Cash Stuffing: How to Save Over $5K in 100 Days From Now
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Hey there, savvy savers! There are so many strategies to save money, and one straight forward method to build a savings account is a technique called “cash stuffing.” In this article, we'll dive into the world of cash stuffing: exploring what it is, how to get started, valuable strategies for long-term success, and the essential tools you need to achieve your savings goals. Get ready to take control of your finances and watch your savings grow!
What is cash stuffing?
Cash stuffing is a budgeting technique that involves allocating your money into different envelopes or categories to help you manage your expenses and save effectively. Each envelope represents a specific spending category, such as groceries, entertainment, transportation, or savings. By using cash and dividing it into envelopes, you can visually track and control your spending, ensuring that you stay within your allocated budget.
I found this technique especially helpful when I was getting started with budgeting. I would make this beautiful budget and then as the month would go on, I would use my card on things I hadn’t accounted for. Suddenly, by the end of the month, I would be pulling money from my savings account to pay off my credit card balance and my monthly budget was blown!
I learned it’s one thing to build a budget on paper or a spreadsheet, but it’s far more compelling to have your paycheck, in cash, spread out in front of you and organized into designated, labeled envelopes.
I was cheat-proofing myself in a way. If I wanted to go out to dinner, or buy new shoes, I could only use the money in the designated spending envelope. Once that spending money is gone from the envelope, it’s gone!
Do you want to save over $5k in 100 days from now?
Cash stuffing, when done right, can be an easy way to squirrel away money without much effort. How amazing would it be to look 100 days in the future to see over five thousand dollars in savings to pay down some debts?
To make this a reality, take 100 envelopes and number them 1 to 100 with a pen. That number on each envelope is the amount of money that will eventually be squirreled away in the envelope. Each day, pick an envelope and put the labelled cash amount in the envelope. You can fill the envelopes in order, or pick whichever amount works best for each given day. Just be sure to fill one envelope every day until they are all filled. In 100 days, you will have an extra $5,050 to save for a rainy day or add some wiggle room to your bills and debts!
(Not everyone may have the cash flow to do this in 100 days, so set whatever timeframe is best for you. If you commit to filling all the envelopes, at the end you will have a ton of extra savings!)
Now that I’ve sold you on the success of cash stuffing, try these steps to get started:
Step 1: Assess your expenses: Start by analyzing your current spending habits and identifying your essential categories. Common ones include groceries, bills, transportation, entertainment, and savings. Organize each category as either a need, or a want.
Step 2: Set your budget: Determine how much you want to allocate to each category based on your income and financial goals. Be realistic based on your current spending habits and set a budget that isn’t too stringent so you are more realistically able to stick to it.
You can set this as you see fit, but a common starting place is to use the 50/30/20 rule. Following this rule, 50% of your income goes towards needs (groceries and rent for example), 30% goes towards wants (shopping and dining out), and 20% goes towards savings and debts.
Step 3: Gather your supplies: You'll need envelopes, a pen for labeling, and cash for filling them.
Step 4: Label and organize your envelopes: Write the name of each spending category on a separate envelope. You can get creative with decorative labels or color-coding to make it visually appealing. You can also get stickers and reusable envelopes if that is more your style.
Step 5: Allocate your cash: Once you have your envelopes ready, organize the allocated amount of cash into each envelope according to your budget. I love that, with cash stuffing, you can physically see and feel the money you have for each category.
Step 6: Hide the credit card: Keep that credit card of yours in a safe place, out of easy reach for a little bit. By only spending the cash that you have organized in your envelopes, you will build the habit of keeping your spending in check. With cash stuffing, you pay your savings account first, and organize the rest of your spending habits second!
Strategies for Long-Term Success:
Track your spending: Keep a record of your expenses for each category. This will help you identify any overspending and make adjustments accordingly.
Regularly reassess your budget: Life changes, and so do your financial priorities. Take time to review and adjust your budget periodically to reflect any evolving needs and goals.
Be disciplined: Stick to your budget and resist the temptation to dip into other envelopes. It's important to stay committed to your savings goals.
Celebrate milestones: This is all about savings, but you gotta have fun every once in a while too, right? Acknowledge your progress along the way. When you reach savings milestones or successfully stick to your budget, recognize your hard work and reward yourself (within reason) to keep yourself motivated.
Don’t give into temptation to use your card: I know, it’s easy to just whip out the plastic and go on with your life, but using your cash will not only help with avoiding that credit card debt, but will also keep you accountable to your goals. If you have to use your card, (ex: you’re buying something online), be sure to take money from the envelope and use it to pay off that credit card balance immediately so you don’t forget!
Tools for cash stuffing Success:
Envelope system organizers: Invest in an organizer or wallet specifically designed for cash stuffing. These often have separate compartments for your envelopes, making it easier to carry and organize your cash.
Smartphone apps: If you prefer a digital approach, there are budgeting apps available that mimic the envelope system. They allow you to allocate virtual funds to different categories and track your spending on the go!
Money management software: Consider using personal finance software to help you track your expenses, automate savings, and gain a holistic view of your financial health. After much trial and error, I chose Simplifi as an app to track spending and build a better view on where our family’s money is being spent. It’s been awesome to better understand our spending habits!
Cash stuffing is a practical and effective method for managing your finances, gaining control over your spending, and reaching your savings goals. By following the steps outlined and implementing strategies for long-term success, you'll be well on your way to achieving financial stability and enjoying the rewards of your hard-earned savings. Get started today and watch your money grow, one envelope at a time!
Remember, financial success is a journey, and cash stuffing is just one tool in your financial toolkit. Stay consistent, adapt as needed, and always keep your long-term goals in mind
