Cash stuffing
Every Thursday night Jen Bowen, 39, a business analyst from Swindon, puts a Post-it on the fridge telling her husband how much to withdraw from the ATM or, if she needs a specific denomination note, the post office on his way to the gym. Friday is cash-stuffing day, where she opens her binders and meticulously divides up her weekly budget, made up of notes and coins, into labelled wallets.
Bowen is part of a growing community of people who are turning their backs on cards, Apple Pay and online shopping to spend only with physical money that has been allocated or “stuffed” into individual envelopes or plastic folders. The inconvenience of paying with cash is the point.
“It is too easy to use contactless on your card and have absolutely no idea what you’re spending,” she says. “We used to pop to the shop every day and think, ‘Oh it’s only two pounds here and there’, but at the end of the week it turns out we’d spent £70.”
Bowen also finds parting with physical money gives her more pause for thought. She says: “If you think, ‘I have got £10 and want to buy that thing for £6.80, that only leaves me three quid for the rest of the week’. That’s a different internal conversation than ‘I want that thing, so I’ll just tap’.”
Strict envelope budgeting has given Bowen a structure that has helped her pay off £26,000 of debt in two years. “It used to be when I got paid, ‘Oh I’ve got £500 left – I’m going to go and spend it’. Actually, that £500 is Christmas, or a school uniform.”
In the past she had to ask whether places accepted cards; now she has to check they’ll let her pay with cash. Mostly it is small independent coffee shops and bars where there’s an issue, and the cinema. In these instances Bowen says she uses a buffer on her bank account that she reimburses from one of the wallets. She also pays some bills online, but is saving in cash so next year she can cover car insurance in one annual lump sum up front.
“When I was younger, I used to love playing Monopoly. I would always insist on being the banker. So my family think it’s quite funny that now my hobby is to play with money.”
Doom spending
Once known as retail therapy, doom spending really gathered pace during the pandemic, as people soothed anxieties by shopping on Amazon. But now the term is being adopted by young people feeling so bleak about the cost of living and house prices that they may as well go shopping. “So many times I sit there searching for dopamine,” says Ed Taylor, 27, from Swansea. “Every time I am tired, upset or stressed, or honestly just not thinking much, and want a quick hit, buying something scratches that itch. Growing up, I had in my mind that you buy a house, you get married, you have kids. But now it’s so expensive that it’s overwhelming. I try to save and realise things are so expensive. And then it’s, ‘Well, I’ve saved money. I might as well spend that.’”
And when parcels arrive? They immediately lose their excitement. “I’m confronted with the admin of having to return a package, which I can’t face, which means I’ll often just keep it and end up thinking,
At first, Taylor put down these bad spending habits to “Not being shown how to ‘money’ properly. Then I was diagnosed with ADHD.” But he also blames the cost of living. He is now a coach for others with ADHD and says doom spending comes up a lot. “There is a lot of shame around not being able to seemingly control money in the way they see peers doing, especially online. But when we look at barriers to saving more, we come up against the wider economic context – inflation is high.” Taylor thinks it’s helpful to identify the time of day when you are inclined to go doom spending, what websites you are tempted by, and how you are feeling in those moments. He’s working on finding his dopamine hits by gamifying budgeting instead, putting a few pounds into a savings pot to reward himself for every time he resists the urge to hit buy.
Money dysphoria
Harj Gahley, 38, from Windsor, was earning nearly £100,000 in the corporate world. “I was in a good job, but it still didn’t feel like enough,” he says. “I felt like I needed more money to reach a higher status.” Online, Gahley would follow the millennial 1% on social media – businessmen such as Steven Bartlett and Gary Vaynerchuk, and influencers such as Adin Ross and Drake, who talk about betting hundreds of thousands of dollars, and winning millions. He also followed posts by seemingly ordinary people on “how to earn £5k or £10k on your side hustle”.
“I was working in the private jet industry, so that had a certain lifestyle association,” says Gahley. “I’d see people driving nice cars, wearing nice clothes. Then I’d log on to TikTok and see people having lavish holidays, wearing Rolex watches. And you look at yourself and say, ‘Why can’t I have that?’”
