The advent of online payment transactions has been a game-changer for the way we do business. No longer are we limited to using cash or checks to pay for goods and services. We can now use our credit and debit cards to make purchases online, in person, or even over the phone.

This convenience has come with some challenges, however. With so many different payment options available, it can be difficult to know which one to use for each transaction. And, with the rise of online fraud, we have to be extra careful about how we enter our payment information.

And while there are a number of benefits from cashless transactions, more people are overlooking the benefits of using bank notes.

But, did you know that there's an old-school trick that can help you save?

This money-saving method has been circulating (pun intended) online after one woman revealed that she managed to save nearly $30,000 in one year using this technique.

Credit: YouTube/CAROCASH​

Australians are increasingly turning to an 'old school' tactic known as 'cash stuffing' to help them budget and save.

Under this method, you physically place cash into different envelopes categorised by outgoing costs, such as petrol, groceries, health insurance and memberships. This can help you keep better track of your spending and make sure you're not blowing your budget on unnecessary expenses.

Sharing her tip on YouTube, Caroline, better known for her username @CAROCASH, said that she has saved a lot since starting her cash stuffing journey last year.

Caroline shared that she divides her $700 weekly budget into two separate organisation binders—one for spending and one for saving.

The thrifty tips expert also revealed that she includes spending money for car maintenance and registration, petrol, holidays, health care, and gifts in her ‘sinking fund’ and sets aside money for Christmas, sales, and self-care.

Anyone who has trouble sticking to a budget can try this easy strategy thanks to its simplicity and the extra advantages it offers, such as feeling in direct charge of your finances and avoiding the need for a credit card.

The method allows consumers to easily track their expenses. Credit: YouTube/CAROCASH.​

The drawback, however, is that no interest will be earned while the excess cash is out of the bank.

According to Daniel Jovevski, founder and CEO of the money management software WeMoney, the method is gaining popularity among many Australians as we experience difficult financial times.

'Tougher times with inflation and cost of living pressures have brought back this old but effective method as consumers combat increasing petrol and food prices,' he explained.

Additionally, the technique helps people to cognitively comprehend what it's like to spend money - something that most of us are having trouble understanding because of the online payment options and credit cards available at our disposal.

Mr Jovevski continued: 'This trend has deep behavioural benefits with prominent behavioural scientists identifying the method as helping people increase their "pain of paying", meaning when we pay with cash we feel a little pain when we see the amount of money leave our wallets or [cash] envelopes.'

Saving money during inflation can be difficult, but it can be possible. There are a few things that you can do to make sure that your money is not being wasted.

We also recommend our members always check the Money Saving Hacks section of the SDC website to learn more tips on how you can lessen your expenses or save more money. Already feeling the pinch of the pension? Check out our article on ways to earn money as a pensioner.

So, there you have it, folks! Have you done something similar to this trick? Better yet, have you experienced budgeting your money by ‘cash stuffing’? Share your stories with us in the comments below!

 

[WilliamhGibsona]

Envelope method is only the beginning to financial management and literacy! It’s a great start to better understand your budget and expenses. And it’s also very easy and visual, because you literally see yourself where your money goes. However, the method can save you money, but not bring 'em. The first thought of a middle-class person wanting to increase their income is to find a better job with a larger salary, nonetheless it wouldn’t change much. An increase in income often leads to an increase in expenses, if a person is not financially literate. The taxes with a bigger salary are bigger and also people usually think they are not as limited as they were and they would try to buy a bigger house and fancier clothes. And at the end of the month, they wouldn’t have any money left, as usual. That’s an example of a financially illiterate person. The problem is, nobody actually wants to learn anything, so a financial advisor exists for these reasons. I hope more people will stop the broke generational cycle!