Hot TikToker shares an “ancient” way to save money
In a time of rising prices, saving money is more important than ever. However, foreign TikTokers share an “ancient” method that allows you to completely buy what you want and still save money.
Yasmine Camilla, 36, has seen her electricity and water bills skyrocket overnight, with gas prices up to 30-40% more expensive. “I simply thought there was enough money left in my account to pay for my expenses. When the money runs out, I will start using a debit card.”, she said. At one point, she owned 10 bank and debit cards and a huge debt of up to $50,000.
After realizing that electricity and gas prices had skyrocketed recently, Camilla started saving money every month, and switched from using a bank card to cash. “When I go to get gas, instead of filling up the tank and paying for it, I will fill it with the amount of money I have in my pocket.”she said.
Videos with hashtags #cashstuffing has attracted more than 360 million views. In the video are colorful money bags with notes for different needs such as rent, food and savings.
Yasmine has been “bundling money” since September, and this has helped her to pay attention to her expenses and limit her spending. She also claimed that she had paid off a huge debt in just 5 months and still had plenty of savings – something that had never happened in Yasmine’s life until now.
What is “money wrapping”?
This concept has actually been around for a long time. As Tania Brown, financial planning expert and financial guide at SaverLife explains: “Before banks and ATMs appeared, people used to pay in cash. They put money in small bags and write the purpose of spending on the outside. This is a fairly old concept that has just been ‘digged’ recently.”
With inflation rising, it’s not surprising that people are paying more and more attention to their finances. Mrs Brown said: “In the past, overspending was not a problem for many people. But now that things are getting more and more expensive, strict spending is essential.”
Another TikToker named Shelise thanked herself for having “covered money” for 7 years to spare for the months of tight finances. “Every expense goes up… Inflation has affected every aspect of our lives.”she told CNBC.
With Lisa, a TikToker with an account named BeeBudgeting, shared that the “money wrapping” method helped her a lot. “I had to adjust the amount of expenses a few times to match the amount of gas I was using. About 3 months ago, I could only spend 60 bucks each. Now I can spend more with 120 dollars each.”Lisa said.
If you also want to start your own “money wrapping” process, here are some tips for you:
1. Plan ahead
“Covering money” is an effective method to save money for the future. For Sherlise, money for future plans just needs to be put in envelopes, no need to think much.
“Christmas comes on the same day every year, and my daughter’s birthday falls on that same day. I would put a certain amount of money in a bag for my daughter to go out and then put the rest away. When that day comes, I just need to give it to her.” Sherlise said.
Sherlise emphasizes that it’s never too late to start wrapping money, even if you’re prepared a month before the bill is due. She confidently: “I feel like I’m beating inflation by paying off the balance on the card instead of letting the interest pile up.”
2. Start small
When thinking about financial savings, anyone can feel “overwhelmed” about the expenses. As a result, Sherlise recommends starting with a certain amount of your basic expenses first.
“List four or five types of bills… for example, rent, water, electricity, food, and gas. Then take an elastic band to wrap the amount for each account. Be persistent in doing this every time you get paid.” Sherlise shared.
However, expert Brown advises starting with the area you are most used to. “When you feel that ‘money box’ helps you successfully control spending in this area, gradually apply it to other areas. It is not necessary to plan in a win-win or zero way.”
3. Safety comes first
There are many envelopes full of money that everyone is interested in, but leaving such a large amount at home also contains many dangers.
“In the United States, homeowners insurance as well as rental housing usually only compensates a certain amount when the owner loses money. So I often advise people to ask insurance companies carefully to see how much lost cash can be recovered.” Brown said.
To protect her money and enjoy bank interest, Shelise deposits her savings every time she accumulates between $500 and $1,000. Then, she temporarily placed fake Amazon money in envelopes to “reserve a place”. This is because she wants to feel that she still has money around, but can’t actually spend it at all.
4. Discipline
Spending money using the “money-wrapping” method obviously takes more time than using a credit card. “Think about the time it takes to go from home to the bank to withdraw money and then go home to divide the money into each envelope, try asking if you have enough time to do this or not?”.
“Money wrapping is a method that requires perseverance, consistency and long-term”added Ms. Diahna Lassus, financial planning expert.
Ms. Brown advises customers to think carefully about the purpose of “wrapping money” because sometimes, someone will still spend too much money on that expense, or “withdraw money from one bag to another”. “You need to have strict rules for yourself… Most importantly, believe in yourself,” she said.
(Source: CNBC)
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