As news of soaring gas prices hit the headlines, Yasmine Camilla saw her energy bill double “almost overnight”. Filling up now costs 30 to 40 percent more, she says.
But she would never have noticed the rising cost of living eight months ago.
“I only filled up my car when I needed gas,” said the 36-year-old, who lives in London, England.
“I would just think, well, [the payment] go through with it because my debt was on credit cards and I always had some money in my bank. But the downside would always be that my bank would run out of money and then I would start using the credit cards,” she told CNBC Make It.
She once said she had a total of 10 debit and credit cards — and $50,000 in debt.
Today, their spending habits paint a different story.
After realizing that energy and gas prices had skyrocketed, she put more money aside each month. Instead of using an EC or credit card, she now only pays with cash.
Videos tagged #cashstuffing had been viewed over 360 million times as of Wednesday.
“Rather when I fill up my car [than] When I fill up and then pay the amount in my car, I fill up the gas depending on how much cash I have… it’s more controlled and planned,” the TikTok creator said.
“I may decide to cut the budget elsewhere, maybe slow down my savings for now until I get a raise.”
The videos mostly feature brightly colored, personalized money binders with compartments labeled for different categories — like rent, groceries, savings, and declining funds.
Yasmine started cash stuffing in September. She said paying attention to each expense and cutting back on spending has helped her. She claimed it even helped her pay off her debts in five months and amass savings – something Yasmine said she “never, ever” had in her life.
This is how cash stuffing works.
The concept is not new. Cash stuffing is similar to the envelope system of budgeting.
Tania Brown, Certified Financial Planner and Financial Coach at SaverLife, puts it this way.
“Before there were banks and ATMs, people paid with cash. They put their debts in envelopes and wrote what they had to pay on them,” she said. “It’s a pretty old concept that’s just been revived.”
With recession risks rising and inflation rising, it’s no surprise that people “need to be more in control of their spending than ever before,” Brown said.
“You used to be able to go a little over budget and be okay. But with everything going up and going over your budget… it’s more important to stick to a strict budget.”
Also, a budget is no longer a “set and forget” budget, she added.
“Depending on where you live, you have to rethink your budget every week because the prices are rising enormously. The most important thing is to protect the essentials that you need to live.”
This is where cash filling seems to work for those who are already used to evaluating their monthly budgets.
TikToker Shelise is thankful she started stuffing cash 7 years ago “contrasted to now when things are really, really tight”.
“Every single expense of our budget has gone up… inflation is really hitting us from every angle,” she told CNBC.
Limiting daily expenses to cash has always been a “great motivator” for her because she can hold it in her hands.
“You can have a picture, you can touch it and see it,” said the stay-at-home mom.
But with food prices soaring, it’s also helped her put her money to better use on necessities like groceries.
“We list all our necessities – like groceries, gas, mortgages, utilities, water. And we list how much money we have to work with, and we really just prioritize what’s most important,” explained Brown, the financial planner.
“We’re sacrificing a little vacation or buying clothes because groceries, property taxes and gas have gone up so much… and those have to be paid for. We have no choice.”
For Lisa, who uses BeeBudgeting on TikTok, it was the cost of gas that required more attention in her monthly budgeting — and stuffing cash has helped “enormously.”
“I had to readjust my spending a few times to match my gas mileage. [Three months ago] I could only budget $60 for each paycheck…I’m spending $120 now,” the Canadian said.
As costs increase, the cash stuffing or envelope system allows increases in overall spending to become “more obvious,” said Diahann Lassus, a certified financial planner.
“Inflation shows up more quickly when target envelope amounts are insufficient, and you have to take the time to understand where the money is going.”
Like Camilla, Shelise said she has historically countered inflation with credit cards or payday loans, which is what she was used to in the past.
“The thing was, [my husband and I] earn enough money. We just didn’t know where the money was going.”
Cash stuffing has also helped individuals prepare for tougher times times ahead. For Shelise, that means forecasting future expenses that can be safely tucked away in envelopes.
“Christmas comes around the same time every year, my daughter’s birthday is on the same day every year. I can have an envelope for her school activities and put some money away. When those things come up, I can just jump into it and say, ‘Here’s some money for it,'” she said.
“It helped me really understand that if I start now, I could be prepared in advance.”
Shelise stressed that even if it just means “being a month ahead of the bills,” it’s not too late to start cash stuffing now.
“I’m actually beating inflation if I can pay off my credit card now instead of accumulating this interest.”
Lassus agreed, saying that at such times “variable interest rates go up.” She was referring to how interest rates fluctuate over time.
“The cost of a credit card, car loan, or other big purchase can get expensive. It’s so important to stay on budget during times of high inflation so debt doesn’t become a bigger problem down the road.”
how to start
If you are planning to stuff cash, here are some things to keep in mind before you do it:
1. Start small
When it comes to finances or budgeting, it can be “really overwhelming,” Shelise said. She recommends people start stuffing money their “four walls” or where they live.
“Just list four or five expenses to start with… maybe your mortgage, water and electric bills, food and gas for your car. Get a simple binder and just work on being consistent every time you get your paycheck.”
Brown added that the cash stuffing method isn’t a “quick fix,” and she suggests just picking one overspending area first.
“If you find that staying in control of your spending in that area really helps you, then expand into another area where you’re struggling. It doesn’t have to be all or nothing.”
2. Safety first
It might seem satisfying to have folders filled with money, but you should too Be careful not to leave large amounts of cash at home.
“Here in the US, homeowners and renters insurance 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 money is recoverable,” Brown said.
To protect her cash — and reap bank interest rates — Shelise deposits her savings every time she accumulates $500 to $1,000. Then she puts counterfeit money that she bought on Amazon back in her folders as placeholders.
“I could always have something in my hand that I can touch. But I don’t have the actual money just sitting around.”
3. It takes work
There is no doubt that filling cash is more time-consuming than paying with a debit or credit card, which can be a hassle-free experience.
Brown said: “When you think about the time it takes you to do the budget, you go to a bank to get the money out … and then come home, split the money, put the money in envelopes. Do you have the time? spend on it?”