Cash Stuffing: What Is It And Can It Help You?

With over 368 million views and counting, a new way to budget money is taking TikTok by storm.

Except, it’s not new at all.

The viral TikTok budgeting method known as “cash stuffing” is a revival of an old-school budgeting system that’s been around for decades: the envelope system. The newly rebranded cash stuffing method helps people budget and save by “stuffing” money in envelopes. If this sounds a bit strange don’t worry, we’ll explain exactly how it works.

A rising number of TikTok users swear by this method, saying it’s helped them take control of their finances, clear their debt, and accumulate savings.

Let’s explore the benefits of cash stuffing, how to get started, and whether it’s the right budgeting method for you.

What Is Cash Stuffing?

Cash stuffing is similar to the envelope method, a budgeting technique championed by personal finance guru Dave Ramsey. 

Just like the envelope system, cash stuffing is the process of tucking away cash into different envelopes labeled for specific budget categories like rent, gas, groceries, utilities, savings, and more.  

You decide the amount of money that goes into each envelope based on your spending and savings goals. For example, you might allocate $150 for gas, and $50 to your emergency fund envelope. When you need money for a specific category, you can only use the money that’s in its designated envelope and nothing more, until the next budgeting cycle. 

The cash stuffing method relies entirely on cash, removing the need for credit cards and debit cards. This helps users track their spending more easily and eliminates the temptation of impulse buying.

How Cash Stuffing Works

The videos under the popular TikTok hashtag “cash stuffing” are admittedly satisfying to watch. Users, mostly women, meticulously count their cash and place it in colorful envelopes, neatly labeled with their respective budget categories.

It’s no surprise this budgeting method exploded in popularity: the videos are usually aesthetically pleasing and have an almost addictive quality to them. 

While cash stuffing videos are satisfying to watch, there’s a lot more to it than putting cash into pretty envelopes. Cash stuffing requires self-discipline and commitment to work. Here’s how to do it: 

1. Determine your budget

The cash stuffing “ritual” begins on payday. When you receive your paycheck, subtract any fixed expenses. Fixed expenses are costs that don’t change from month to month, like rent or mortgage payments, car payments, insurance, and utilities. 

Once you subtract your expenses, withdraw whatever’s left in cash. This amount will be divided among different budgeting envelopes, as we’ll see below. 

Some people choose to withdraw their entire paycheck and use envelopes even for their fixed expenses. While it works for some, it can be cumbersome, especially since a lot of these bill payments are electronic or automated, eliminating the need to put them in envelopes. 

2. Figure out your spending categories

Each cash stuffing envelope represents a different budget category. The categories you choose will depend on your needs, lifestyle, and savings goals. Here are some of the most popular categories among cash stuffing aficionados on TikTok, to help you get started: 

Necessities – these envelopes should be prioritized when you’re distributing your budget, as they’re important expenses you have to pay: 

• Groceries
• Gas
• Car maintenance and repairs 
• Taxes 
• Child care 
• Debt repayment 
• Home maintenance 

Savings goals –  you can choose to keep it simple with an envelope labeled “Savings” or have multiple savings envelopes. Here are some ideas: 

• Wedding fund 
• Vacation
• Emergency fund  
• Christmas gifts 

Discretionary expenses – these are nonessential expenses, but that doesn’t mean they shouldn’t be considered once you allocate money towards essential categories. 

• Eating out
• Entertainment 
• Beauty & haircare
• Gifts 
• Shopping 

While everyone will have essential cash stuffing categories like gas and groceries, other envelopes will look different from one person to the next. Think about the categories most important to you when you start creating your envelopes. 

3. Fill your envelopes

Divide your cash into stacks based on denominations — one-dollar bills, fives, tens, twenties, and so on. This will make it easier to distribute the amounts into their respective envelope.

Now comes the part you’ve seen on every cash stuffing TikTok video: you get to put the cash into separate cash stuffing envelopes, each marked with a different budget category.

