Cash Stuffing: Start 2024 off With This Saving Hack

Cash stuffing is the new way to save according to TikTok.

Cost of Living. It’s a crisis that no-one can ignore, whether it personally affects you or not, as it’s deeply affecting most of the UK, with Gen Z and Millennials looking for new ways to save. 

Enter a “new” technique called Cash Stuffing, a way of saving money that’s caught on over the past year: TikTik users have got a hold of it, helping boost awareness by nearly 300%.

Jasmine Birtles Shows us How

Cash Stuffing is essentially a method of saving money by physically withdrawing it from your bank account and organising it in a folder system. Yes, actually taking money out and physically stashing it in different folders may sound old-fashioned and somewhat on the dangerous side, but let’s look at the benefits.

MoneyMagpie content editor Vicky Parry says “Anything that encourages people to save is a good thing. We understand that lots of more traditional methods of banking can alienate some, so seeing ideas like this seems fully inclusive. In reality Cash Stuffing has been going on forever. Older generations called it The Jam Jar or Envelope Method. It is an old “housewife’s” trick of dividing pay-packets. However, if the younger generations are engaging and sharing, then it is no different to my Nan telling her mates down the shops. Let them have it”.

BENEFITS

We all have monthly outgoings that have to be prioritised such as rent, mortgage and bills. This money would be taken out automatically, so you would leave that in for the bank to handle, but whatever’s left, you then divide into categories within your folder system. So, this could be for things like ‘pocket money’, ‘treats’, ‘holiday’ or ‘kids’: each category would have its own envelope.

Breaking down large financial goals into small monthly targets focuses your saving techniques, as does watching your money physically disappear: scary we know, but we hope you see what we mean. When you spend money ‘virtually’ on banking apps and credit cards, it doesn’t always feel like real money, and therefore it’s easy to run into trouble by spending above your means at the click of a button on your phone.

DRAWBACKS

The first thing you’ll probably think of is how unsafe it would be to keep actual cash around your house: keeping it in a bank makes sure it’s at least safe and un-stealable. There’s also no interest on money not paid into a bank or building society, so it won’t mature stuffed into those envelopes.

You can, however, keep the money in a safe in or somewhere out of your house – maybe even an easy to get to safety deposit box… although that costs money.

OUR ADVICE

MoneyMagpie’s Jasmine Birtles says, “I’m a big fan of any method that helps people organise their cash (and therefore their life) and potentially saves them money.

“We’re all different and for many people actually being able to physically see the money they have can be a big help when it comes to budgeting. In fact many surveys have found that using physical cash can make us spend less as it’s say to see the money draining away.

“So this trend of cash-stuffing (or the envelope method as I would call it) has my full backing if it helps people manage their money better and also sleep better at night. The only thing I would say is that they need to make sure that no one else can get their mitts on that cash so they should keep it really safe…. even from other members of the family!”

KEEN TO TRY cash stuffing?

Work out how much you spend each month on treats, food, days out and so forth, and think carefully before spending it. Don’t go over your budget: thinking of the money as finite means it’ll really sink in that once it’s gone, it’s gone.

At the end of each month, add a little money aside for special treats like a holiday, a car or something you normally wouldn’t be able to get: having a money goal for a treat or two both allocates your money into savings, and encourages you to keep adding to it.

You might consider keeping a spreadsheet of your spending to make sure you’re on top of it, and also work out exactly what you do and don’t spend money on. For example, if you regularly get takeaway food, maybe start putting less money into that envelope to encourage better habits, or conversely if you’re not spending as much money on, say, books and games, you can adjust so that you’re not putting as much money into areas you’re not using.

We also encourage you to look at “The 50 Envelope Savings Challenge” which we covered here.