as news of increase in gasoline prices splashed in the headlines, Yasmine Camilla saw her energy bill double “almost overnight”. Filling the tank now costs 30% to 40% more, she says.
But this increased cost of living it’s something she would never have noticed eight months ago.
“I had always filled my car when I needed gasoline”, said the 36-year-old, who resides in London, England.
“I’d just think, well, [the payment] it will happen because my debt was on credit cards, and I always had some money in my bank. But the downside was always that I ran out of money in the bank and then I started using credit cards,” he said. CNBC do it.
At one point, he said he had 10 debit and credit cards in total, and was $50,000 in debt.
Today, your spending habits paint a different story.
After realizing that energy and gas prices had skyrocketed, he began saving more money each month. Instead of paying with a debit or credit card, he now pays only in cash.
Videos with the #cashstuffing hashtag have garnered more than 360 million views as of Wednesday.
“When I fill my car with gasoline, rather [than] filling up and then paying the amount in my car, I fill the gas based on the amount of cash I have… it’s more controlled and planned,” said the tik tok creator saying.
“I may decide to cut budget somewhere else, maybe slow down my savings for now until I get a raise.”
Most of the videos feature colorful, personalized cash folders with compartments labeled for different categories, such as rent, food, savings, and sinking funds.
Yasmine started to load up on cash in September. She said that she has helped her pay attention to all expenses and restrict spending. She claimed that she even managed to help pay off her debt in five months and build up savings, something Yasmine said she had “never, ever” had in her life.
The concept is not new. Cash stuffing is similar to budget envelope system.
Tania Brown, Certified Financial Planner and Financial Coach for SaverLife explains it this way.
“Before there were banks and ATMs, people paid cash. They put what they owed in envelopes, labeled them with what they had to pay,” he said. “This is a fairly old concept, which has just been revived.”
“Before, you could go a little over your budget and be fine. But with everything going up and over your budget… the importance of sticking to a strict budget is more important.”
In addition, a budget is no longer something that can be “set and forgotten,” 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 you need to live.”
This is where cash padding seems to be working for those who are already in the habit of evaluating their monthly budgets.
tik toker Shelise is grateful that she started accumulating cash 7 years ago, “as opposed to now, when things are really, really tight.”
“Every expense in our budget went up…inflation is really hitting us from every angle you can think of,” he 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 picture, you can touch it and see it,” said the housewife.
But how food prices skyrocketit also helped her better allocate her money to necessities like groceries.
“What we do is list all of our necessities, like food, gas, mortgage, utilities, water. We list how much money we have to work with and really prioritize what’s most important,” Brown explained. , the financial planner.
“We sacrifice a little bit of vacations or buying clothes because food, property taxes and gas have gone up so much… and you have to pay for them. We have no other choice.”
To Lisa, who calls herself BeeBudgeting on tik tokit’s the cost of gas that has required the most attention during her monthly budget, and the cash padding has helped “tremendously.”
“I had to readjust my spending multiple times to accommodate the amount of gas I was using. [Three months ago] I was able to budget only $60 each paycheck to pay it off…now I’m spending $120,” the Canadian said.
As costs rise, the cash-stuffing or envelope system allows increases in overall spending to be “more apparent,” said Diahann Lassus, a certified financial planner.
“Inflation sets in most quickly when the target amounts in an envelope are not enough and it requires taking time to understand where the money is going.”
Like Camilla, Shelise said that in the past she would have offset inflation by using credit cards or payday loansthat he used to do in the past.
“The thing was, [my husband and I] made enough money. We just didn’t know where the money was going.”
Cash padding has also helped people prepare for more difficult situations. times ahead. For Shelise, that means projecting future expenses that can be safely stored 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 come up, I can go right in and say, ‘Here’s some money for this,'” he said.
“It helped me really understand that I could be prepared ahead of time if I start now.”
Shelise emphasized that it’s not too late to start practicing cash stuffing now, even if it means simply “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 those times that “variable interest rates go up.” He was referring to how interest rates fluctuate over time.
“The costs of credit cards, car loans or other large purchases can get more expensive. It’s very important to stay within a budget in times of high inflation so that debt doesn’t become a bigger problem later.”
If you’re planning to embark on cash stuffing, here are a few things to keep in mind before doing so:
When it comes to finances or budgets, it can be “really overwhelming,” Shelise said. She recommends people start accumulating cash within their “four walls”, or where they live.
“Just list four or five expenses you can start with…maybe your mortgage, water and electric bill, groceries, and gas for your car. Get a simple binder and work on being consistent every time you get your paycheck.” “.
Brown added that the cash-stuffing method isn’t “a quick fix” and suggests choosing just one area of overspending to start with.
“If you find that it really helps you keep control of your spending in that area, then expand to another area where you’re struggling. It doesn’t have to be all or nothing.”
It may seem satisfying to have wallets full of money, but you should too be careful about leaving large amounts of cash at home.
“Here in the US, homeowners and renters sure it usually only covers a certain amount of money if it is destroyed or lost. I advise people to check with their insurance companies how much of that cash is recoverable,” Brown said.
To protect her cash and take advantage of bank interest rates, Shelise deposits her savings every time she accumulates between $500 and $1,000. She then puts counterfeit money, which she buys on Amazon, back into her wallet as a placeholder.
“I might still have something in my hand that I can touch. But I don’t have the real money just sitting around.”
There’s no question that topping up cash is more time consuming than paying with a debit or credit card, which can be a frictionless experience.
Said Brown, “When you think about how long it takes to create the budget, go to a bank to get the money out…then come home, divide the money, put the money in envelopes. Do you have the time to spend on this?”