Zahra Damji and Eleanor Hammerton

The best purchases in life are free. How’s that possible, you ask? Well, pay with cash of course! The idea that anything bought with cash is free because the money is spent when you make the withdrawal, not when you make the purchase, is one example of the TikTok phenomenon #girlmath. This belief, which is not gender or age specific, contradicts headlines that suggest people are switching to cash to help them with budgeting. We draw on an online survey of UK adults conducted by the Bank of England in 2023 to explore how people budget in an increasingly digital world. We find that, rather than turning to cash, contactless is king when it comes to budgeting.

Looking to TikTok for budgeting help, you’ll find different approaches to budgeting. One of the most popular trends is #cashstuffing, which takes a different view to girl maths. The practice of cash stuffing is where you put cash into separate envelopes for different categories such as ‘bills’, ‘groceries’, and ‘days out’. This is one of the many benefits of cash: due to its tangible nature, it allows users to be more aware of when they are spending and helps limit spending to the amount in their wallets.

But which of these is more on the money? Are you more likely to pause and think about the necessity of that second half-caff extra hot oat caramel latte of the day if you first need to take cash out of your ‘eating out’ envelope, or does having cash on you just make it easier to use the girl math’s justification for spending it? 

The results are in…

The Bank of England’s online panel survey of 1,006 UK adults was conducted over January and February 2023. Results were weighted to be nationally representative across gender, age groups, region, and employment type. Respondents were asked several questions about their payment preferences, including which payment method they found easiest to use when budgeting.

Of course, there are some limitations with the survey data: the sample size was relatively small and the survey was online only. We know from previous surveys conducted by the Bank that telephone respondents tend to be higher cash users than online respondents, which will likely impact which payment method respondents find easiest to budget with. As we used a panel survey, there will also be selection bias since all our respondents had signed up to be on an online panel and so may not be representative in terms of digital skills and attitudes towards online banking. However, given that the survey met demographic quotas and the results were weighted we are confident that the results are broadly reflective of UK adults. 

We expected that most survey respondents would say cash is the easiest payment method to use when budgeting but contactless came out top.

Chart 1: Responses to the survey question: Which payment method do you find easiest to use when budgeting?

Source: Bank of England Payment Preferences Survey January 2023.

These results are broadly consistent with findings from focus groups conducted by the Bank in December 2022, which showed that people were polarised on the usefulness of cash for budgeting. Some low-cash users reported finding it hard to know how much they are spending if there are no records in the form of banking app notifications or bank statements.

The survey found that contactless was the most popular answer across all age groups but the gap between contactless and cash was smaller for older age groups.

Chart 2: Payment method easiest to use when budgeting split by age

Source: Bank of England Payment Preferences Survey January 2023.

The survey asked the same people which payment method they generally preferred for everyday spending. Comparing that to the results from the question above about which payment method people found easiest to use when budgeting, we see that, across all age groups, more people (26%) found cash easiest to use when budgeting than those (14%) who preferred cash for everyday spending.

Chart 3: Percentage of respondents who selected cash as their answer to each of the following questions: 1) Which payment method do you find easiest to use when budgeting? 2) Thinking about the everyday payments you make, for example in shops, on transport, buying food etc. what is your preferred method of payment?

Source: Bank of England Payment Preferences Survey January 2023.

Drawing on the survey results, and previous insights from focus groups, we think that the reason some people find cash easiest to use for budgeting but do not prefer to use it for everyday spending is because cash introduces friction when making payments. Getting cash out of your wallet (or ‘eating out’ envelope) and handing it over makes people more aware that they are spending, relative to making contactless payments where someone might mindlessly tap their card on a reader. While that friction is helpful if you are trying to budget, if you aren’t trying to budget the friction is a disadvantage, slowing down your purchases.

Contactless reigns supreme for budgeting

Given reported benefits of using cash for budgeting, why did more people in the Bank’s survey overall say that contactless is easier to use than cash when budgeting? Is there something in the idea put forward by some, including those behind the #girlmath trend, that cash, far from helping us budget, is instead ‘free’ money we can spend without guilt?

We think this might be due to different views on what budgeting means. For some, it means cutting back on impulse purchases or keeping spending below a certain level. It’s easy to see why cash is helpful for this type of budgeting as you can only spend the amount of cash you are carrying.

But for others, budgeting is about keeping track of their income and spending. The inherent privacy of cash makes it much harder to account for each pound spent relative to digital payment methods such as contactless, which also has the additional advantage of speed over chip & PIN.

People who prefer to pay with contactless may also be using banking apps, which offer different features to help with budgeting, for example showing you how much you have spent in different categories and allowing you to set and track monthly spending for different categories. Some also allow you to separate money into different pots within the app, essentially a digital form of cash stuffing.

Some banks even provide a review of your spending at the end of the year telling you the businesses you frequent the most and where you rank among other bank customers. After all, for some of us, nothing makes you realise you are overspending like learning that you rank among the top 5% of your bank’s customers in terms of Pret spend, or just how much of your annual salary was spent on Taylor Swift tickets.

For anyone who is using their banking app or bank statement to keep track of their money, it is understandable that they see the money as ‘gone’ when it is withdrawn, rather than when it is subsequently used to make a purchase. It follows that if they do also have cash, any purchase made with it feels ‘free’ because it doesn’t change the value in their bank account. So, when it comes to consumers’ payment preferences for budgeting, it appears that girl maths does add up after all and cash stuffing can get stuffed.

Final (bank)notes

Contrary to prevailing assumptions, cash is not the best budgeting tool for everyone. Different beliefs about money and budgeting, and the features of each payment method, mean that people find different payment methods easiest to use when budgeting. It is therefore beneficial for people to have choice in their use of payment methods so they can manage their money in a way which works best for them.

Trends on TikTok shouldn’t be overlooked as they can help us interpret survey data by giving us an insight into how people think about and use money.

Zahra Damji and Eleanor Hammerton work in the Bank’s Future of Money Division.

If you want to get in touch, please email us at bankunderground@bankofengland.co.uk or leave a comment below.

Comments will only appear once approved by a moderator, and are only published where a full name is supplied. Bank Underground is a blog for Bank of England staff to share views that challenge – or support – prevailing policy orthodoxies. The views expressed here are those of the authors, and are not necessarily those of the Bank of England, or its policy committees.


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