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

This story is part of So Moneyan online community dedicated to financial opportunities and advice, hosted by CNET editor Large and So Money podcast host Farnoosh Torabi.

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

A recent study finds that “cash stuffing,” where you stuff dollar bills into envelopes, wrappers, drink bottles, or just about any other way, is growing in popularity among Gen Zers and millennials. Storing dollar bills in creative places went viral on TikTok during the spring. Researchers at personal finance platform Credello 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 promote greater financial discipline than credit. I practiced this technique in my early adulthood and spent only what I carried in my wallet. Because cash has real, physical limits, I don’t spend that much. It helped me erase thousands of dollars in credit card debt in one year.

A 2021 study at MIT found that parting with cash at the register causes more “pain” than touching a credit card. This is actually a good thing. While credit cards have an intangible, “work it out later” quality, when we use the almighty dollar, we only pay for what we can afford, which can improve our odds sticking to a budget.

But in our hyper-online world, where digital payments are the norm and nearly half of consumers use mobile wallets like Apple Pay and Venmo to transact, what does a successful cash-only strategy entail? Is it possible?

So Money podcast listener and newsletter subscriber Ricky recently asked: I’m having trouble sticking to a budget and want to start doing cash… How do I implement a cash-only budget when I have a credit card balance I need to pay off?

I have some best practices (and pitfalls) for Ricky and anyone looking to get some money to save money.

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1. Develop a realistic strategy

While some extreme cash shoppers may try to pay for everything with dollar bills, that’s not possible for most of us, given how many merchants and service providers prefer or even require digital payments.

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

Once you know what bills and payments you’ll be using your money for, create a plan. Understanding why and how cash flow can help you achieve your goals save more money or spending more consciously is an important first step in setting yourself up for success.

For example, if you’re hoping to save a certain amount each month, that might mean putting that amount away in cash every time you get paid in your own stamped envelope (and putting the envelope out of sight).

Or, if you’re looking to raise cash to better manage your spending, you can set aside a limited amount of cash each month for essentials like groceries and fuel, then use the remainder to pay off your debt each month.

In Ricky’s case, you can technically only use cash pay off credit card debt. You could pay off credit card balances each month at the issuer’s physical branch or ATM, or pay virtually from a checking or savings account.

2. Calculate how much money you need each month

Although this requires some tracking, it is very important to know how much money you will need. I recommend reviewing past 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 appropriate envelope.

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Keep in mind that unlike variable expenses, many fixed monthly expenses like rent or mortgage, credit card balances, loans, or even a Netflix account often require some type of online payment.

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

3. Pay off the loan

One of the main reasons people choose to use cash is to rely less on credit cards to pay for expenses. And as the Federal Reserve continues to raise interest rates to try to contain inflation, it’s a good idea knock down outstanding debt balances sooner rather than later.

While carrying cash can limit the temptation to overspend in brick-and-mortar stores, it can’t prevent you from overspending online. So if you find yourself paying for something digitally that would normally come from your cash filling system, be sure to review your plan and reconcile your expenses.

Also consider removing credit card numbers stored on your phone or on websites that make purchases too easy. Entering your card information before making a purchase takes extra 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 seems uncomfortable on several levels. First, I imagine going to an ATM to withdraw cash. Then, if the cash strategy involves spending, I’m thinking of going to the grocery store in person, which takes more time than ordering groceries online and paying with a credit card.

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A cash-only system means more trips and a move away from the instant purchase model that many of us were used to during the pandemic. And that’s not a bad thing—it’s just something to plan for.

5. Save the receipts

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

6. Know that you are compromising

Paying cash can help curb overspending and build savings while significantly reducing debt. But you also give up some benefits.

For example, if you use a credit card and pay the balance in full each month, you can earn points or rewards that you won’t earn if you pay with cash. You also don’t earn interest on your savings. And if you misplace your money, there is no way to get it back.

Some credit cards also offer purchase protection, which allows you to get a refund or a refund if the purchased item is stolen or accidentally damaged. Unless you’re buying a warranty, buying cash won’t give you the same peace of mind.

Finally, by deciding not to use credit cards in any way, you could be preventing yourself from creating a strong credit ratingwhich is very important if you want to buy a house, rent a car or even move to a new apartment.

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

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