According to research by financial company Credit Karma, “money dysphoria” is a social-media-fuelled distortion of how much everyone else has. Online exposure to people normalising extreme levels of wealth exacerbated a gambling addiction for Gahley, leading him into £250,000 of debt.
This, he says, resulted in an attempt on his own life while his wife was pregnant with their second child, before she discovered his bank transactions and he sought life-changing help from the charity GamCare.
Through this he came to see the truth behind social media posts and realise how many people are living beyond their means. “The reality is people just get into bigger debts, more mental health problems, relationship breakdowns, because they’ve over-leveraged themselves,” he says.
Gahley is now debt free. At first he found it very difficult to avoid cues to gamble. He had to entrust all his finances to his wife. “I felt like a baby.” Now he’s enjoying watching the pennies. “My son asked me for 50p for toast at school the other day. And I thought, ‘Bloody 50p for two slices of toast, they’re ripping me off!’. I’m training myself to learn about the value of money.”
Soft saving
If a few years ago Fire (Financial Independence Retire Early) was all the rage, with millennials saving and investing hard and fast to quit work by 40, soft saving means putting money in pots for a rainy day and not worrying too much about the future.
Saving is a recent habit for Jamie Birch, 32, from Gloucestershire, who works in marketing. With rising house prices and the rapidly increasing age of retirement, like many people Birch is thinking, “What’s the point? What am I saving for?” The soft approach means focusing on the value of ring-fencing money for living in the moment.
“I have a tiny pension,” she says. “I have nowhere near enough in it. I will cross that bridge when I come to it. I have two small children and am pregnant, so I like to think maybe I’ll have a bit more disposable income in the future and now is about spending money to make memories.”
In the meantime, she saves little and often for the shorter term. Every Friday Birch “skims” her bank account to make everything end in zero. “So say I have £51.27 in my balance, I’d put aside £1.27. It feels a tiny amount, but it all adds up.” She uses the Plum app, which reads your bank account to detect your incomings and outgoings, and automatically transfers a few pounds into a separate account. “There was a point where it was taking as little as £2 a week out of my bank account because we didn’t have a massive disposable income. I don’t think I would have put £2 a week in savings, it felt so ridiculous. But actually, with some weeks earning more than others, we ended up saving nearly £500 in a year.”
One of the pots attached to her bank is labelled a “carefree account”. When it reaches £100 she’ll use it for a day out to a theme park or local farm. “If soft saving is encouraging people to put aside even the tiniest amount, that’s such a positive thing. It gets you into the habit of saving.”
Loud budgeting
“There is a big gap in how much people earn and how people are living their lives at the moment, so stigma about where you are financially comes in,” says Olamide Majekodunmi, 26, from London, who helps other young people manage their money through the All Things Money website. “But there’s nothing worse than trying to keep up with your friends when you can’t afford it.” She is proudly upfront about her finances, letting family and friends know if she doesn’t want to spend money because she’s saving for something that is important to her.
To Majekodunmi, loud budgeting means not feeling uncomfortable about telling others how you manage your finances, what your financial goals are and, potentially most awkward of all, your income. Majekodunmi and her friends have no problem asking each other what they earn: “We want to see where we should be at in terms of career progress. Maybe we need to be negotiating our salaries.”
Her friends are at the stage of trying to save for a flat deposit or to go travelling, or for a future family, and they want to support each other’s ambitions. “We’re conscious of how we spend together as a group. When I say, ‘Look, I don’t want to spend in that way’, the response is positive. The state of the economy helps: a lot of people are more understanding.”
Majekodunmi works with clients who are happy to show her the contents of their bank accounts, but when it comes to having open money conversations with their friends and family, she says they are still suffering in silence. “I don’t think loud budgeting should be classed as a trend; it’s something that no one should have any shame in doing.”
In the UK and Ireland, Samaritans can be contacted on freephone 116 123, or email jo@samaritans.org or jo@samaritans.ie. In the US, you can call or text the National Suicide Prevention Lifeline on 988, chat on 988lifeline.org, or text HOME to 741741 to connect with a crisis counselor. In Australia, the crisis support service Lifeline is 13 11 14. Other international helplines can be found at befrienders.org
