In recent years, cash stuffing, or the envelope system, has become more and more popular as a way for couples to save money and get control of their finances. Financial strain can have a huge impact on your marriage, and can be a leading cause of marital stress amongst couples. Therefore, when money gets tight, it’s important to have a system in place to help you keep track of spending and savings. Cash stuffing involves using cash instead of cards for most of your day-to-day spending. It can be helpful for many because you can dictate exactly where each of your dollars is meant to go, and you can see exactly how much you have left at any time. It’s important to account for sinking funds, those pesky yearly expenses that tend to wreck the most careful budget. And you’ll need to have a system in place for online shopping as well, since so many things we pay for are done electronically. However, with a little organization, cash stuffing can be a great way to start setting aside money for the things you really want, and to help curb frivolous spending.
Cash Stuffing to Save Money: Get a Handle on Your Finances
Why It Helps
Using cash stuffing instead of cards is helpful because it allows you to see exactly where all of your money goes. You can also visually see when you are running low on funds, which can help curb spending. Additionally, we have more of an attachment to physical money than to the number on a screen when looking at a bank statement. So actually handing over cash feels more impactful than just clicking “buy” online.
How to Start
To start cash stuffing, you’ll need to get an idea of your monthly ins and outs. Make a list of all of your income as a couple and when it comes in each month. Then, make a list of all of your monthly expenses. For example, things like utilities, rent, gas, subscriptions, and memberships. Figure out what a realistic weekly budget should be for things like dining out, spending on pets, or personal spending. Then, allot yourself whatever is your budget for the week, and put the rest of your money towards your different bills so that you have the funds there when you need them. You can do this with physical envelopes or online apps.
Sinking Funds
Don’t forget to take into account your sinking funds when cash stuffing. These are yearly, quarterly, or otherwise non-monthly expenses that tend to break the bank. For example, home warranties, membership renewals, auto tags, vet visits, and holiday shopping. Figure out how much you’ll need to set aside each month to have enough funds when they’re needed. Budget for them when looking at your ins and outs, and start setting aside money little by little so that you don’t have to use a credit card or struggle to afford other things when they are due.
Online Spending
Many people wonder how to handle online spending when using the cash stuffing system. So many of the things we have to pay for can only done electronically, or are much more convenient electronically. You can still use cash stuffing by keeping track of your online spending in a separate envelope and returning the money to your bank account at the end of each week to replace the funds you used. You can also do this with credit cards by setting aside cash from your budget to pay back towards your bill at the end of the month.
Cash stuffing, or using an envelope system can be a great way for couples to really get some control over their spending. If you frequently finding yourself wondering where all the money went at the end of the month, then this is a great option. Begin with creating a budget that is realistic and takes into account all of your monthly income and spending. Make a list of yearly or non-monthly expenses, and begin allotting part of your budget to set aside for them until they are fully funded. If you frequently shop online, you can simply move the cash set aside for those purchases into a separate envelope that returns to your bank account. Because you’ll be handling cash, you’ll be less likely to spend it frivolously. And you’ll be able to see at a quick glance exactly where all of your money is going and how much is left. If you frequently find that there’s too much month at the end of your money, cash stuffing might just be the thing you need to start reaching your savings goals.