- Gen Z is bringing back an old-school budgeting hack that's been newly dubbed as cash-stuffing.
- It involves putting cash into envelopes so it can be reserved for specific expenses.
Cash-stuffing is a viral TikTok trend that younger consumers have adopted to stay on top of their finances.
This concept is based on a money-saving hack known as the cash envelope system, which involves putting cash into separate envelopes so it can be reserved for specific expenses such as rent, healthcare, or groceries.
The idea is that by doing so, consumers have a better sense of where their money is going and what they have left over to spend.
Videos under the #CashStuffing hashtag have received 1.1 billion views with popular accounts dedicated to the trend like @cashstuffingfix gaining over half a million followers. Another account, @baddiesandbudgets, has over 6.8 million likes overall on videos related to cash-stuffing and budgeting.
Gen Z has overhauled this process to make it look more aesthetically pleasing with colorful dividers, envelopes, and pens to plan out their expenditures.
Financial behaviorist Blain Pearson, Ph.D., CFP previously told Insider that this process helps to relieve the stress of "mental accounting" – whereby consumers spend time worrying about unpaid bills because they're not tracking their spending properly.
It also helps to alleviate the guilt of leisure spending, especially as younger generations say they're living paycheck to paycheck amid rising costs.
Some consumers say they've even been able to pay off large sums of debt by using this system.
But it's not for everyone. Vera Kent, a 26-year-old artist based in Minnesota, told Insider's Jacob Zinkula that she quickly realized she wasn't a fan after a short period of testing this out.
The extra hassle of withdrawing cash to then make payments online seemed inconvenient to her; this seemed like an outdated method in an increasingly cashless world. Moreover, she was concerned she might become a target for thieves or pickpocketers.
"For long-term savings, it's a fun way to store money, but for daily life not so much," she said.