As inflation continues to put pressure on household budgets, more Canadians are turning to a low-tech solution to take greater control over their finances: using cash.
Once considered outdated in an increasingly digital economy, the use of physical currency, especially in personal budgeting, is making a comeback. A practice popularized on social media platforms like TikTok as “cash stuffing” involves dividing money into labelled envelopes for specific expenses such as groceries, gas, and entertainment. Though it may sound like a financial throwback, the approach has caught on with Canadians seeking concrete ways to handle their money.
Serge Robichaud, a New Brunswick financial advisor, says the interest in analog tools reflects a response to today’s financial pressures. “The digital age makes spending almost too easy. When you tap your card or click to buy an item, it creates a disconnect. Cash, by contrast, has weight, and it forces you to be intentional with your spending,” he says.
This resurgence of interest in the cash envelope system coincides with Canadian households being hit with financial stressors. A report by Statistics Canada reveals that the average household debt-to-income ratio reached 172.83 in the final quarter of 2024. That means for every dollar of disposable income, Canadians owed $1.72 in debt. Simultaneously, inflation, although easing from its 2022 peak, has kept the prices of essentials like groceries and housing elevated. With interest rates remaining high, disposable income is shrinking.
Though digital budgeting apps are still widely used, a 2024 Angus Reid survey reported that 34% of Canadians under the age of 35 expected their financial situation to worsen in 2025. Younger Canadians are also flocking toward the envelope budgeting system, a trend that may seem counterintuitive in the digital-first age.
Robichaud believes this isn’t simply a trend for people who are chronically online. “I’ve had 60-year-old and 20-year-old people asking about cash systems. It’s not an age thing. People are sick and tired of feeling their money is draining, and they want more control of their finances,” he says.
In practice, people are only allowed to spend what they have in hand by the cash stuffing technique. When an envelope is empty, that category has no more money to spend until the next pay period. Critics say it restricts flexibility and fails to help with credit-building, while advocates say it helps cut through cycles of impulsive spending and obliviousness.
“It’s not an answer to every financial problem, but for someone who is struggling with overspending, it can be a powerful first step. The discipline it offers is not easily transferable to an app,” says Robichaud.
The movement also reflects a deeper psychological change: the yearning to be financially stable. In a world of credit cards, buy-now-pay-later platforms, and mobile wallets, cash provides a kind of tactile reassurance. Yet while cash usage for day-to-day transactions has decreased overall, research conducted by the Bank of Canada suggests Canadians still carry an average of $140 in their wallets.
Financial educators have taken note. Community groups and financial literacy programs nationwide are reintroducing physical budgeting tools to their curricula, especially for newcomers and younger adults who are navigating their first independent budgets.
“Cash is not something that has anything to do with being bad at money, it has to do with being honest with yourself. There’s no buffer. You watch the cash come out of your hand. That acknowledgment can be a first step to healthier habits,” says Robichaud.
That said, envelope budgeting isn’t suitable for everyone. It’s cumbersome in a society where online subscriptions and digital payments are unavoidable. Some experts suggest that you adopt a hybrid approach: Use cash only for discretionary spending and continue to automate your fixed expenses through traditional banking.
If Canadians want to give the method a try, Robichaud says small steps are best. He advises choosing one or two categories where you’re likely to overspend and designating an envelope for each.
As tools for personal finance become more intricate, the rise of analog solutions like envelope budgeting serves as a reminder that, on occasion, the oldest methods can be some of the most effective. In a culture where spending is frictionless, introducing a little friction might be exactly what Canadians need.
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