“They’re in a place where they’re trying to limit risk,” Dorsey said. “They want to know about fees and all of the costs associated with a payment method. Cash is this tangible store of value without surprises that allows them to limit their spending.”
Lisette Pedraza, a 25-year-old veterinary assistant in San Diego, said storing cash in envelopes helps her save for big-ticket items, like the $3,000 she stowed away for a down payment on her car.
“If I know there’s extra in my savings account, I feel inclined to spend more money,” she said. By contrast, cash that’s already withdrawn from her account “feels free.”
Having seen the financial struggles of their older friends and family members, one in five Gen Z respondents said debt should be avoided at all costs. In fact, 64% of Gen Z consumers reported that they don’t have a credit card at all. That includes Alvizo, who exclusively pays with cash and a debit card.
“You have this unlimited amount of money that you get billed for later and I wanted to avoid that,” she said.
Cash-Stuffing
Other financially savvy TikTokers are using physical money to overhaul their finances through “cash-stuffing” — a saving strategy in which people track their spending by distributing a set amount of money across various envelopes dedicated to regular expenses and longer-term goals.
Laura Castellanos, 23, was fed up with living paycheck to paycheck and felt she was “constantly swiping” her cards but didn’t know where her money was going.
After watching a YouTuber demonstrate cash-stuffing in March 2021, Castellanos also started several cash binders where she allocates different sleeves to various saving goals. As many as 11 million have watched videos on her @abundantgains TikTok account, which show her distributing anything from $5 to $100 bills from a stack of cash into funds for a vacation and more. In a little over a year, she has saved about $20,000.
“When we’re using cash, we are taking control of our money instead of it controlling us,” she said.
This article was provided by Bloomberg News.