![]() ![]() In its strictest form, the envelope method involves divvying up your cash according to different budget categories, or “buckets,” and then spending it accordingly. It doesn’t always require the militant precision that you might assume. You can also use cash stuffing for short periods of time - say, a month or a week or even a few days - to course correct if you’ve been overspending. Instead, focus more on the spontaneous spending that you do on the fly and actually need to budget for. Most of your fixed bills (like rent and internet) are payable only by check or card. So, how to square the advantages of cash budgeting with our frictionless, money-eating reality of cards and payment apps? When I spoke to people who incorporate cash stuffing into their day-to-day lives, they all admitted that it isn’t perfect, but it’s worth trying.įirst and most importantly, you don’t need to go completely cash-only - think about what’s realistic. When I tried a version of the cash-only method years ago, it kept me accountable for my spending and helped me save a bunch of money. Other studies have found that when people use cash, they tend to spend less they also feel more connected to the things they do buy. Research shows that using cash increases the “pain of paying,” also known as that sinking feeling of parting with your financial resources when you make a purchase (or even consider it). Still, the case for going cash-only is compelling. Or so I tell myself as I use them to pay for my life. Plus, credit cards aren’t all bad - most offer benefits like points, better consumer protections, and opportunities to build credit. But even if I didn’t, plenty of stores in my neighborhood are cashless. Like most adults who are busy and hate carrying stuff, I also do most of my shopping online, where cash is just an abstract concept. (Just watch everyone’s faces in the line behind you when you start fumbling with bills at the checkout counter.) ![]() Paying for everything with cash isn’t just annoying, it’s borderline impossible these days, sometimes even rude. But until recently, I hadn’t thought about the envelope system in years. You can even buy special pre-labeled cash binders and money holders on Amazon. Versions of this strategy have helped a lot of people (including me) with their finances. ![]() ![]() (In Ramsey’s words, “When it’s gone, it’s gone.”) Then you divided that cash between envelopes for each budget category (groceries, transportation, hobbies, etc.) and only spent what was in them. Every time you got your paycheck, you paid your fixed bills (housing, phone, etc.) and cashed the rest. Popularized by the radio personality (and questionable guru) Dave Ramsey over a decade ago, the original envelope method followed a strict formula. The idea is that when your precious paper dollars are tangible and accounted for, you’re less likely to fritter them away on, say, whatever sale tab is currently open. Also known as the “envelope method,” it’s a budgeting system where you pay for things only with the physical cash you’ve allotted for it. Photo-Illustration: by The Cut Photo: Getty ImagesĪre you soothed by the shuffle of crisp dollar bills being counted, stacked, sorted, and slid into labeled envelopes? Do you have trouble keeping track of where your own money goes? Allow me to direct you to the “cash-stuffing” phenomenon on TikTok. ![]()
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