Koreans Beat Budget Bulge with Cash
Feb 27, 2024
Twenty-something Koreans are shunning plastic for cash in a trend that’s proving more popular and practical than other, often radical approaches to cutting costs in a challenging economy.
2022 saw the rise of the ‘no spend challenge’, which requires drastic lifestyle changes in an attempt to pare spending down to essentials-only for a week or more. Whilst far from new, it gained a fresh audience on TikTok, and Korea Herald writer Song Jung-hyun says some young Koreans took it to an extreme, trying to avoid buying food while using everything already in their homes and skipping meals.
In 2023, this evolved into people joining online communities called ‘geojibang’ (beggar chatrooms) in which users judge each other’s spending habits harshly with the goal of promoting more mindful expenditure.
Fortunately for those who found these approaches hard to maintain, cash stuffing is a gentler trend with decades-old credentials that has also gained new life thanks to social media. With this budgeting method, available money is withdrawn as cash, which is then allocated first to ‘essential’ envelopes (with labels such as ‘rent’, ‘food’ and ‘transport’) and then to non-essentials that may include luxury items, vacations or savings.
I would spend about one million won [$760 or €700] solely on food delivery apps, but after switching to cash payments, the expenditure fell almost 70 percent.
In addition to making outgoings clearly visible, cash comes with the well-researched ‘pain of paying’, referring to the discomfort people feel when handing over their hard-earned notes and coins, which is not experienced when swiping or tapping plastic. This encourages mindful spending without recourse to stern words from strangers in a chatroom.
While cashless-only businesses have increased in recent years, the Bank of Korea pushed back in late 2023 with a pro-cash campaign asking vendors to ‘please be considerate and allow people to use cash everywhere so that no one is left out.’ This will be especially welcome for citizens who depend on cash stuffing to manage their budgets, such as ‘24-year-old Kang, [who has] gone to the extent of physically cutting their credit cards in half as a symbol of their commitment.’