FRIDAY, March 01, 2024
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Goodbye plastic: Cash-only trend rises as young Koreans combat overspending

Goodbye plastic: Cash-only trend rises as young Koreans combat overspending

Despite digital progress and surging online transactions, a notable consumption trend is emerging among South Koreans in their 20s and 30s, as an increasing number of them are opting to use physical cash over credit card transactions in their daily lives.

Referred to as "cash stuffing," the budgeting method involves withdrawing cash from a bank account and segregating it into designated envelopes for different categories, such as groceries, travel, dining out and more.

Gaining popularity among young those seeking to curb overspending and counter the "cashless effect" — a tendency to make more purchases when payments are less tangible — the method restricts spending to allocated amounts in a physically tangible way.

"I would spend about 1 million won ($770) solely on food delivery apps, but after switching to cash payments, the expenditure fell almost 70 per cent,” 32-year-old Kim Ji-hye told The Korea Herald.

“Previously, most of my earnings would go to paying my credit card bills, but since starting cash stuffing, my savings went from zero to 1.2 million won every month,” said Yang Eun-bi, a 33-year-old professional web designer.

Meanwhile, some, like 24-year-old Kang, have gone to the extent of physically cutting their credit cards in half as a symbol of their commitment.

However, given the surge in the number of shops going cashless these days, a question arises: "Is it even possible?"

According to Choi Su-ji, a YouTuber who regularly publishes videos on her budgeting efforts, it is precisely the inconvenience that helps tackle unnecessary expenditures.

"You have to call employees every time you need to place an order at a shop. Given the inconvenience, I gradually shifted to cooking at home."

"But, with cash, it is hard to count on delivery staff having exact change, so I would travel to the shops to pick up the food. This extra travel I have to make made me think twice before spending."

Moreover, amid soaring inflation and stubbornly high inflation rates, economizing has no longer become just a choice for many young Koreans. This trend comes as one of many in a string of various belt-tightening measures adopted by struggling young people in Korea.

For example, the no-spend challenge, which emerged last year, saw many skipping meals or surviving solely on food from the refrigerator at home.

More recently, young people began to scrutinize each other's spending habits in public chat rooms called "geojibang." or beggars' rooms, on KakaoTalk. In one such online community birthed this year, participants would refer to themselves as beggars and share their lists of expenditures -- along with harsh words of encouragement to promote stricter saving.

Song Jung-hyun

The Korea Herald

Asia News Network

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