Cash-stuffing: Does it Really Work

September 6, 2023

Social media has made cash-stuffing trendy. However, the budget-saving practice has been around for over 100 years. 

Cash-stuffing, or envelope method, is a budget method where savers write their monthly expenses on separate envelopes and “stuff” them with the monthly amount of cash. The idea is that you only pay for things with the physical cash you’ve budgeted. Once the envelope is empty, you can no longer spend money in that category until the next month.

What is Cash Stuffing? 

The cash-stuffing budgeting method, also known as the “envelope method,” is a way to manage personal finances by allocating cash into different categories or “envelopes” for specific expenses. Each envelope represents a separate budget category, such as groceries, gas, dining out, entertainment, etc. At the beginning of each budget period (which could be a week, two weeks, or a month depending on your pay schedule), you “stuff” each envelope with the amount of cash you’ve designated for that category.

Cash-stuffing helps people control how much money they are spending. Partly because they are not relying on credit cards, cash apps, or digital wallets to pay for items; instead, they are budgeting cash into categories and only relying on that amount. This keeps you from going over budget accidentally or on purpose. 

Now, most fixed expenses, such as your mortgage, utilities, and loans, cannot be paid in cash. That is why most people use cash-stuffing to track and control their extracurricular spending on dining out, groceries, gas, entertainment, etc. 

How Cash Stuffing Works

  1. Create a Budget: Evaluate your monthly income and expenses to create a budget. Decide how much money you need to allocate for each spending category.
  2. Prepare Envelopes: Create physical envelopes and label them according to each budget category. Some people use actual paper envelopes, while others might use pouches, jars, or budgeting apps. 
  3. Cash Out: Withdraw the total amount of cash you need for all categories from your bank.
  4. Stuff Envelopes: Divide the cash among the envelopes according to your predetermined budget.
  5. Spend From Envelopes: Use the cash from the corresponding envelope whenever you need to purchase in a specific category. For instance, buying groceries, you would take money from your “Groceries” envelope.
  6. Track Spending: Keep track of your money from each envelope. Some people jot down notes directly on the envelope or maintain a separate log.
  7. Adjust As Necessary: At the end of the budget period, if you have leftover cash in an envelope, you can either roll it over to the next period or allocate it to savings or another category. Suppose you run out of money in an envelope before the period ends. In that case, you’ll need to transfer money from another envelope or refrain from spending in that category until the next budget period.
  8. Re-evaluate: Review your budget categories and amounts to ensure they still fit your needs and financial goals. 

Related Article:

Budgeting on Low Income: 18 Steps to Cut Spending

Sticking to a tight budget on a low income is easier than people think; the first step is the most important, starting a budget. But, once you start budgeting, you will find that creating ways to save more money can be fun. Hunting down sales, being less stressed, and having extra cash in your bank accounts make budgeting all worth it.

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Advantages and Disadvantages of Cash-Stuffing


  • Being more mindful of how much you are spending.
  • Helps with your money management skills. 
  • Makes you more aware of how much you are spending. 
  • Allows you to have physical control over your budget. 


  • Having large amounts of cash in your house or on your person. 
  • Not all places accept cash. 
  • You are not gaining rewards or points on your credit card purchases. 
  • You could be missing out on potential interest earnings. 

Does Cash-Stuffing Work

When you have to pull physical cash out of your wallet to pay for items, it instantly makes you aware of how much you are spending. You are no longer just hearing a total and swiping a credit or debit card. This may be why people spend up to 100% more when shopping with a credit card. 

Trying out cash-stuffing could be worthwhile if you need help controlling your spending. The most significant benefit of cash-stuffing is that it forces you to stop and think about what you are spending. It lets you control and evaluate how much you are spending and if it is essential. 

Final Thoughts 

The benefits of this method include greater spending awareness and control, as using cash tends to make people more mindful of their expenditures. It’s a tactile, visual system that can be especially helpful for those struggling with overspending or new to budgeting. However, this method may be less convenient than electronic methods of spending and tracking, and it needs to be better suited for all kinds of expenses (like online purchases).

Take time to find the best budget system to track your spending habits and save money. Prioritize your financial and personal care. For more information on how to have financial success visit our website at Personal Finance Archives – Texas Regional Bank.

Texas Regional Bank

Texas Regional Bank is a privately owned institution that was founded in South Texas with the goal to bring a locally-owned, relationship style bank back to the communities we serve. TRB is committed to building a relationship with our customers by providing exceptional customer service, financial products, and mobile and online banking.