What is Cash Stuffing? Here is All You Need to Know!

With prices of basic commodities going high because of inflation, people are finding ways to help them save money and manage their expenses. One old money managing system is making waves on social media, especially on TikTok.

“Cash Stuffing” formerly known as Envelope System is a money-saving technique where people use labeled envelopes to budget and set aside cash for different purposes.

There are two main purposes of this, namely: the budgeting envelops and emergency savings.

A budgeting envelope is where a certain amount of money is allocated for specific purposes each month. The envelopes are labeled for their purpose for example for food, electricity bills, etc. Once the money in an envelope is used up, the envelope will be restocked on the predetermined date.

On the other hand, an emergency saving envelope is where you put aside your money for emergencies or significant expenses like trips or buying a TV or phone.

Pros and Cons of Cash Stuffing

CONS:

• Security Risks: Keeping envelopes filled with cash at home can be risky. The risk of misplacing your envelopes, theft, or damage, like a fire, could let you lose all of your hard-earned money.
• Missed Earning Potential: Putting your cash in an envelope won’t gain any interest.
• Spending Temptation: The temptation of spending money from your envelope is also a problem. Having cash that is just within your reach can easily be spent on other things.

PROS:

• Financial Responsibility: Cash stuffing encourages budgeting and self-control, helping you to stay within your monthly budget and avoid unnecessary spending.
• Financial Control: Managing your money through cash stuffing can bring a sense of control and help you create a setup over your budget.

Remember, everyone’s financial situation is different, so it’s essential to assess what works best for you and seek professional advice if needed. (ASC)