The amount of cash you “stuff” into each one depends on your budget and spending goals for each category. For example, to estimate how much cash to deposit in your envelope labeled “gas”, look at the average amount of money you’ve spent on gas in the last few months. Some envelopes will get less cash than others if your goal is to curb your spending in that category. 

When in doubt, follow the 50/30/20 rule. This budgeting guideline allocates 50% of your cash to needs like groceries or child care, 30% to wants like eating out, and 20% to financial goals like savings or debt repayment. 

People who use the cash stuffing method keep track of their budget using a notebook. Writing down your expenses and savings helps you organize your spending and track your progress.

4. Spend only what’s in each envelope

Remember how I mentioned you needed discipline and commitment for this to work? Here’s why: you’re only allowed to use the cash in each envelope for that specific category and nothing else. For example, when you pay for groceries, you can only pay for them from your designated “groceries” envelope. 

If you run out of cash in one envelope, you can’t “borrow” from a different one. You’ll have to cut back on spending and make some sacrifices until the next budgeting cycle. 

5. Replenish your envelopes

People typically replenish their envelopes and revisit their budget every payday, whether that’s bi-weekly or monthly.

If you have money leftover in an envelope at the end of a budgeting period, rejoice! You can either reward yourself with a treat or put the leftover money towards a goal like savings or repaying your debts. 

The Benefits of Cash Stuffing

Paying for everything in cash makes you more aware of the money you’re spending. Cash is tangible, and parting ways with makes you think twice about what you’re spending it on. A credit card, on the other hand, is far too easy to swipe. Research done by Duncan Simester and Drazen Prelec of MIT found that shoppers’ willingness to spend goes up by 100% when using credit cards instead of cash. 

Cash stuffing also helps you stick to a budget and prioritize allocating money towards necessities like rent, bills, and groceries. Since each envelope has a designated purpose, it helps you to spend mindfully on things that align with your goals. When you’re intentional about each dollar you spend, you’re less likely to waste money on unnecessary things. 

The monthly or bi-weekly ritual of replenishing your envelopes gives you a chance to revisit your budget and savings goals, and go over your finances. This helps you develop healthy financial habits and relives financial stress because you don’t have to waste energy doing mental accounting every month. You know exactly what bills you’ve paid and where your money is going. 

Is Cash Stuffing Right For Me?

Cash stuffing is especially helpful for people who struggle to control their spending and credit card usage. Avoiding credit card use and only spending the cash you have available in your envelopes prevents accumulating credit card debt. 

But this method may not be the right fit for everyone. Relying on cash to pay for everything in an increasingly cashless society is not exactly practical. If you’re at the grocery store and realize you forgot your envelope, you need to go back home and get it, according to cash stuffing rules. 

Another cash stuffing challenge is the safety aspect. Some people are not comfortable carrying around envelopes full of cash every time they leave the house. If anything happens to it, you’re out of luck. Keeping your money in a bank account is a much safer option, as it’s insured by your bank. 

Speaking of bank accounts, having a cash “savings” envelope is the equivalent of hiding your cash under a mattress. Not giving your money a chance to earn interest and grow causes it to lose value over time, especially when inflation has soared to 8.5%.    

Cash Stuffing Alternatives

If you prefer to budget online, you can take the cash stuffing concept and put a digital twist on it. Budgeting apps and personal finance software like Mint or You Need A Budget can help you create custom budgets and link directly to your bank accounts. 

Mint, for example, tracks your spending and allows you to choose budgeting categories, mimicking cash envelopes without the need to keep and carry cash. 

Get Started With Cash Stuffing 

The newly rediscovered envelope system, now rebranded as cash stuffing, has helped countless TikTok users take control of their finances and keep up with the rising cost of living. 

Are you thinking of giving cash stuffing a try? Get yourself a few envelopes and a marker and you’re good to go. If you want to get more creative and have some fun with it, look for cash stuffing templates or fancy cash stuffing binders on websites like Pinterest or Etsy.

And remember, if it’s not the right fit for you, there are many other budgeting options out there you can try until you find the one that’s just right. 

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