“Cash stuffing” has become a viral trend on TikTok, reaching more than 700 million views. Similar to Dave Ramsey’s envelope system, cash stuffing involves sorting your cash money into various categories in an effort to save money by avoiding overspending. While there are already many digital budgeting apps on the market, cash stuffing works for those who prefer a hands-on approach. It seems that physically sorting their cash is helping Gen Z towards financial stability.
What is cash stuffing?
Cash stuffing is a form of budgeting using physical cash. Before starting, you’ll first need to come up with a budget for how your cash is going to be allocated. Each paycheck is cashed out and then funds are sorted or “stuffed” into envelopes for different spending categories, like rent, groceries or vacation savings. Usually, the envelopes fit into a small binder, where they’re each labeled with their appropriate category. Amazon even has an array of “cash stuffing” sets available to make getting started easy. Cash stuffing is a great solution for those who have trouble with impulsive buying and overconsumption. You can't simply swipe your card anymore, instead you'll have to pull cash out of the appropriate envelope. Plus, by being aware of where each dollar is being spent each month, you’ll relieve the stress of mental budgeting.
Pros/cons of cash stuffing
Pros:
- Helps relieve stress relating to finances
- Prevents unnecessary purchases and overspending
- Makes budgeting tangible and concrete - helping you stick to your finance goals
- Helps you to be more mindful of how you're spending each month
Cons:
- Time-consuming method of budgeting
- Less protection for your money
- No interest earned on cash
- Can be more difficult to pay certain bills, like rent and utilities, with cash instead of online payments with a card
Bottom line
Overall, cash stuffing is a great budgeting option for those who prefer a hands-on approach to managing their money. This method, which is viral on TikTok, helps individuals assess their finances each month by allocating their paycheck between categories. Each category has it's own envelope, usually organized in a small binder. If you've been struggling to maintain a budget, or can't seem to figure out where your money goes each month, this method could be a life-changer for your finances.
If you prefer digital budgeting, check out the best budgeting apps for 2022.
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