bank account and adopt cash stuffing as a way to budget, you’ll want to consider the pros and cons.
In a nutshell, the benefits of cash stuffing include:
- Better organization. Withdrawing money from a bank account and putting it in envelopes or a filing cabinet can be an effective way to ensure your money goes where it’s intended – and not to something else. If you have money in an envelope or binder marked “groceries,” you’ll probably use the money for food and not for anything else.
- More time spent on budgeting. You could say that the banks have made budgeting too easy. When you automate all or most of your monthly bills, you don’t really think about where your money is going. If you spend each month dividing your money into compartments, like putting it in envelopes or creating a money-filling binder, you’ll think more critically about where your money is going. Maybe you’ll wonder if an insurance bill is too high or if your grocery bill is too low, and you’ll start making comparisons or readjusting your spending.
- Potentially less stress. If you are more organized with your money and know that you are not likely to overspend with your money-stuffing system, you should feel less anxious.
But there are a few downsides associated with cash stuffing, including:
- Your money is less protected. If you had a fire, all that money – hidden in bottles, filing cabinets, shoes, envelopes, crevices in your house – would go up in smoke. (A typical home insurance policy only covers a few hundred dollars in cash that burns in a fire.) Your home could be burglarized. If a cybercriminal manages to steal your money from a bank account, you are insured and will get your money back. If someone runs away with your money from your home, the police may or may not be able to find your money, although your home insurance may cover some of the loss.
- More time spent on budgeting. Yes, we’ve listed that as a positive, but it’s also a negative. There’s a reason people automate invoices. This makes it easier to pay bills and reduces the risk of missing a payment.
- The world is digital. Cash stuffing can work very well for purchases such as groceries or buying clothes at a department store, where you will almost certainly encounter a cashier who will readily accept your cash. But you might find it next to impossible or just not worth putting money in an envelope every month to pay your rent, utilities, streaming services, and other entities that prefer to receive digital payments with a debit or credit card.
- There is no interest when you hoard money. For years, you might say putting money in a savings account wasn’t worth the time and effort because of the little interest earned. But with some savings accounts offering 3% or more, stuffing the money can mean you lose potentially significant interest. On the other hand, if you are interested in stuffing money to save money in a way that an interest-bearing savings account doesn’t, you’re probably better off stuffing yourself with cash.
If you like the idea of money stuffing, the best way to approach it is to start slowly. Use it as a way to split money for certain bills or for additional savings. (And then, if you like stuffing cash, you can always make it something you do for all your bills.)
Kat Goegan says she uses stuffing money as a savings tool. take. She is the office administrator of At Your Service, a tax and money transfer business in Hamilton, Ontario.
“I had no idea what I was doing had such a trendy name,” she says. She and her husband have a bank account for bills, but when she realized she often spent money a little too lightly, she started hiding money in what she calls it the “secret hideout”.
“I started with a set amount for each pay (period) — $10 to $20. It wasn’t a lot per month, but it was off the grid and safe from me,” Goegan says. over time, she slowly increased the amount of money she pocketed.
“We also have a little savings, but it helps me a lot emotionally in this current economy to have
a safety net for our safety net,” says Goegan.
Which means Goegan’s approach to money-stuffing serves its purpose. The main goal of cash stuffing is to create good and healthy financial habits by budgeting better and ensuring you have a safety net. Stuffing cash may not be new, but if done right, it can help solve the very old problem of being broke.