Millennials are increasingly returning to one of the most traditional methods of saving as they seek better money management in the face of the rising cost of living.

This trend, known as “cash stuffing,” involves regularly withdrawing your earnings from the bank, either weekly or monthly, and dividing the cash into different envelopes or folders, each representing a specific spending category, such as gas, groceries, and insurance.

For example, setting aside $30 a week in an envelope for car insurance ensures that when the annual bill is due, the money is already available. This approach is designed to encourage discipline by limiting spending to what you have in cash, helping to prevent unnecessary debt.

The visual nature of this method challenges the concept of a cashless society and revives a saving strategy used by previous generations. The demand for cash binders specifically designed for this budgeting technique has surged as a result.

Julietta Routley from Melbourne began selling personalized cash binders online about a year ago and has seen her sales triple.

“The majority of my customers are saving for everyday expenses like rent and groceries, but some are putting money away for major life events, like a wedding,” she says.

‘Cash stuffing works better for me than trying to keep track on a spreadsheet.’

Nikki Madgwick

Nikki Madgwick purchased a cash binder from Routley to use as a savings tool around her 30th birthday. She admits that in her younger years, she preferred taking vacations over saving for a home loan.

“I looked at my friends and saw that they all had loans and were making progress in life, and I knew it was time for me to start taking my finances more seriously,” says the Melburnian.

However, it wasn’t until she was browsing Instagram one night that she discovered the missing piece.

“I saw a woman talking about how she was dividing her weekly income into different envelopes, and I was immediately intrigued. I’m a very visual person, so the idea of splitting my income into categories really appealed to me,” she says.

“It was overwhelming to even think about creating a budget. I used to believe that as long as you had enough to cover your bills and enjoy life, that was sufficient. Cash stuffing works much better for me than trying to manage a spreadsheet.”

After figuring out her spending categories and labeling each envelope, she discovered ways to save. She enjoys crafting in her free time, so she sets aside a few coins in an envelope each week for that.

Madgwick also deposits money in the bank for a home down payment. Each time her savings reach $1,000, she prints and laminates a $1,000 note and places it in her binder as a visual representation of her bank account. Although it’s still early, she has already saved just over $1,500 and still has money left for small luxuries.

There’s also a psychological benefit to this trend, as it helps reinforce the basic principles of saving. Financial therapist Jane Monica-Jones believes it’s positive that more young people are becoming more disciplined with their spending.

“During tough economic times, people tend to become more resourceful. We can’t always live in a state of abundance. Sometimes, we need to enter a period of contraction,” she says.

However, she warns against jumping into a new savings trend that may not align with your personal approach to money. There’s also the risk of cash being lost or stolen, and this method can complicate online payments.

“People shouldn’t take a one-size-fits-all approach to financial well-being. If this method doesn’t work for you, try another approach,” Monica-Jones advises.

The advice in this article is general and not intended to influence readers’ decisions regarding investments or financial products. Readers should always seek professional advice that considers their personal circumstances before making any financial decisions.