New data from home insurance provider Admiral paints a painful picture. Consumers don’t have an easy time with cash management practices either. The insurer warns that the popular budgeting method known as cash stuffing, which involves withdrawing cash and dividing it into labelled envelopes for various expenses, carries significant risks, especially as the holiday season approaches.
Cash stuffing is gaining popularity on social media platforms like TikTok. It’s empowering people to make more informed financial decisions. Savers deposit less cash into their bank accounts. Then they divide that money up into envelopes marked for groceries, utilities, emergency savings, and Christmas shopping. This approach sounds attractive to lots of people as a means of imposing strict budgets and reigning in spending.
Admiral’s findings show a troubling rise in cash theft claims. The insurer’s experienced a mind-blowing 77% increase in claims in just one year. The average value of each claim is £333. A particularly alarming instance discussed was a client who had two envelopes stolen en route. These envelopes contained a total of £1,700 when the customer was practicing the cash stuffing method.
Keeping a lot of cash at home isn’t safe, warned Admiral’s home insurance division. Their campaign shed light on the risks associated with storing large amounts of cash in your home. The rise in claims reflects not only the popularity of cash stuffing but the vulnerabilities it creates for individuals not adequately safeguarding their cash.
As we head towards the expensive Christmas period, the cash stuffing trend can seem appealing when it comes to controlling your Christmas spending. The greater risk of theft adds a key new wrinkle for people who might want to try it. Considerations Savers are encouraged to consider these benefits along with risks in determining how best to invest and save their money.