
What is cash stuffing and how does this trendy budgeting method work?
Managing money effectively is a challenge that most people face. With the rise of online shopping and digital transactions, it can be tough to keep track of your expenses and stick to a budget. However, the cash stuffing method has been gaining popularity as an effective way to manage your finances.
“Cash stuffing is a budgeting system where you use physical cash to budget monthly,” says financial advisor Erica Mathews. Basically, you “cash” out every paycheck and “stuff” it into envelopes that represent both spending and savings categories: groceries, rent, car payment, emergency fund, etc.
Who is the cash stuffing method best for?
The cash stuffing method is best for people who struggle to keep track of their spending and have trouble sticking to a budget. It is also an excellent method for people who prefer a visual representation of their money rather than digital records. If you are looking for a way to manage your money effectively, then the cash stuffing method could be right for you.
How the Envelope System Works:
The envelope system is a budgeting technique that involves dividing your money into different categories and putting cash in envelopes for each category. For example, you may have an envelope for groceries, entertainment, transportation, etc. Each envelope is labeled with the category and the amount of money you have allocated for that category.

How To Use The Cash Envelope System For Budgeting:
- Create a budget that outlines your monthly income and expenses. Then, divide your expenses into categories such as groceries, entertainment, and transportation. Next, allocate a set amount of cash for each category and place it in a corresponding envelope. Throughout the month, use only the cash in each envelope for its designated category. This helps you limit your spending and avoid overspending in any particular category. If you have money left over at the end of the month, you can either save it or roll it over to the next month. By using the cash envelope system consistently, you can reduce your reliance on credit cards and build better financial habits.
- Fill The Envelopes With The Right Amount Of Cash. To fill the envelopes with the right amount of cash, you need to determine how much money you want to allocate for each budget category. You can use your monthly expenses as a guide and adjust the amounts based on your income and financial goals.
- Create and fill cash envelopes for the budget categories. Once you have determined your budget categories and allocated the appropriate amount of money, it’s time to create and fill the envelopes. You can use any type of envelope, but some people prefer to use envelopes that are labeled or decorated to make it easier to identify each category.
- Spend only what you’ve put in each cash envelope. Once you have filled the envelopes with cash, you should only spend the money that is in each envelope. For example, if you have $100 in your grocery envelope, you should only spend $100 on groceries for the month.

Benefits of using cash stuffing:
It Reduces the Use of Credit Cards
Using a cash stuffing or envelope system approach enables individuals to spend only the money they have and, therefore, avoid getting into further debt. This budgeting method is particularly helpful for those already struggling with credit card debts or controlling their spending habits. Additionally, this technique can also help individuals stay ahead of inflation. By using only physical cash, they can limit their spending to the cash they have allotted and keep their finances under control. It’s also a way of getting ahead of inflation.
It gives you control over your money
Breaking down larger savings goals that can take years to achieve into smaller, monthly goals allows you to stay focused and get wins sooner, keeping you motivated. It also gives you a sense of freedom from keeping track of all your money in your head, and the ability to make sure your money is going where you want it.
It makes money tangible
The goal of cash stuffing/envelope systems is budgeting. When you swipe a credit card, you don’t visualize how much of your budget you’re using up. The money doesn’t feel real, so your brain doesn’t even realize how much you’re spending over multiple card swipes. When you hold cash in your hands and watch it go away as you spend it, this helps your brain see it for what it is – a finite resource to be managed and used wisely.

Financial influencers who are recommending cash stuffing and the envelope system:
- Dave Ramsey
Dave Ramsey is a well-known financial expert and author of several best-selling books on personal finance. He advocates for the envelope system, a cash management technique where you allocate cash into different envelopes for different categories like groceries, entertainment, and transportation. Dave Ramsey’s approach to personal finance has helped millions of people get out of debt and achieve financial freedom.
- Jordan Page
Jordan Page is a financial blogger and YouTuber who has a large following thanks to her practical and straightforward approach to personal finance. She is a big believer in the cash stuffing technique, which involves taking out cash for each expense and putting it into separate envelopes. Jordan’s content is relatable, and she offers helpful tips to her followers on how to save money, pay off debt, and improve their financial situation.
- Jasmine Taylor
Jasmine Taylor is a TikTok influencer who took a proactive approach to manage her finances by adopting an all-cash budgeting system in the early months of 2021. Taylor documented her budgeting experience on TikTok, using the platform to hold herself accountable and inspire others. She turned her success online into a business venture – Baddies and Budgets. Taylor’s site offers a range of financial courses, budgeting tools, and accessories, all designed to help people take control of their finances and build a brighter financial future.
- Rachel Cruze
Rachel Cruze is a financial expert and author who shares her financial expertise through her podcast, YouTube channel, and social media platforms. She is a big believer in the envelope system and recommends her followers try it out to get a better handle on their finances. Rachel offers practical tips on budgeting, saving money, and avoiding debt, making her content accessible to people of all financial backgrounds.
- Lynnette Khalfani-Cox
Lynnette Khalfani-Cox is a personal finance expert, speaker, and author who shares her financial expertise through her website, The Money Coach. She advocates for the envelope system and shares tips on how to use it effectively. Lynnette’s content focuses on helping people overcome financial hurdles, including debt, and achieve financial freedom.

FAQ
Is the Envelope System the Same as Cash Stuffing?
Yes, the envelope system is the same as cash stuffing. Both methods involve putting cash in envelopes for each budget category. The only difference is the type of container used to store the envelopes. Some people use a cash stuffing binder, while others use a cash envelope binder or cash stuffing wallet.
What is the difference between the cash envelope system and a traditional budget?
The main difference between the cash envelope system and a traditional budget is the use of physical cash. With a traditional budget, you may track your spending and income using software or spreadsheets, but you don’t necessarily allocate cash to different budget categories. With the cash envelope system, you physically fill different envelopes with cash for each budget category and only spend what you’ve put in each envelope. This can help you stay on track with your budget and limit spending. Additionally, the cash envelope system may be better suited for people who struggle with overspending or impulse purchases, as the physical limits of cash can make it easier to stick to your budget.
What If I Pay Some of My Expenses Online?
If you pay some of your expenses online, you may find it challenging to use the cash envelope system for budgeting. In this case, you may want to consider using a separate budgeting method for online purchases. Check out this article on How To Use Cash Envelopes When Making Online Purchases for some ideas on how to navigate this challenge. You can also check out these apps: Every Dollar and Good Budget – both have free and paid versions.
Melissa Stewart is the founder of SheOwnsIt.com. She is a Purveyor of Possibility, Entrepreneur Advocate and Coffee Addict. She believes that behind every successful woman is her story. What’s your story?