Gen Z (people born between 1997 and 2012) is turning to an old-school trick to save money – carrying cash.
A whopping 69% of Gen Z is using cash more now than they did last year, according to a May 2023 Credit Karma report.
Ted Reinhardt, 23, from Overland Park, Kansas, acknowledged his generation doesn't overwhelmingly choose to carry cash, but he does try to have some on him, adding that it's "nostalgic" to use.
Most Gen Z shoppers with iPhones said they use Apple Pay because you don’t need a wallet and can simply tap your phone to pay, but others believe that feature makes it too easy to spend money. Of Gen Zers who use cash to pay for purchases, 59% say they do so as a way to budget, and 64% say they spend less money when they pay with cash, per the report.
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In downtown Minneapolis, Eli Amaris was on his way to Target when he said everything he’s learned about money has been self-taught.
"I have a bank account, but I try not to touch it, and when I spend, I like to use cash," Amaris said, adding that budgeting was hard when he didn’t have cash because the money showing on his digital bank account didn’t feel real.
Times are tough and 70% of Americans say they’re stressed about finances right now, according to a CNBC report from April.
"I’m more able to stop myself when I see, visually see and feel, how much I have left," he said.
Vlad Winghert, 21, said he prints cash out when he gets paid by mobile deposit, so he can sort it for rent, food or rideshare apps. He said it's helpful for him to physically feel his money.
"This amount of cash can only be used for this, and I can’t go past it," Winghert said while describing his process of saving money with cash.
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University of St. Thomas finance professor Dave Vang said it can be helpful to divide cash into envelopes.
"I think it is a well-worn trick that's been used for a long time for budgeting. It is certainly becoming more popular now," Vang said. "It’s actually a well-known practice among people dealing with people who are mentally handicapped to use cash."
Vang said "higher and higher percentages of people are living paycheck to paycheck," and when you’re living paycheck to paycheck, it's important to make sure you know exactly where every dollar is.
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The term "cash stuffing" has popped up on Gen Z’s favorite search engine, TikTok, and is similar to the cash in envelopes method.
Charlotte Hall has over 160,000 followers combined between her TikTok and Instagram accounts. She got into cash stuffing after a $1,200 car repair bill a year ago caught her off guard. She wanted to make a budget that would allow her not to go off track if there was an unexpected bill.
"You take your variable expenses, things like your hair, your nails, your groceries, your gas, and you take those monies out in cash, and you allot certain amounts of those monies to the envelopes, and you only spend what's in the envelope," Hall said, explaining the concept of cash stuffing.
She continued: "You are setting limits for yourself, but you are able to physically hold the cash in your hand, which tells your brain I better stop spending at a certain point."
Hall said the people who interact with her page the most are Gen Zers and Millennials who live in New York City or those who are budgeting for a family.
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"The best way to leverage your variable expenses is to try to decrease some of your fixed expenses. And one of the ways I teach to decrease your fixed expenses is to call the companies that you are in business with and ask for discounts." Hall said. "Some people don't know that they have discounts available. Some people don't know that for your car insurance, if you just drive under the speed limit, you can get a discount."
