Viral TikTok trend 'cash stuffing' could help Gen Z stick to a budget

Posted on July 11, 2023 at 7:09AM

Jennifer Williams from FOX 5 NY brings you the latest news.

NEW YORK - The younger generation, known as Gen Z, seems to be embracing a traditional approach to money, and this trend is gaining popularity on the social media platform TikTok.

What's 'cash Stuffing'?

By utilizing the technique of "cash stuffing" or the "envelope method", individuals allocate their monthly earnings after subtracting expenses, and subsequently separate the cash into envelopes designated for various categories. This approach ensures that they solely spend the amount contained within each respective envelope.

Any remaining money is immediately put into savings.

According to Bryan Kuderna, a financial advisor and the writer of What Should I Do With My Money, he believes it's positive that the younger generation, known as Gen Z, is beginning to contemplate budgeting and assuming some financial accountability. Additionally, Kuderna states that this shift is likely a consequence of Gen Z's current age range, which spans from approximately ten years old to twenty-four years old.

Kuderna further expressed: "Therefore, the number of individuals who are actually qualified for a credit card is quite limited. One must attain the age of 18 to be eligible for a credit card, and ever since the implementation of the Credit Card Act in 2009, it has become exceedingly challenging for individuals under the age of 21 to obtain a credit card. Hence, I believe that young adults aged 18 to 21, commonly referred to as college-age individuals, are contemplating their finances and seeking ways to make astute financial decisions."

Kuderna asserts that the approach is a solid beginning for individuals in their youth.

You might have spotted the cash stuffing concept popping up on TikTok and such platforms. Personally, I believe it's quite a beneficial habit or workout. And hopefully, in several years when that 22-year-old turns 25, they might think, "Alright, I'll apply the same approach, but this time I can use my credit card to extend my financial capabilities for a month. By doing so, I can establish a positive credit history and earn some rewards in the process." Ultimately, it can become a mutually beneficial situation, as suggested by Kuderna.

Based on a recent report from Credit Karma, nearly 70% of individuals belonging to Generation Z are currently utilizing physical currency to a greater extent compared to the past year. This percentage surpasses that of Generation X, which stands at 47%, as well as Baby Boomers, who make up 37% of individuals preferring cash.

When it comes to managing their finances, individuals in New York City employ different strategies. FOX 5 NY interviewed some locals who utilize a range of techniques including mobile applications like Mint, word documents, and the 50/30/20 rule. This rule suggests allocating 50 percent of one's income towards savings, 30 percent towards personal desires, and the remaining 20 percent towards expenditure.