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Cash Stuffing: How This Budgeting Method Works

Cash Stuffing: How This Budgeting Method Works



clearly remember the exhilarating feeling of discovering a hidden treasure as a child. The anticipation of unraveling secrets and stumbling upon unexpected riches. I and my siblings played lots of treasure hunt games as kids, and it made me wonder when I’d start laying up my own treasures as an adult. But now that I am grown, I realize there’s more to life than wishful thinking, especially when it comes to money.

If you want to be rich, you must have financial wisdom. Allow me to introduce you to this lifesaver Tiktok brought my way, a budgeting method that draws upon the wisdom and traditions of our beloved ancestors called Cash Stuffing. To be honest, my aunt has always used this method since I was a child, and it has always been effective. It’s the method of saving money in different places inside the house or in a box.

While the updated TikTok version is a bit different, the principles are the same. Cash stuffing, also known as envelope budgeting or the envelope system, is a budgeting method that involves allocating physical cash into different envelopes or categories, each representing a specific budgeted expense. It is a tangible and visual way to manage your finances, allowing you to see and physically handle your money as you allocate it towards various spending categories.

Here’s how cash stuffing works

The concept is relatively straightforward. You start by determining your budget categories, such as groceries, entertainment, transportation, or any other expenses that are part of your financial plan. Then, you assign a specific amount of cash to each category and place that money into separate envelopes labeled accordingly. For example, if you allocate $200 for groceries, you would place $200 in the “Groceries” envelope.

Cash stuffing offers a sense of control and accountability over your finances. It allows you to visually track your spending and provides a clear indication of where your money is going. Moreover, it cultivates a greater awareness of your financial habits and encourages you to prioritize your expenses based on available cash.

Jasmine Taylor and the rise of cash stuffing


By January 2021, Jasmine Taylor knew she needed to adjust her mindset around money. She had recently lost her full-time job and was about $69,000 in debt. #Linkinbio for more on how “cash stuffing” helped her get back on track with budgeting. #cashstuffing #budgeting #cashstuffingenvelopes

♬ original sound – CNBC Make It

@cnbcmakeit, the popular TikTok page of the media company, interviewed a 31-year-old lady named Jasmine Taylor on cash stuffing. She narrated how she found herself in a challenging financial situation with numerous bills to pay. Feeling overwhelmed, she sought a solution that would help her effectively manage her expenses and regain control of her finances. It was during this time that she discovered the power of cash stuffing.

She also talked about how she began implementing the cash-stuffing method as a way to allocate her funds and meet her financial obligations. Then Taylor proceeded to share the steps she took to divide her income into various envelopes, each representing a specific bill or expense. By physically allocating cash to these envelopes, she gained a clear visual representation of her financial responsibilities.

As she continued to implement cash stuffing and witnessed the positive impact it had on her financial well-being, Jasmine decided to share her story with others through her TikTok videos. The video detailing her journey with cash stuffing resonated with viewers who were also seeking practical budgeting solutions. Today, the 31-year-old’s advice has helped countless individuals around the world.

How to implement this budgeting method

  • Determine your budget categories: Start by identifying the various expenses or categories you need to budget for. These can include groceries, utilities, transportation, entertainment, savings, and more. Make sure to cover all your essential expenses and any discretionary spending areas.
  • Set budget amounts: Assign a specific amount of money to each budget category based on your income and financial goals. You can allocate a fixed amount for each category or use a percentage-based approach. For example, you may decide to allocate $200 for groceries, $100 for transportation, and $50 for entertainment, or 5% for transportation, 10% for groceries, and 2% for entertainment.
  • Get physical envelopes or virtual equivalents: Choose whether you prefer physical envelopes or virtual alternatives for each budget category. Physical envelopes can be actual envelopes or separate sections within a wallet or money pouch. Virtual alternatives can include digital budgeting apps or prepaid debit cards linked to specific categories.
  • Allocate cash to the envelopes: If you’re using physical envelopes, take the allocated amount of cash for each category and place it inside the corresponding envelope. If you’re using virtual equivalents, transfer the designated amount of money to the associated digital account or prepaid card.
  • Spend from the designated envelope: When you need to purchase in a specific budget category, use the cash from the corresponding envelope or the designated virtual account/card. For example, if you’re buying groceries, take the required amount from the “Groceries” envelope or use the specific digital account/card for grocery expenses.
  • Track your spending: As you spend money from the envelopes, keep a record of your transactions. This can be as simple as marking the amount spent on the envelope or using a budgeting app to track your expenses. By tracking your spending, you can monitor how much money is left in each category.
  • Refill the envelopes: If you run out of cash in a particular envelope, resist the temptation to borrow from other categories. Instead, wait until the next budgeting period to replenish the envelope with fresh funds. This helps promote discipline and encourages you to stay within your designated budget limits.

By physically handling the cash and monitoring the envelope balances, you gain a visual and tactile understanding of your financial situation. This awareness helps you make mindful spending decisions and promotes better control over your finances.

Cash stuffing can be adapted to suit your personal preferences and financial circumstances. You can adjust the frequency of budgeting periods (e.g., weekly, bi-weekly, monthly), modify your budget categories as needed, and experiment with virtual alternatives if you prefer a digital approach. Ultimately, cash stuffing empowers you to take charge of your spending, avoid overspending, and work towards your financial goals with greater intentionality.

Featured image: PeopleImages/iStock

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