Rachel Cruze: How Cash Stuffing Can Help Stop Overspending

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Personal finance expert Rachel Cruze believes that when it comes to budgeting (in particular, not overspending), going back to basics can help. And in a recent Ramsey Solutions article, Cruze explained why she is a big proponent of the so-called “cash stuffing” method.

“The cash envelope system — also known as cash stuffing — is a way to track exactly how much money you have in each budget line for the month by keeping your physical cash tucked away in labeled envelopes,” she said in the article. “If you’re constantly going overboard in a certain area of your budget (hello, food), then cash stuffing can help get your spending under control!”

In essence, cash stuffing is stashing cash in different envelopes or binders that are allocated to different financial necessities. These categories can include rent or mortgage, gas, groceries and vacations. Cash stuffing is a popular method of budgeting, and is attributed with helping many people achieve their personal financial goals.

The technique went viral on TikTok a few years ago and there are still countless videos touting its benefits, such as budgeting and even paying off debt.

Cash Stuffing Can Help To Limit Overspending

As Cruze argued, this method is also extremely helpful in terms of trimming excess spending.                                                                                                        

“Take your envelopes with you when you head to the grocery store, run errands, or go out to eat. And (here’s the super important part) only use the assigned cash to make your purchases,” she said.

She also noted that if you spend all of your allocated cash in the first week, you will need to “cut back the rest of the month.”

“I know — it’s hard. But it’s better than constantly overspending,” she added.

Yet, while this method can help with budgeting, it can also sometimes be tricky to abide by, as it requires a lot of discipline.

“Cash stuffing gives you a physical reminder of what you’ve spent and limits your available funds. Plus, it could prevent you from overspending,” an Ally blog post indicated. “But it has its limitations. We are living in a digital world where the vast majority of payments are made online, by phone or via a credit card. Having the discipline to stick with cash won’t be easy.”

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