Why the Old-School Cash Envelope Method Is Trending on TikTok – Business Insider

I’m innocently scrolling down my TikTok feed when I see a video of a woman with pristine acrylic nails stuffing cash into categorized envelopes. “I’m back with another cash-stuffing video!” she announces.
I immediately hit the #CashStuffing tag on the video, and hours later, I’m still in a cash-stuffing rabbit hole watching influencers like @rebeccabudgetguru, @cashstuffingfix, and @cashstuffinglife share their budgeting tips.
Cash-stuffing is a new name for the old-school cash envelope system, which involves putting cash into envelopes labeled for specific budget categories like rent, groceries, gas, insurance, healthcare, and more. Videos under the #CashStuffing hashtag have collectively earned 229.2 million views, with the most popular videos earning to 800,000 to 1.2 million views each.
Most of the people who post cash-stuffing videos are women who are trying to curb compulsive spending and refuse to rack up any more credit card debt. 
Here’s how the cash-stuffing process works:
I spent so many hours fascinated by this trend that I decided to ask a financial behaviorist and a financial therapist to weigh in on why cash-stuffing is so effective for some people. Aside from the fun of watching it, cash-stuffing primarily serves two purposes for the envelope-holders: freedom from keeping track of all your money in your head, and the ability to make sure your money is going where you want it.
Financial behaviorist Blain Pearson, Ph.D., CFP points to a concept called mental accounting — mental energy spent thinking about unpaid bills or just-for-fun spending categories — that causes stress when you don’t track your spending or manage your budget properly.
The cash-stuffing method relieves the stress of mental accounting because you know exactly where your money is going, and that your bills have already been taken care of. Pearson uses the example of going out to a bar after all of your bills are paid: People are more likely to have fun with their friends knowing they don’t have to worry about dipping into their rent payment to make it happen.
Cash-stuffing isn’t the only way to do this — it’s really a physical version of automating deposits into multiple bank accounts, or bank account “buckets” — but there’s a reason experts often recommend that people who struggle with spending on cards use cash instead: The tangible act of touching bills adds an awareness and feeling of control to exactly how much goes where (and that same awareness when you spend it).
Plus, portioning out your money ahead of time, whether that’s cash-stuffing or allocating it between bank accounts, “creates more mindfulness so that you can spend congruently with what you value,” says financial therapist Megan McCoy, Ph.D., LMFT, AFC, CFT-I. For example, if going out to the bar and spending money on drinks with your friends makes you really happy, why not plan to spend money on it?
Deciding in advance where your money should go can allow you to “feel entitled to spend money on yourself, especially if you have plenty in your budget to take care of yourself, but don’t always do it,” says Pearson. 
Some cash-stuffers are moms who share family budgeting tips, while still prioritizing keeping cash envelopes for self-care. In their videos, they often say that tending to their own happiness makes them a better parent.
I’ll be the first to admit that even though I love watching these cash-stuffing videos, I probably will never try it. The idea of putting my cash in envelopes seems inconvenient when I pay all of my bills digitally. I love watching these videos because I get motivated to save, little by little, for long-term goals, plus the sound of cash is just soothing. But I’d rather rely on a digital equivalent that gives me the same kind of satisfaction.
“It’s not always the act of cash-stuffing that’s [satisfying],” says McCoy. She also points out that turning saving and budgeting into a game can feel good. For viewers, it’s satisfying to watch someone sift through stacks of cash and share how they’re going to spend it.
Even though cash-stuffing is addictive, there might be other options that best suit your lifestyle, like budgeting apps such as Zogo, which gamify budgeting and financial literacy. Or start a competition with your friends and family in the group chat to see who can reach a savings goal first.
In general, experts only recommend keeping cash savings if you have trouble controlling your credit card usage and paying off your bill each month. As McCoy says, “At the end of the day, I’d rather have people use credit cards with a great rewards system.” 

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Read our editorial standards.


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