#CashStuffing has quickly gained popularity on social media as people look for ways to adjust their spending to accommodate increasing prices at the gas pump and store shelves. Cash stuffing is basically a rebranding of the old tried and true method called the envelope system — you take out cash at payday and divide it into dedicated envelopes for different spending and saving categories, like gas, groceries, clothing, dining out, vacation savings, and so on.
The money in each envelope is the maximum you can spend, so if you have a budget of $300 in your grocery envelope for this pay period, you have to think critically about the items in your cart as you shop. You may feel more pressure to think twice about impulse purchases instead of simply adding them to your cart and swiping your credit card if the total is more than you were planning for. If you have any money leftover in an envelope by the time you get paid again, you can roll it over to boost your budget for the next period or move it into an envelope for a savings goal.
So is cash stuffing for you? Here are a few things to consider:
Pros
- Offers visibility for your spending and saving.
- Easy to stick to your budget — what you have is the most you can spend.
- Builds spending habits that avoid credit card debt.
Cons
- If your cash is lost or stolen, it’s gone for good.
- You don’t build credit with cash.
- Cash purchases don’t earn rewards points.
- Cash purchases don’t automatically create a transaction history.
- Cash in an envelope doesn’t earn interest.
Or, Try an Alternative
If you’re looking for a budgeting solution but worried about losing your cash or missing out on the valuable extra features offered by cards, consider these cash stuffing alternatives offered by SESLOC:
- Schedule weekly dates with your bank account — review your transactions in Online Banking and schedule payments with Bill Pay.
- Set up custom alerts in Online Banking to notify you about transaction activity or account balances.
- Pay yourself first! Schedule an automatic transfer to your savings on payday.
- Try Financial Wellness Tools in Online Banking.
- Use a Financial Calculator to set up your personalized budget.
- Watch a SESLOC webinar on topics like how to reduce spending, or tackling debt.
