Young People Value Cash for Budgeting

Research conducted by personal finance company Credello found the time-honoured budgeting technique known as cash stuffing has seen a recent boom in popularity among young adults, with more than 60 percent of respondents saying they are presently managing their finances with the help of cash.

Credello carried out an online survey of 600 adults already familiar with cash stuffing, which entails placing income in the form of banknotes into a set of envelopes labelled with essentials that must be filled first—such as rent, groceries and travel expenses—and non-essentials that can receive any leftover cash, with categories such as treats and savings.

Nearly 61 percent of people said they were currently cash stuffing, and 45 percent said they used the method every time they receive a paycheque. More than 28 percent of Gen Z and Millennial respondents (aged 18–25 and 26–41 respectively) said they use cash stuffing for everyday purchases.

The youngest age group were most likely to have heard about cash stuffing from friends or family (36 percent) closely followed by social media sources (30 percent). A third said they had turned to cash stuffing as a way of controlling their overspending, and around 30 percent said the pressure of inflation had led them to explore better budgeting practices, including the use of cash.

Overall, 24 percent of respondents said they were using cash stuffing to help them pay off debt, with 23 percent specifying this was credit card debt. 14 percent said they were using cash as they are sceptical of financial institutions, while 15 percent had concerns around the security of relying on technology for budgeting.

More than half of the people surveyed were continuing to use credit cards in addition to cash stuffing, reinforcing the modern approach of using multiple payment methods, choosing between each to best suit a given situation.