What Is Cash Stuffing and How Does It Work? A Comprehensive Guide

With more than 386 million views on TikTok, a new budgeting system is taking over the internet.

Except, it is not really new.

Cash Stuffing is a viral budgeting system, which is the revival of the old-school budgeting system that has been here for decades, that involved cash and envelopes; the envelope budgeting system.

The rebranded budgeting system helps people to budget and save their money by “stuffing” their money in envelopes. Do you think this sounds a bit stranded? Don’t worry. We will explain to you the nook and crook of Cash stuffing.

An increasing number of TikTok users have sworn to cash stuffing and have claimed that this method has helped them get control of their finances, come out of debt, and collect savings.

Now we shall explore everything about cash stuffing and figure out if it is the correct budgeting method for you.

What Is Cash Stuffing?

Cash stuffing is the twin Gen-Z sibling of the old school Envelope Budgeting system. Like the envelope system, cash stuffing involves stuffing cash into multiple envelopes, each of which carries a label for specific budget categories like rent, groceries, gas, saving, etc.

Based on your spending and saving goals, you are to decide what amount of cash goes in which envelope.

For example, if you are allocating $200 as gas money, you will only be paying for gas with the money allocated in the labeled envelope. Also, you must refrain from using extra money if the cash in any envelope expires before the net budgeting period.

This method operates totally on cash, hence reducing the use of debit and credit cards. This helps users to keep track of their spending and also eliminates the urge to impulse buying.

How To Start Cash Stuffing?

If you search Cash Stuffing on TikTok or even YouTube, you will be bombarded with videos of cash stuffing that are indeed satisfying to watch. The creators of these videos are primarily women who thoroughly count the cash and palace it in colorful and attractive envelopes that are neatly labeled with their individual budget categories.

The videos are aesthetically pleasing to watch and have an addictive nature to them. Hence, the immense popularity.

As satisfying as they are to watch, cash stuffing has a lot more to it than just stuffing money in aesthetic-looking envelopes. You have to be quite disciplined and committed in order to make it successful.

Here are some ways to start practicing cash stuffing for beginners :

Start With Determining Your Budget

The ritual of cash stuffing begins on your payday. When you receive the paycheck, deduct any fixed expenses there are. These are the expenses that do not change on a monthly basis, like rent or any mortgage payments, insurance, etc.

Once the fixed expenses are subtracted, withdraw whatever you are left with in cash. This amount will then be divided between the budgeting envelopes.

Figure Out Your Spending Categories

Every single cash-stuffing envelope will represent an individual budget category. Your lifestyles, needs, and saving goals will decide the envelope categories that you will have to make.

You can refer to these below-mentioned cash stuffing categories if you are new to a budgeting system.

Necessities

These envelopes must receive the utmost priority while you are distributing the budget, as they are those expenses that will help support your daily needs.

They mainly are:

• Gas
• Groceries
• Car maintenance
• Tax
• Child care
• Debt reay
• Home maintenance

Saving Goals

You can either keep it simple by making only one envelope as “Savings,” or you can create multiple ones, each of which has the exact purpose of saving cash.

You can label the savings envelope somewhat like this:

• Vacation
• Wedding fund
• Emergency fund
• Christmas gifts

These are only examples, but you can always create savings envelopes based on your savings needs.

Discretionary Expenses

These are primarily nonessential expenses that you need as a source of entertainment in your life. Although they are irrelevant, they must not be avoided entirely but must only be allocated once you are done putting the money in the essential categories.

They are:

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

Fill Your Envelopes

Stack the cash based on your denominations- one dollar, five, tens, and so on. This will help you distribute the cash more easily in the respective envelopes.

Now comes your favorite and most awaited part that you saw on those aesthetically pleasing TikTok videos. You will now put the cash into individual stuffing envelopes, each labeled with a different budget category.

The amount that you stuff in an individual envelope will be the only amount that you get to spend on that particular category for an entire budgeting period. To successfully do this, try referring to the amount that you have spent on it in the previous month.

If you are estimating the budget for your gas money, calculate the average amount of money that you have spent on gas in the past few months. You must also check for an increase or decrease in gas prices before allocating the amount for the “gas envelope.”

Only Spend the Amount Allocated In Each Envelope

Hopefully, you remember how I mentioned that you have to be extremely disciplined and committed in order to successfully maintain a budget system. This is the reason why- you are only allowed to use the cash that is allocated in a specific category and absolutely nothing else.

