Money / Financial Planning
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Every generation looks at the younger generations and scratches their heads, noting differences that often feel miles wide. Generation Z, those born between 1997 and 2012, is definitely doing things differently than older generations, especially when it comes to money.
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These youth, who have been born into a digital age and utilize social media with a fervor their older peers don’t understand, have also grown up during some tough economic times. They’ve watched their parents weather a massive recession, followed by a pandemic, and they don’t want to make the same mistakes, according to Forbes.
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Inspired by Tik Tok influencers, one money trend that seems new, but is actually a throwback to simpler times, is “cash stuffing.” It’s pretty much what it sounds like: dividing up your income into physical envelopes marked for different expense categories and stuffing them with money.
“Cash stuffing is a financial strategy that involves saving cash instead of investing it in order to best inflation,” says Harry Turner from The Sovereign Investor, an investing and trading education website. “This strategy is especially popular with Gen Z…who are often saddled with student debt and uncertain job prospects. So by stashing away cash, they hope to safeguard their finances against an uncertain future.”
There are different approaches to it. Some people put money away where they’ll “forget” about it, Turner says, making them less tempted to spend it, such as in a shoe, under a mattress or in a jar in the back of the fridge.
Other people are more strategic about it — according to Bill Lyons, founder, CEO and President of Griffin Funding — by dividing their income into different envelopes or binders and then putting specific amounts in these each month. “The idea is that you are only spending physical cash and have pre-divided funds for each area you might be spending in. Essentially, because it is a technology-free and simple methodological way to budget and plan finances, it feels safer for Gen Z that lacks faith in traditional banking and government systems.”
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In a practical sense, it’s also a way to always know how much money you have upfront, Lyons explains. To break …….