[Youth Report] No More Flexing... These Days, the MZ Generation is Doing the 'Cash Challenge'

SNS Trending 'Cash Challenge'
MZ Generation's Saving Method in High Inflation Era
'Cash Stuffing' Also a Hot Topic in the US

Recently, a 'Cash Challenge' has been trending on social networking services (SNS). This challenge involves using only cash instead of credit cards or mobile payments, which carry a high risk of overspending, offering the advantage of enabling planned spending. The reason young people are opting for cash over cards seems to be linked to the spread of a 'frugal consumption' culture aimed at saving every penny in an era of high inflation.

Preventing Unnecessary Spending... The 'Cash Challenge' Trend

[Image source=Pixabay]

Recently, numerous posts related to the 'Cash Challenge' have been appearing on Instagram. Participants usually set a weekly budget in advance and put the money into a 'cash binder' (a notebook designed to hold cash). When they need to make a purchase, they take money out of the cash binder instead of using a card. If there is leftover cash at the weekly settlement, they save it separately in a 'savings binder' or similar.

Some participants share their challenge progress on SNS, exchanging their own saving tips. One netizen said, "The Cash Challenge became a turning point in my life," adding, "I will no longer spend money recklessly but live by saving. I will try not to give up after just a few days." Searching for 'cash binder' or 'Cash Challenge' on Instagram yields about 23,000 and 22,000 posts respectively.

The advantage of the Cash Challenge is that by using only a fixed amount of cash, it helps reduce unnecessary spending. Also, since you can see the money decreasing in real time, it enables planned consumption.

Kim Dohee (27), an office worker who avoids using credit cards, said, "My salary stays the same, but prices have risen so much that I felt money wouldn’t accumulate and only debt would increase if things continued like this," adding, "I try to use debit cards or cash instead of credit cards whenever possible." She also said, "Not using credit cards has definitely reduced my spending."

The background of this challenge’s popularity is related to the trend of so-called 'Jjantech' (frugal technology). Earlier, when high inflation hit, some citizens tried challenges like the 'zero-spending challenge,' which aims for zero daily expenses, or 'Naengpa' (eating up the refrigerator), which minimizes grocery shopping until all food ingredients in the fridge are used up. The current Cash Challenge is also part of this Jjantech trend.

Cash Usage in the U.S. Too... "Helps Reduce Spending"

Posts related to the 'Cash Challenge'. [Image source=Instagram]

The Cash Challenge is not limited to Korea. In the U.S., it is called 'Cashstuffing,' which means 'cash sorting.' This refers to dividing cash according to its intended use, a saving method used before credit cards became widespread. For example, cash is stored separately for living expenses, transportation, housing, etc.

Some people have said they actually saved money using this method. According to AFP news in March, Judia Greiner (25), a college student living in Virginia, saved $7,500 for tuition using this method. She said, "Credit cards don’t feel like real money," adding, "When you use cash, you can physically see the money disappearing, which helps reduce spending."

[Image source=Pixabay]

TikTok influencer Jasmine Taylor (31) had a similar experience. She said, "I had a degree, but no job prospects, poor financial status, and was a serious impulsive buyer." However, after she started dividing cash into different envelopes for housing, shopping, and other purposes, she was able to pay off $32,000 in student loans, $8,000 in credit card debt, and $5,000 in medical insurance debt.

AFP reported, "Using cash may seem old-fashioned, but more and more people are realizing that cash is effective in an era of high inflation," adding, "Videos of money-sensitive Americans carefully putting cash into envelopes labeled for food, gas, and other expenses are gaining popularity on TikTok."

Priya Malani, founder of the financial advisory service 'Stash Wells,' said, "Cash sorting plays an important role in a recession era," adding, "It’s natural for people to look for controlled spending methods, and they find comfort in holding a one-dollar bill in their hands."