What is Cash Stuffing? #cashstuffing

Have you heard of this latest TikTok “craze” called cash stuffing?

The term is new but the strategy isn’t – even if you’ve never heard of cash stuffing, chances are you’ve heard of the strategy.

It’s been around for ages and it’s a solid approach, it just hasn’t gone viral because no one came up with a clever name. 🙂

Table of Contents
  1. What is Cash Stuffing?
  2. What are the benefits of Cash Stuffing?
  3. What are the drawbacks of Cash Stuffing?
  4. Is Cash Stuffing Worth it?

What is Cash Stuffing?

Cash stuffing is a catchy name for envelope budgeting. Envelope budgeting is where you budget with the use of envelopes to represent different categories of expenses like groceries, dining out, “fun money,” gifts, debts, and more. You should also include envelopes for saving like for a sinking fund or retirement or future needs, like a car.

It’s meant to cover expenses that tend to change from month to month, not fixed expenses like your rent or mortgage.

As you get paid, you take the cash and “stuff” it in the various envelopes.

When it’s time to spend, you spend cash from the envelopes. By having to spend cash, which feels more real than with a credit card, it can help you spend less.

If you get paid a bonus or overtime, then you can take the extra cash and stuff it into the envelopes however you decide.

The idea behind this strategy is that you can’t go into debt if you stick to a cash budget, since you aren’t borrowing money through credit cards or other ways. If you have extra cash at the end of the month, you can either sweep it into your savings or let it ride.

In the end, it’s about making the system work for you and not about being perfect.

What are the benefits of Cash Stuffing?

The system is more cumbersome than using a credit card but that’s the whole point. By putting yourself closer to your money, it helps you become more intentional with your money. It’s easy to swipe with a credit card, it’s harder to pull cash out of an envelope or binder.

It also helps you budget because you are more aware of your spending. Since you have limited amounts of cash in each envelope, you are aware of how much is left every time you spend.

If you do overspend from one envelope, you’re put to the decision of where that money is coming from. Do you pull it from another envelope or do you reverse the transaction? Maybe you wait another pay cycle before you buy that items or service.

Cash stuffing can feel like a game, since you are moving cash around, but that’s a positive association to have with your money. It can also be very freeing because you can spend from envelopes without any guilt – you’ve budgeted, you’ve set aside what you want to save, and now you can reap the rewards.

What are the drawbacks of Cash Stuffing?

Well, it’s more cumbersome. 🙂

Since you are spending cash, you don’t get the take advantage of any credit card rewards you would have earned if you use a credit card. If you are carrying credit card debt, it’s better that you charge less because you’re paying interest in that debt and no amount of rewards will offset that.

You also are going to be carrying around a bit of cash, which can be uncomfortable. One solution to this is to only carry a limited amount in each envelope when you are going out. There’s no need to carry the entire thing.

Cash stuffing isn’t a perfect solution that, when you use it, prevents you from overspending. It can help prevent you from overspending but it’s still your cash and no one can stop you from pulling from different envelopes.

Is Cash Stuffing Worth it?

If you struggle with budgeting and spending less than you make, it’s worth a try. I think everything is worth trying if you haven’t found a solution yet. Sometimes it comes down to a system that resonates with you.

Personally, envelope budgeting and cash stuffing were too much hassle for me. That said, I was the type of person who tracked every last penny in an Excel spreadsheet (then graduated to Mint). I know a lot of people (practically everyone actually) who would hate to track their budget in a spreadsheet… but I’m a weirdo like that.

If Cash Stuffing sounds like something that is fun and would work, give it a try.

People will try to sell you all kinds of envelopes and binders and all that – don’t do that yet. It just takes a few envelopes to get started and you want to see if you’ll stick with it. If you stick with it, get yourself one of those little coupon organizers to upgrade your Cash Stuffing arsenal.

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About Jim Wang

Jim Wang is a forty-something father of four who is a frequent contributor to Forbes and Vanguard's Blog. He has also been fortunate to have appeared in the New York Times, Baltimore Sun, Entrepreneur, and Marketplace Money.

Jim has a B.S. in Computer Science and Economics from Carnegie Mellon University, an M.S. in Information Technology - Software Engineering from Carnegie Mellon University, as well as a Masters in Business Administration from Johns Hopkins University. His approach to personal finance is that of an engineer, breaking down complex subjects into bite-sized easily understood concepts that you can use in your daily life.

One of his favorite tools (here's my treasure chest of tools,, everything I use) is Personal Capital, which enables him to manage his finances in just 15-minutes each month. They also offer financial planning, such as a Retirement Planning Tool that can tell you if you're on track to retire when you want. It's free.

He is also diversifying his investment portfolio by adding a little bit of real estate. But not rental homes, because he doesn't want a second job, it's diversified small investments in a few commercial properties and farms in Illinois, Louisiana, and California through AcreTrader.

Recently, he's invested in a few pieces of art on Masterworks too.

>> Read more articles by Jim

Opinions expressed here are the author's alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.

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