As news of soaring petrol prices made headlines, Yasmine Camilla saw her energy bill double “almost overnight”. Filling the tank now costs 30-40% more, she says.
But this rise in the cost of living is something she would never have noticed eight months ago.
“I always filled up my car when I needed gas,” said the 36-year-old, based in London, England.
“I would just think, well, [the payment] will pass because my debt was on credit cards and I still had money in the bank. But the detriment would always be that my bank money would run out and then I would start using credit cards,” she told CNBC Make It.
At one point, she said she had 10 debit and credit cards in total — and was $50,000 in debt.
Today, his spending habits paint a different story.
After realizing that energy and gas prices had skyrocketed, she began putting aside more money each month. Instead of paying with a debit or credit card, she now only pays in cash.
Videos under the #cashstuffing hashtag garnered over 360 million views on Wednesday.
“When I fill up my car with gas, rather [than] fill up and then pay the amount in my car, I fill up according to the money I have…it’s more controlled and planned,” said the TikTok Creator mentioned.
“I may decide to cut my budget somewhere else, maybe slow down my savings for now until I get a raise.”
The videos mostly feature colorful, personalized cash binders with labeled compartments for different categories — such as rent, food, savings, and sinking funds.
Yasmine started stuffing money in September. She said it helped her pay attention to every expense and limit spending. She claimed it even managed to help her clear her debt in five months and accumulate savings – something Yasmine said she had “never, ever” had in her life.
How “cash stuffing” works
The concept is not new. The silver stuffing is similar to the budget envelope system.
Tania Brown, Certified Financial Planner and Financial Coach at SaverLife, explains it this way.
“Before there were banks and ATMs, people paid cash. They put what they owed in envelopes, labeled what they had to pay,” she said. “It’s a fairly old concept, which has just been revived.”
With rising recession risks and rising inflation, it’s no surprise people need to “get their spending under control more than ever,” Brown said.
“Before, you could go a little over budget and be fine. But with everything going up and over budget… the importance of sticking to a strict budget is more important.”
Also, a budget is no longer a budget you can “set and forget,” she added.
“Depending on where you live, every week you have to revise your budget, because the prices are increasing enormously. The most important thing is to protect the essentials you need to live.”
This is where cash stuffing seems to work for those who are already in the habit of evaluating their monthly budgets.
TikToker Shelise is grateful that she started making money 7 years ago, “compared to now when things are really, really tight”.
“Every expense in our budget has gone up… inflation is really hitting us from every angle you can think of,” she told CNBC.
Limiting daily spending to cash has always been a “big motivator” for her because it’s something she can hold in her hands.
“You can have a visual, you can touch it and see it,” the stay-at-home mom said.
But as food prices soar, it has also helped her better allocate her money to basic necessities like groceries.
“What we do is we list all our necessities – like food, gas, mortgage, utilities, water. And we list how much money we have to work and we really donate priority to what’s most important,” Brown explained. , the financial planner.
“We kinda sacrifice vacations or buying clothes because food, property taxes and gas have gone up so much…and those have to be paid for. We have no choice.”
For Lisa, who goes through BeeBudgeting on ICT Tacit was the cost of gas that required more attention in his monthly budgeting – and the cash stuffing helped him “tremendously”.
“I had to readjust my expenses several times to take into account the amount of gasoline I was using. [Three months ago] I was able to budget just $60 per paycheck to go… I’m now spending $120,” the Canadian said.
As costs rise, the fund or envelope stuffing system allows increases in overall spending to be “more apparent”, said Diahann Lassus, a certified financial planner.
“Inflation shows up faster when the targeted amounts of an envelope are not enough and you have to take the time to understand where the money is going.”
Like Camilla, Shelise said she would have countered inflation in the past by using credit cards or payday loans, which she used to do in the past.
“The thing was, [my husband and I] makes enough money. We just didn’t know where the money went.”
Cash stuffing has also helped individuals prepare for times to come. For Shelise, that means projecting future expenses that can be safely tucked away in envelopes.
“Christmas comes around the same time every year, my daughter’s birthday is the same day every year. I can have an envelope for her school activities and put some money aside. When these things happen, I can just go and say, ‘Here’s the money for this,'” she said.
“It helped me to really understand that I could be prepared ahead of time if I started now.”
Shelise pointed out that it’s not too late to start practicing cash stuffing now, even if it just means “being a month ahead of the bills”.
“In fact, I’m beating inflation if I can pay off my credit card now rather than let this interest accumulate.”
Lassus agreed, saying it’s times like these that “variable interest rates rise. She was referring to the fluctuation of interest rates over time.
“Costs of credit cards, auto loans, or other major purchases can get higher. It’s so important to stick to a budget in times of high inflation so that debt doesn’t become a bigger problem later.”
How to start
If you’re considering getting into cash stuffing, here are a few things to consider before doing so:
When it comes to finances or budgeting, it can be “really overwhelming,” Shelise said. She recommends people to start stuffing money into their “four walls” or where they live.
“Just list four or five expenses you can start with…maybe your mortgage, your water and electric bill, food and gas for your car. Get yourself a simple binder and just work on being consistent every time you receive your paycheck.”
Brown added that the money-stuffing method isn’t “a quick fix” and she suggests picking just one area of overspending to start with.
“If you find it really helps you keep your spending under control in this area, expand it into another area where you’re struggling. It doesn’t have to be all or nothing.”
It may seem satisfying to have filing cabinets full of money, but you should too be careful not to leave huge sums of money at home.
“Here in the United States, landlords and tenants the insurance usually only covers a certain amount of money if it is destroyed or lost. I would advise people to check with their insurance companies what part of that money is recoverable,” Brown said.
To protect her money — and collect interest rates from banks — Shelise deposits her savings whenever she accumulates between $500 and $1,000. She then places counterfeit money, which she buys on Amazon, in her filing cabinets as a placeholder.
“I might still have something in my hand that I can touch. But I don’t have real money just sitting around.”
There’s no doubt that stuffing cash takes longer than paying with a debit or credit card, which can be a frictionless experience.
Brown said: “When you think about how long you have to take to create the budget, go to a bank to withdraw the money…then come home, divide the money, put the money in envelopes. Have you do you have the time to spend on that?”