What is 'Cash Stuffing' and How Does It Work?

Person budgeting on laptop alongside a purple binder. — Unsplash

With virtually everything going up in cost (yes, shrinkflation and shelflation are a thing), you may be feeling the pinch to your finances personally (rest assured, you’re not the only one). With costs rising comes the pursuit of ways to spend less, save more and finally (finally!) get a handle on those finances and that ever-slippery monthly budget.

Enter: “cash stuffing.” Cash stuffing is a strategy that is quickly gaining traction among TikTokers, who swear by the method as an effective way to pay off debts, keep their budgets in check and even save for the future. (At last glance, the #cashstuffing hashtag on TikTok had more than 425 million views.)

Before the most recent bout on inflation and rising costs of living, budgets were perhaps easier to plan for. But as costs, such as gas and groceries, continue to change not just week-to-week, but even day-to-day, it becomes even more important to regularly check in on your finances.

So what exactly is cash stuffing — and how does it work?

What is cash stuffing?

@beebudgeting update on our budget binder #cashenvelopes #canadiancashstuffing #budgeting #fypシ #cashstuffing #foryoupage #cashenvelopesystem #daveramsey #budgetbinder #moneysaving ♬ Sheesh! – Surfaces & Tai Verdes

Cash stuffing is a budgeting method that uses envelopes to help you allocate cash — it’s basically about paying close attention to how much you have in your budget for various expenses, and restricting yourself to only that budget by working with cash alone (not credit cards or other credit products). If you’ve ever seen the elders in your life work with the envelope system of budgeting, this is very similar.

For many, the cash-stuffing system works because it is so tactile and visual, rather than working with numbers in bank accounts or credit cards — where it’s easy for the spending not to appear “real” and to slip away on spur-of-the-moment spends because no cash exchanged hands. And then there is online shopping, that makes the process even more invisible.

How does cash stuffing work

@beebudgeting Cash stuffing my money 💰 #moneysaving #budgetbinder #daveramsey #cashenvelopesystem #foryoupage #cashstuffing #fypシ #canadiancashstuffing #cashenvelopes ♬ In Love With You – BLVKSHP

As @beebudgeting demonstrates on TikTok above, cash stuffing employs labelled envelopes (or pouches and folders, if you prefer), and good ol’ cash. When you spend it, there is no more in that budget for this category. In this way, cash stuffing essentially forces you to live within your means, to prioritize what’s most important and to go without — when necessary (alternately, you can re-allocate your budget, based on other expenses, if possible).

Cash stuffing is also great because it allows you to plan ahead for future big purchases (be it a car, trip, holiday gifting or something else that matters to you), by allowing you to regularly deposit money in the envelope until you’ve reached your goal.

If your monthly expenses come out automatically, you may want to use cash stuffing for discretionary spending, in the way @streetcents does, below:

@streetcents Strut your stuff #CashStuffingASMR #CashStuffing #BudgetingTips #CashEnvelopes #TeenMoney #StreetCents ♬ original sound – CBC Street Cents

How to get started with your own cash stuffing system

The concept is simple, but it does take time to set up and get going. There are many different budget planners with envelopes to choose from, or you can come up with your own low-cost alternative (We recommend starting with a DIY system, and then when you’ve gotten the hang of it, and perhaps even saved towards the purchase, to switch over to a sleeker setup as reward. This also gives you motivation and incentive to stick to the system.).

As an example, here is one way you could set up your own cash-stuffing system:

Assess you income. Look at your monthly or bi-weekly income and establish how much money you’ll have coming in.
Make a list of your expenses. Next, review what expenses you have coming up, prioritizing big, necessary expenses over discretionary spending (in other words, need-to-haves vs. nice-to-haves). Keep this list as simple as possible, especially to start.
Prioritize your expenses. List these in order of priority for you (i.e. rent, food, transportation, utilities, etc.).
Do the math. Calculate what you’ll need to pay for each category for the set period.
Determine your amounts. Then, allocate a portion of your income for each category, accordingly.
Get your envelopes ready. Prepare envelopes or folders clearly labelled with each category.
Take out the cash. Withdraw cash from your account once the money is there.
Fill your envelopes. Put the budgeted amount in each envelope/folder. This is your budget for the set period for this category.
Track, track, track. Track any withdrawals from each envelope, noting in detail what went out and when (or what went in if you have multiple sources of income). This step is important because cash isn’t tracked the way your online account is, and it’s easy to forget where or when that money was spent.
Review regularly. Check in and reassess how accurate your budgeting predictions were — and what you need to adjust based on current (or anticipated) prices for the next round.
Choose the right storage spot. Lastly, be mindful of where and how you keep cash, since it’s harder to keep track of. If you have a safe, this would be a good spot to store your envelopes/folders.

If you find that you’re dealing with overspending, try to focus on a single area first before moving on to additional categories. This can help the process feel less daunting.

Cash stuffing is not a cure-all

While cash stuffing doesn’t resolve issues of economic or financial insecurity, for some, it can be a useful DIY money-saving tool to help them work with what they have more thoughtfully and to curtail impulse spending. You can test it out or modify it as-needed to make it work for you and your circumstances. Either way, being thoughtful and intentional with your finances is a critical step towards financial independence and taking control of your finances.