*Items marked with an asterisk are affiliate links, which means I make a small commission at no cost to you. Thank you for supporting The AC Studio!
You've probably seen the videos of people placing cash into envelopes or folders with labels and are wondering ... wtf is that for.
Well, here's the gist of it.
What is Cash Stuffing?
Cash stuffing is a budgeting system designed to help you spend money more intentionally (on purpose and on your schedule).
An envelope system of cash stuffing is commonly used where funds for each budget category are housed in a designated labeled envelope, ie. rent, groceries, gas, etc.
At a pre-determined time (1st of the month, every Monday, etc.), you will make a trip to the bank/ATM and withdraw the amount of cash you need to fill your envelopes. Use Teller Slips to make these trips easier on you and your bank teller.
Envelope Styles
Envelope styles will vary, but you don't need to get fancy. However, the "fancy" can help with motivation, and if you're sharing on social media, it will depend on the aesthetic you want.
- Regular white mailing envelopes, labeled on the front
- Expanding folder with labeled tabs like this one*
- Index card system like this one*
- Binder or book envelopes like our Custom Cash Envelopes or Custom Window Cash Envelopes
- Plastic zip envelopes like these*
How to use the cash stuffing budgeting system for to get your finances in order
- Decide on a system like one mentioned above or something you've come up with - whatever you think will work for you.
- Determine your budget categories and amounts for each category.
- Label your envelopes/containers.
- Place the dedicated amount for each category in the envelopes.
- To pay for items in each category, remove the amount from the envelope.
- Update your trackers (if using).
- Check periodically to ensure you are staying on budget. Plus points if you're under budget.
- Make adjustments if needed, but try your very best to stick to your plan.
- Repeat periodically, usually each pay period or monthly.
Benefits of Cash Stuffing
Spending discipline. Money tends to disappear when you're swiping your debit card, but when you have the dedicated funds in front of you, you become more conscious of your money.
Organization. You have already determined what you are spending for a specified timeframe, and as you become more in-tune with your expenses, you will be better able to comfortably manage your finances. You'll know exactly what you can and cannot afford at that point in time, and it makes decision-making more simple.
Planned large expenses. Some things like taxes, down payments, car maintenance, etc. are less stress-inducing if you've already set aside funds for those expenses.
Less financial anxiety. A cash system encourages you to come face-to-face with your financial situation more frequently. You are not going about your day-to-day not knowing what you have on-hand. It's already planned, organized, and systemized, so you don't have to worry about it.
However you choose to go about using the cash envelope system, remember this: You are in control. Your money works for you, not the other way around.
If you have any questions, feel free to reach out in the comments, our Contact Form, or on socials!
Happy budgeting!
