Want to create a budget you won’t hate? Same. So we tapped personal finance influencer Charlotte Hall to tell us all about cash stuffing, an old-school budgeting method that’s having a moment thanks to Instagram and TikTok. Ahead, she explains how cash stuffing — which, yes, actually involves stuffing cash into envelopes — can help you take control of your finances, curb overspending, and make the most of your money.
Featured expert: Charlotte Hall
Charlotte Hall - Author, speaker, and cash budgeting expert
What is cash stuffing?
The cash stuffing system is an old-school budgeting method that has been revitalized and rebranded. What you do is take your variable expenses and put money for them into envelopes so that you do not overspend. Essentially, you are using envelopes as a means of making sure that you stick within your budget.
How can cash stuffing help me manage my money better?
The number one way it can help you manage your money better is being able to physically see cash in your hand as something tangible, and not just a card that you're swiping. When you’re swiping a card, it takes zero brainpower. But when you're handing somebody cash, you're thinking about how much money is going out of this envelope.
Plus, this method helps you rein in those bad behaviors and habits that you've picked up by just going to the store and swiping your card. For example, when I would look at my cash envelopes and say, “Ok, I only have $20 left here, I better pull my spending back,” as opposed to going into the store for a box of tissues and coming out with five items.
How do I go about setting up a cash-stuffing system that works for me?
First, go over your bank statements from the last 30 days. This is going to help you figure out what your categories need to be for your envelopes. It’s also going to help you see where you’re wasting money. For example, when I looked at my bank statements, I saw I was wasting a lot of money on eating out. Once you know what your variable day-to-day expenses are, make envelopes for them. Then, determine how much you’ll need for daily expenses until your next pay period. I always say it’s better to overshoot your variable expenses than undershoot. For example, if I spent $200 on eating out, in the span of 30 days I'm probably going to put $225 or $250 in my “eating out” envelope. As you go along, you might notice you’re not spending as much as you thought you would in one category and can adjust.
How can I avoid feeling restricted while using a cash-stuffing system?
When I first started using the cash-stuffing system, I thought, “Oh my gosh, I'm not going to be able to get my nails done, or get my hair done, or get the stuff I want from Sephora.” But then I realized that if I just put a name to every dollar that I make, I can have the things that I want. There really aren't any restrictions to the cash envelope method system. Rather, you are giving every dollar that you make a name, and some of it can be named “spa” or “Sephora.” It can be named whatever you want it to be named. That's very freeing, and it allows you to put your dollars where you want them to go.
This interview has been edited and condensed for clarity.
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