As news of rising gas prices made the headlines, Yasmine Camilla saw her energy bill double “almost overnight.” Filling the tank now costs 30% to 40% more, she says.
But this rising 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 driver, who lives in London, England.
“I would just think, well, [the payment] It will pass because my debt was on my credit card, and I always had some money in my bank. But the detriment would always be that the money in my bank would run out and 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 a debt of $50,000.
Today, their consumption habits paint a different story.
After realizing that energy and gas prices had skyrocketed, she started saving more money each month. Instead of paying with a debit or credit card, she now only pays in cash.
Videos under the hashtag #cashstuffing racked up more than 360 million views on Wednesday.
“When I fill up my car with gasoline, instead of [than] filling up and then paying the amount to my car, I fill up on gas based on how much money I have… it’s more controlled and planned,” said the creator of TikTok.
“I might decide to cut the budget somewhere else, maybe cut back on my savings for now until I get a pay raise.”
The videos mainly feature colorful, personalized money folders with labeled compartments for different categories – such as rent, food, savings and sinking funds.
Yasmine started filling the cashier in September. She said it helped her pay attention to all expenses and curb spending. She claimed he even managed to help her pay off her debt in five months and build up savings – something Yasmine said she “never, never” had in her life.
How cash stuffing works
The concept is not new. Box stuffing is similar to the envelope budgeting system.
Tania Brown, a certified financial planner and financial coach at SaverLife, puts it this way.
“Before there were banks and ATMs, people paid for things with cash. They put what they owed in envelopes, labeled what they had to pay for,” she said. “This is a very old concept that has just been revived.”
With recession risks mounting and inflation heating up, it’s no surprise that people need to be “more in control of spending than ever,” Brown said.
“Before, you could go a little over your budget and be fine. But with everything going up and beyond your budget… the importance of sticking to a strict budget is more important.”
Also, a budget is no longer one you can “set it and forget it,” he added.
“Depending on where you live, every week you have to review your budget, because prices go up tremendously. The most important thing is to protect the essentials that are necessary for you to live.”
This is where box stuffing seems to be working for those who are already in the habit of evaluating their monthly budgets.
TikToker Shelise is grateful to have started making money 7 years ago, “versus now when things are really, really tight”.
“Every single expense in our budget has gone up…inflation is really hitting us from every angle you can imagine,” she told CNBC.
Limiting daily expenses to cash only has always been a “big motivator” for her as it’s something she can hold in her hands.
“You can have a look, you can touch it and see it,” said the housewife.
But as food prices soar, it has also helped her better allocate her money to necessities like groceries.
“What we do is we list all of our needs — like food, gas, mortgage, utilities, water. And we list how much money we have to work with and really prioritize what’s most important,” Brown explained. , the financial planner.
“We’ve sacrificed a little vacation or clothes shopping because food, property taxes and gas have gone up so much… and that has to be paid for. We don’t have a choice.”
For Lisa, who goes by BeeBudgeting on TikTok, it’s the cost of gas that required the most attention during her monthly budget — and the cash stuffing helped “tremendously.”
“I had to readjust my expenses a few times to accommodate the amount of gas I was using. [Three months ago] I was able to budget only $60 per salary for this… Now I’m spending $120,” said the Canadian.
As costs rise, the cash or envelope stuffing system allows increases in overheads to be “more apparent,” said Diahann Lassus, a certified financial planner.
“Inflation appears more quickly when the target values of an envelope are not enough and it takes time to understand where the money is going.”
Like Camilla, Shelise said she would have fought inflation in the past using credit cards or payroll loans, which she used to do in the past.
“The thing was, [my husband and I] earned enough money. We just didn’t know where the money went.”
Cash stuffing also helped people prepare for times ahead. 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 save a little money. When these things happen, I I can go straight to him and say, ‘Here’s some money for this,'” she said.
“It helped me to really understand that I could be prepared in advance if I started now.”
Shelise emphasized that it’s not too late to start practicing cash stuffing now, even if it just means “getting a month ahead of the bills.”
“I’m actually beating inflation if I can pay off my credit card now instead of letting the interest build up.”
Lassus agreed, saying that it is during these times that “variable interest rates go up”. She was referring to how interest rates fluctuate over time.
“The costs of credit cards, car loans or other large purchases can become more expensive. It’s very important to stay within budget in times of high inflation so that debt doesn’t become a bigger problem later on.”
How to begin
If you are planning on embarking on cash stuffing, here are a few things to note before doing so:
1. Start small
When it comes to finances or budgeting, it can be “really overwhelming,” said Shelise. She recommends that people start filling the cashier inside their “four walls”, or where they live.
“Just list four or five expenses you can start with…maybe your mortgage, electric bill, food and gas for your car. Get a simple binder and work to be consistent every time you get paid.”
Brown added that the cash-filling method is not “a quick fix” and she suggests picking just one area of overspending to start with.
“If you think this really helps you keep track of your spending in this area, expand to another area where you’re struggling. It doesn’t have to be all or nothing.”
2. Safety first
It may seem satisfying to have briefcases full of money, but you should too Be careful not to leave large amounts of money at home.
“Here in the US, homeowners and renters insurance typically only covers a certain amount of money if it’s destroyed or lost. I advise people to check with their insurance companies how much of that money is recoverable,” Brown said.
To protect her money – and reap the bank’s interest rates – Shelise deposits her savings every time she accumulates $500 to $1,000. She then puts fake money, which she buys on Amazon, back in her binders as a placeholder.
“I might still have something in my hand that I can touch. But I don’t have real money just sitting there.”
3. It takes work
There’s no doubt that filling cash takes longer than paying with a debit or credit card, which can be a frictionless experience.
Brown said, “When you think about the time it has to take you to create the budget, go to a bank to get the money… then come home, divide the money, put the money in envelopes. spend it?”