what is cash stuffing?
Cash stuffing is budgeting with envelopes. When money comes in, you split it into envelopes, one per purpose: groceries, rent, a holiday. You spend from the envelope the purchase belongs to; what is left is what you can still spend.
People do it so every dollar has a job before it is spent, and because handling each dollar keeps them aware of their money. Budget Bestie is that method on your iPhone.
how cash stuffing works
- Create envelopes. One for each thing you spend on: food, eating out, rent.
- Stuff your envelopes. Put the money you have into them, based on how much you will spend before you get paid again.
- Spend your money. This is the fun part. When you buy something, use the money from the envelope it belongs to, and never feel guilty about it.
- Get paid, repeat. Record your income and stuff your envelopes again.
the one act
Money comes in and you spread it across your envelopes. That is the whole method, the same on payday and when extra money arrives. Nobody starts over: you decide how much each envelope should hold now and stuff until nothing is left outside an envelope.
Balances carry on until the money is spent, moved or stuffed again. Nothing resets. An envelope can go below zero and stays there until you move money in. Every dollar is in exactly one place, so stuffing never changes your total.
real envelopes or an app
Some people stuff paper cash into real envelopes and keep the app alongside, as the record of those envelopes. Others keep no paper; their envelopes exist only in the app, as a plan over money sitting in their accounts. The method is the same for both.
the words
- Envelope: money set aside for one purpose.
- Stuff, stuffing: choosing how much of your money goes into each envelope.
- Stuffing day: the day you stuff, on your pay schedule.
- Ready to stuff: money you have recorded but not yet put in an envelope.
- Period: the time between two stuffings.
- Bill: a fixed envelope with an amount and a schedule.
- Goal: a savings envelope with an amount and, if you like, a date.
- Move money: taking from one envelope to cover another.