You do not add extra money or even touch the money in the other categories, as that will ruin the whole foundation of the budgeting system. Also, that will cause an imbalance in the cash that is allocated in the other envelopes.

If you run out of money for a particular category, you will have to sacrifice your spending on it till the next budgeting cycle is created.

Replenish Your Envelopes

People usually refill their envelopes and revisit their budgets on every payday, whether it’s monthly or bi-weekly.

Suppose there is money left in one or multiple envelopes; congratulations! Reward yourself with a small treat, or just treat the leftovers as savings or repaying debts.

What Are The Benefits Of Cash Stuffing?

If you are just like one of us and struggle every day because of your impulsive buying and constant urge for compulsive spending, cash stuffing is a blessing in disguise as it is bound to take control over all your finances.

When you choose to pay with cash, you stay more aware of the money that you are spending. The reason? It is the tangibility of cash. It is because you can hold it in your hands, and therefore, it gets tougher for you to part ways with it. As a result, you think twice before spending it unnecessarily.

On the other hand, if you are using a credit card, all you have to do is swipe. Based on research, the willingness of a shopper goes up by 100% while using a credit card instead of cash.

Cash stuffing also makes you stick to a budget and start to prioritize allocating money for necessities like bills, rent, or groceries. Since every single envelope has a designated purpose, it lets you spend thoughtfully on the things that align with your personal goals.

When you are aware of every single dollar you spend, there is less likelihood for you to do impulsive spending.

Also, the ritual of replenishing all your envelopes on a monthly or bi-weekly basis helps you to go over your budget and saving goals alongside all your finances. By doing this, you can develop healthy financial habits and help to relieve your financial stress as you do not have to spend energy on doing a mental accounting each month. You will have a detailed record of when and where your money is getting spent.

Is Cash Stuffing A Correct Decision For You? 

Cash stuffing is only a correct decision for you if you thoroughly struggle to control the way you spend or the way you swipe your credit card. If you can avoid using a credit card and only stick to paying with the cash that you have allocated in each envelope, you can prevent yourself from getting weighed down due to multiplying credit card debts.

But you must know that this budgeting system is not the right fit for everyone. While the entire society is going cashless, it is not practical enough to rely on cash to pay for each of your purchases.

If you’re following the cash stuffing rule and do not have the respective envelope with you, you will not be able to buy what you intended to, no matter how urgent it is. For example, if you go to the station and forget to carry the envelope allocated for gas money, you will have to rush back home to get it, which does not sound very feasible to do.

Another challenge that cash stuffing poses is the risk of safety. It might not be the best decision to carry wads of cash along with you, especially when the crime rates are going up so high. If anything goes wrong, you will be totally out of cash for the rest of the month, which is impossible to live like. Therefore, keeping money in a bank is always the safer option.

Speaking of banks, you just know that the envelope that you labeled as “saving” is just as same as hiding cash under a mattress. You must own the chance to gain interest in your money and let it grow. If you don’t, it will eventually lose value over time, and it’s not very wise to do so, especially when inflation rates are at a soaring high.

Alternatives Of Cash Stuffing

If you are more comfortable creating a budget online, you can absolutely refer to the cash stuffing concept and give your own digital twist to it. Many budgeting apps and personal financing software are available for you that will help to make a custom budget that will directly link to your bank account.

For example, Mint, an online budgeting app, keeps track of your spending and lets you choose custom budgeting categories, creates digital cash envelopes, and eliminates the need for you to carry cash with you every time you leave the house.

Frequently Asked Questions!! (FAQs)

Wrapping Up Cash Stuffing

The newly reinvented envelope budgeting system, which has now been called Cash Stuffing, has benefited countless TikTok users across the globe to gain control of their finances and be at par with the rise in the cost of living.

So, are you considering trying cash stuffing? Well then, grab yourself a marker and a few envelopes, and you will be all set. If you are planning on getting more creative with it, you can definitely get your hands on some fancy cash-stuffing templates or cash-stuffing binders.

Also, just keep in mind cash stuffing is not the right fit for everyone. It may not be the correct choice for you either. If it doesn’t cater to your needs, you can definitely try other budgeting methods until you find the one that is the right fit for you.

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