What Is Cash Stuffing And Is It A Good Financial Plan?
Generation Z is taking a back-to-basics approach to saving money known as "cash stuffing," or the act of physically stashing cash away, due to the uncertain economic times they witnessed growing up and are coming of age in.
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Generation Z is synonymously known for social media, avocado toast, and the inability to pay for their rent and save for a mortgage in tandem. While older generations look at this generation with sympathy and minor annoyance, Generation Z has something people do not realize: perspective.
Yes, they are the first generation of children to grow up with the internet and social media and not know a life without it. But, they saw their parents and other adults live through the 2008 recession, one of the worst in history, and then a global pandemic. These events will leave a mark, and it has. Generation Z is the generation of work better, not harder, and you only have to go on TikTok to realize that.
The new trend within Generation Z is a process called “cash stuffing,” and it is as easy as it sounds. It is putting sections of your income into physical envelopes instead of different savings accounts. If this sounds like something your grandmother used to do under her mattress, it is because it is. The older generation never trusted banks, and Generation Z doesn’t either, but for another reason.
The younger generations use cash stuffing to save money away from bank institutions to try and ride the wave of inflation. Since this generation is bombarded with a range of different debts, it safeguards their money against what is an uncertain economic climate.
While the reasons for cash stuffing are due to the up-to-date global economy, the approaches are straight from war times. Most people use binders and files to separate their money, but shoes, shoe boxes, jars, and of course, mattresses are also being used to categorize their finances.
The idea behind cash stuffing is that it is only physical cash being used and that the amount spent in each category is already allocated to that specified area.
There is a range of benefits to this way of managing your finances. It breaks down a larger, seemingly more daunting, financial goal into smaller, more manageable monthly goals. While it is a simplified way of organizing your money, it does create good financial habits. Without thinking, you are reviewing your monthly budget and specific goals every month to create a realistic financial plan.
Everyone knows how easy it is to keep buying on the internet. It is a way only to spend the money you have available and not incur debt. It reduces the amount of impulse buying and general use of credit cards as you have to physically go into shops and not buy online.
There is a trade-off to physically using your money outside of financial institutions and credit cards. It will impact your credit score, impacting anyone’s ability to be granted loans or mortgages. Also, there is a chance that the money could be lost or stolen if not put in a secure place.
While there is a downside, in the harsh economic climate that Generation Z is growing up and living in, anything that might help them on the road to financial success is something worth trying. Cash stuffing worked for our grandparents; why wouldn’t it work for them?
