Gen Z is embracing cold, hard cash.

After being hard-hit financially by the pandemic and the surging inflation that followed, the generation entering adulthood is meshing their love of late-‘90s nostalgia — think cargo pants, bucket hats and disposable cameras — with a dose of old-fashioned frugality.

One viral TikTok challenge has users smashing Hennessy bottles to access bills they’ve been stashing for months. Another trend includes organizing extra cash into envelopes dedicated to various expenses. Others, like 21-year-old McKenna Alvizo, are simply flaunting the items they paid for with cash — which, in their minds, is basically “free.”

“It’s a thought process that a lot of us have,” she said. “If I don’t have to see a deduction from my bank account, it doesn’t feel like I spent it.”

To be sure, consumers’ overall use of cash has declined steadily in recent years as digital options like Venmo and Apple Pay compete with credit cards that now offer contactless payment. And the pandemic was hard on greenbacks, as even more Americans gravitated to online shopping and worried whether viruses could be transmitted via paper money. 

But it appears cash use may have bottomed out in 2020, according to the Federal Reserve Bank of San Francisco’s most recent Diary of Consumer Payment Choice. Cash accounted for 20% of all payments in October, up from 19% a year earlier, which marked the first increase since the diary began in 2016.

One of the factors encouraging more frequent cash use is discounts offered by small businesses, a trend that’s picked up since Visa and Mastercard hiked credit-card swipe fees for merchants in April. In addition, racking up credit-card debt is getting more expensive, with the average annual percentage rate hitting 16.98% last week, the highest level since March 2020, according to With inflation at a 40-year high, it’s another incentive for belt-tightening consumers to use greenbacks.

Gen Z is more likely to pay with cash than people aged 25 to 44, according to the San Francisco Fed. And a recent survey by Credit Karma found that 45% of Gen Z respondents prefer cash for everyday purchases, with 33% of those saying they feel like they have more control when they use cash, and 25% saying they don’t want to rack up debt.

For Gen Z, cash’s vintage vibe only adds to its appeal, said Jason Dorsey, president of the Center for Generational Kinetics.

“Gen Z is a throwback generation,” he said. “The act of carrying cash is still new and different.”

‘Fear Of Debt’
While the TikTok videos of cash transactions are often fun and light-hearted, they obscure the pragmatic and conservative way younger Americans approach their money.

Gen Z’s finances were bruised by the pandemic: 43% of those aged 18 to 24 reported that they fell behind on credit cards, rent and other payments, according to a 2020 study from the Center for Generational Kinetics. Now, decades-high inflation is hitting them particularly hard, instilling a fear of debt.

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