"Cash Stuffing": The Envelope Method For Saving Money

What is cash stuffing?

“Cash stuffing” has been exploding on social media lately, so it’s impossible to ignore it. At the same time, many of us are suffering from inflation and are looking for ways to save money 😅. So what does this method involve? It involves putting cash into envelopes for different spending categories.

So when I say envelopes, they’re more like little transparent pouches attached to a folder, like in this report on RTS.

Whatever the case, the principle is to avoid financial stress by withdrawing your salary in cash and budgeting for it in categories. This gives you a clearer picture of what you have available and helps you avoid unexpected expenses. So it inspired me and I decided to try out cash stuffing for a month 👀.

How can you manage your budget with envelopes?

How does cash stuffing actually work? It’s simple: at the beginning of each month when your salary comes in, you have to decide what budget you’re going to allocate to each category: rent, bills (electricity, internet, phone charges, etc.), shopping, outings/leisure activities, savings and also the unexpected.

Of course, we make categories according to our needs. Once we’ve decided on these amounts, we withdraw the money from our account and divide it between the envelopes 💵. I won’t give the breakdown I made, as my salary doesn’t represent the average for the population. However, here’s an example based on a salary of $1600 for a single person (I took this model and adapted it to my salary):

• Rent: $600,
• Bills (electricity, internet, phone): $150,
• Food shopping: $250,
• Transport (transport pass, petrol): $100,
• Leisure activities: $150,
• Unexpected: $50,
• Savings: $300.

👉 Every time we need to spend money, we take the cash from the corresponding envelope. If we spend all the money in the envelope before the end of the month, we know we’ve exceeded our budget for that category, and we either have to reduce our spending or transfer money from another envelope.

The advantages of “cash stuffing”

So I tried this technique, which took me out of my comfort zone. And what did I think 🤔? I’ll tell you how I felt about it, starting with the advantages.

Concrete visualization of your money

I’d say this is the biggest advantage, because when you take your money out in cash, you become aware of its value. You hold it in your hand, touch it and see how much you’ve spent and how much you’ve got left. You have the note in your hand, and you see it disappear when you make the purchase, so it’s much more tangible than a contactless payment 💳.  Personally, it’s helped me to make more informed decisions, like not making unexpected (and often unnecessary 🤐) purchases at Ikea (yes, I have a big soft spot for interior design 😅).

Better financial discipline

Another advantage of this type of spending is that you need to plan your spending in advance and stick to the limits you’ve set yourself. It’s a big commitment, and you can’t make excuses like “it’s fine, there’s still money in the account anyway”. Well, no, because we’ve withdrawn everything and it’s all in pouches at home 🏠! This method makes us disciplined, or at least it’s helped me to be more rigorous.

The disadvantages of this savings method

I’ve been able to put money aside, despite my low salary, and that’s a real victory. However, it’s had a number of drawbacks, which means that it’s not really a method that’s suitable for everyone.

The practicality of this method

Before doing this, I never had any cash on me. I paid for everything with my bank card or my phone. Withdrawing all your money isn’t really very practical and, above all, I find it risky in terms of security. What if you lose your notes or your wallet? What if your savings envelopes are stolen? If your card is stolen, you can put a stop to it, but if your cash is stolen, you’re left with nothing but tears in your eyes 😭... What’s more, some expenses, like rent or bills, are paid directly by direct debit, so you can’t withdraw everything.

The negative emotions

Having this strict framework gave me a huge sense of frustration. Yes, I’ve been able to save, but apart from that I haven’t been able to do anything. I stayed at home and couldn’t really enjoy myself. Deep down, I’m an epicurean at heart, and I also like to make purchases that make me feel good. Worse still, it’s given me anxiety about managing everything in cash. I wouldn’t say I’m afraid of numbers, but I’m far from mathematically minded, and I found myself in a situation where I had to do my accounts very often...

👋 You may be interested in this article: What are emotional blocks?

Finding your own savings method

There you go, you know everything about “cash stuffing”! Of course, I’ve given you my opinion on it, but it’s important to remember that everyone’s different and what works for one person may not work for another. We mustn’t forget that budget management is a real challenge, especially in these times of crisis 💲.

Personally, even if it doesn’t suit me, I’ve realized that I need to change. I now plan a savings budget and a spending budget. Nonetheless, I prefer to keep everything in my account and use my bank card, it’s much better. Especially now that there are applications for managing your budget, and it’s even possible to have the option directly in your bank account. In short, I’ve tried it out, so it’s up to you to see whether this method of saving is right for you! Don’t hesitate to let us know what you think in the comments 💵.

Be sure to check out these articles;

• What is escalating commitment?
• The Johari window
• 10 Things manipulators say most