Heads up, besties! This post contains affiliate links. That means that if you make a purchase using my link, I may make a small commission at no extra cost to you.
A few months ago, the TikTok For You Page really said, “For you, Aimée” when it started bombarding me with cash stuffing videos. I had no idea what I was looking at but I was immediately taken in by the pretty pastel binders, the labels, and the weirdly satisfying way people divided their money into piles with all the notes facing the same way.
Everything in my little OCD brain lit up.
I needed to be a part of this new world!
So I ordered myself a cash stuffing binder, overhauled my budget, and gleefully jumped into applying this new money-saving technique.
And friends, it’s working!
What is cash stuffing?
Cash stuffing is a budgeting technique designed to stop overspending. The idea is, you take your monthly budget and allocate a set amount to each of your different spending categories. Since each category has its own allocation of money, you can’t accidentally overspend on shoes and leave yourself with no money left at the end of the month for petrol. (I’ve been there – it was not a good time!)
But cash stuffing goes a step further than just planning out your monthly budget and ear-marking your money for different expenses. With cash stuffing, you physically separate out the cash into different envelopes.
You might have an envelope for groceries, another for clothing, and then others for petrol, makeup, coffee…whatever it is that you spend your money on. The idea is, once the money in your envelope is gone, you’re done. Once that coffee allowance is spent, you’re making your own instant coffee at home, bestie.
Top Tip:
When it comes to dividing up your monthly income, I always recommend taking out all of the essentials first. For example, your rent, insurance, utilities, car payments etc are fixed, unavoidable expenses. It’s easier and more efficient to take these out first and then divide up whatever money is left over. (For more tips, check out my budgeting tips for beginners here.)
Physical Cash Stuffing vs Digital Cash Stuffing
When I first started flaunting my new cash stuffing binder on TikTok, a lot of people asked, “Can’t you just do that with an app?”
And it’s 2023 so, of course, the answer is yes!
I’ve heard that you can use Starling Bank and Good Budget to digitally divide up your income into imaginary envelopes rather than withdrawing cash each month and using a physical binder.
Here’s why I don’t do that:
- I spend less when I use cash. Swiping my card (or worse, my phone) doesn’t feel like a real transaction. And, because those swipes can add up so quickly, I can easily go over budget without even realising when I’m using my card. You can’t overspend with cash. Once it’s gone, no no margaritas for you, Aimée.
- It’s weirdly satisfying. There’s just something about rifling through my little cash envelopes that brings me joy. I like being able to physically see all of the money I have left over at the end of the month and that encourages me to spend less.
Of course, there are downsides to physical cash stuffing too. Some places refuse to take cash these days (I’m looking at you, Starbucks!). You also need to get into the habit of grabbing money out of your envelopes before you leave the house. But overall, I think physical cash stuffing works much better for me than digital cash stuffing would.
But What the Heck is a Sinking Fund?
If you spend as much time on budgeting TikTok as I do then you might be familiar with the words ‘sinking funds.’
So what the heck does that mean and what has it got to do with cash stuffing?
Ok, think of it like this…
You have your day-to-day cash stuffing envelopes for your monthly expenses like groceries, petrol, eating out etc. Each month, you put the necessary amount of money into the envelope and spend it throughout the month.
If, at the end of the month, you have some money leftover – hurrah! Maybe you decide to put that money into savings or maybe you decide to let it roll over so you have more money to spend next month.
Sinking funds work slightly differently. Your sinking fun envelopes are allocated to future expenses. For example, I have a car envelope. I don’t spend money on my car every month (although sometimes it feels that way) but I still put £50 a month into my car envelope. The idea is that when I do need money for my car (think new tyres, car tax, insurance etc), I already have money set aside for it. That way I don’t have to scramble around or break my budget when it’s time to fork out on my car.
Some sinking funds categories you might want to use:
- Car maintenance
- Annual subscriptions
- Home maintenance
- Travel
- Christmas
- Gifts
I can’t tell you what a huge difference having these sinking funds has made to me over the last few months. I expect that by the end of the year, I’ll have easily saved over £1,000 just by introducing sinking funds envelopes.
My Cash Stuffing Binder
Look, part of the fun of cash stuffing is the cute binders, ok? It is what it is!
I got mine from Amazon and I simply love it. It comes with individual plastic wallets I can use to divide up my money, stickers, budgeting worksheets, and space to store my cards. You can get yours here.
You can absolutely just use paper envelopes as an alternative but make sure you label them properly and keep them in a safe space so they don’t get lost or end up in the bin!
My Cash Stuffing Method
Recently, I completely overhauled my budget. Not only did I introduce cash stuffing, but I switched up my monthly budget amount, and I started using a new budgeting spreadsheet.
I know – I’m like a whole new woman!
Check out exactly what my new budgeting system looks like now in this video:
After just a few months, cash stuffing has already saved me money and helped me prioritise my spending, which is more important now than ever. Girl, have you seen the price of things out in the world right now? That cost of living crisis is hitting most of us pretty hard. So, do you think cash stuffing is something you’ll introduce into your money-management system?
Heads up, besties! This post contains affiliate links. That means that if you make a purchase using my link, I may make a small commission at no extra cost to you.
