In the 21st century, there are a lot of places where you can get financial advice. There are traditional channels — such as finding a financial advisor — but you can also look to modern sources like social media for suggestions on how to best manage your money. One concept that has been getting a lot of attention lately — to the tune of nearly one billion mentions on TikTok — is the idea of cash stuffing. If you’re not sure what that is — fear not. This page will walk through how it works and what you need to know.
For more help managing your finances, consider finding professional assistance with SmartAsset’s free financial advisor matching service.
Cash Stuffing Basics
Cash can be shoved many places — under the mattress and into a shoebox both come to mind — but the cash stuffing strategy generally refers to putting cash into labeled envelopes. Yes, actual physical envelopes.
At its core, cash stuffing is a budgeting technique. At the beginning of the month, you figure out how much you can spend on various categories — it could be very granular, with buckets for “food” and “entertainment,” or it could be looser, with just two buckets for “wants” and “needs.” Once you’ve figured out all of your buckets, label an envelope with the name of each category and put in how much you can spend on that category for the month. Then spend it over the course of the month, knowing that if you use all the cash in an envelope you can’t use anymore.
While cash stuffing has trended recently on TikTok, it isn’t actually new. Like many Gen Z trends, this is actually from a previous generation — sorry, young influencers with Dua Lipa in the background of their videos, but everyone can tell when your outfit is based on a photo you saw from an Oasis concert in 1996. In a world of touchless payments and cryptocurrency, there is something charmingly retro about putting good old fashioned greenbacks into a paper envelope.
Cash Stuffing Pros and Cons
While some viral money hacks turn out to be complete hocum, cash stuffing can be a useful tool under the right scenarios. Here are the pros and cons of the practice:
Cash Stuffing Pros
- Makes budgeting feel real. You can make a budget that is immaculate, breaking down how much you should spend down to the penny; it doesn’t matter if you don’t follow it. Cash stuffing makes the budget feel real by giving you a physical amount of money you’re allowed to spend; for some people, this will help them stick to the plan.
- Limits debt. If you’re always spending with a credit card, your debt can get out of hand quickly. This method keeps that from happening.
- Simplicity. If nothing else, cash stuffing is simple. You spend what’s in the envelopes and nothing else.
Cash Stuffing Cons
- Cash is inert. If you store your money in envelopes, it’s just sitting there. It isn’t earning you interest like it would be in a savings account or other interest-earning account.
- Easy to lose. The biggest problem with physical cash is that it can be lost, stolen or misplaced. If you have your “entertainment” envelope with you on a night out and you accidentally leave your jacket at a bar, you’re out of luck.
- It takes time. Cash stuffing is a somewhat time consuming process. You have to be committed to putting in the work if you want the hack to show results.
The Bottom Line
Cash stuffing is a basic budgeting technique that has recently popped on TikTok. It involves putting your money for the month into envelopes at the beginning and only spending that cash. This is actually an old-school technique that has recently had a new moment among young influencers.
Budgeting Tips
- A financial advisor can help you budget more effectively. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Use SmartAsset’s budget calculator to get started, whether you plan to use cash stuffing or not.
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