Pros and Cons of Cash Stuffing to Beat Debt

If you’re one of the 14 million Americans struggling under significant credit card debt, it’s time to take control of your personal finances with a powerful budgeting tool called cash stuffing.

Many normal people dealing with massive debt, small incomes, and a history of bad money management have used cash stuffing to achieve financial freedom…often much faster than they thought possible.  

One YouTuber has dozens of credit cards. Each one of those cards has a significant deferred payment, leaving her with a total debt of over $11,000. She’s only got a small amount of money left after expenses each month. Yet in just a few short months cash stuffing has enabled her to set aside a few hundred a month…and she’s already paid off four retail cards.

Another TikTok star who goes by @lilyrnbudgets had over $17,000 in debt.

A 22-year-old nurse, she had all the expenses and no resources. Which made breaking her reliance on credit cards and setting aside money every month extremely hard, at first. Two-and-a-half years later she has a half a million followers, and…

…She’s completely debt free!

Cash stuffing can help you become part of a positive money-management community online, break a toxic dependency on credit cards, and pay off incredible amounts of debt. 

What is Cash Stuffing?

Simply and literally, you’re cash stuffing when you start using stuffing cash into category envelopes in order to pay for your monthly needs. You’ll take out your paycheck in cash, split up your budget, and put cash into different envelopes that represent different needs, wants, and financial goals in your life.

One envelope might be “gas,” while another could be “clothes,” and a third one should be the “debt,” category.

How Cash Stuffing Works

The first step is to create a budget. Which is a good idea for every style of money management, because many people are shocked when they realize what they really spend in a month, especially when it’s higher than their monthly income.

Example of cash stuffing, envelope stuffing to beat debt
Photo by Karolina Grabowska from Pexels

There are different ways to make a good budget, but you should always start with non-negotiable living expenses:

  • rent
  • utilities
  • car payments

After that you should have a limited amount for things that can vary, like $500 a month for groceries and $400 for gas. And then, with whatever’s leftover from your monthly income, you start with the personalized categories, like clothes, gifts, or a savings envelope for debt payment.

The difference between regular budgeting and cash stuffing, is that with cash stuffing your budget is physical, visual, and non-negotiable.

Benefits to Cash Stuffing

Cash stuffing can help you break a dependence on credit cards. For some people this dependence can become toxic, and may even become an addiction, which always leads to some debt. However, even if you’re not dependent solely on credit cards or dealing with debt, there are a few other strong benefits to the cash stuffing method.

Physical Limitations to Spending

Arguably the number one benefit to the cash stuffing method is the fact that you can only spend what you’ve got on hand. How many times have you let that extra $2.50 – or $250 – slide at the checkout when you’re sliding plastic?

On the other hand, how often have you done that with only a $20 bill in your pocket?

Incredible Money Saving Strategy

Almost everyone who’s ever tried cash stuffing reports that they end up saving more money than they ever thought was possible.

Whereas using credit will almost always end up edging you over your budget limits at the end of the month, using cash will push you towards under-spending your limits. It might only be a couple of bucks, but it could be upwards of a couple hundred dollars left in your different category envelopes every single month.

Discipline Creates More Financial Freedom

Using the cash stuffing method takes discipline.

Creating a budget, dividing your income, and sticking to those guidelines might be uncomfortable in the beginning, but in the end, being able to restrain your personal finances is arguably the most powerful freedom tool you’ll ever develop in yourself.

Whether that’s saving for a dream vacation, building a business, or retiring early, cash stuffing can be a powerful to helping you achieve financial freedom.

Cash Stuffing Allows for Gamification of Your Finances

Cash stuffing often starts to feel like a game you can win. When you’ve got a goal of putting those green papers into envelopes every month, there’s a level of “winning” pride when you’ve got money left over, or you can put in an extra $15-$100 per envelope.

Credit cards, on the other hand, provides very little pay off satisfaction.

Even if you manage to pay the entire amount at the end of the month, you don’t get the buzz of retail therapy, which can depress you. And allowing negative emotions into your overall relationship with money is how things like credit addiction and deep debt gets started.

Drawbacks to the Cash Stuffing Method

Of course, no system is perfect. You may find that cash stuffing imposes certain practical limitations to your lifestyle.

Lack of Mobility

Relying solely on cash in the modern world is a little like relying on an electric car in the country. You can only go as far as the battery – or the cash – lasts. And you may find yourself being unable to travel, shop online, or handle an emergency.  

Having Cash-on-Hand can be Risky

One of the most serious negatives to cash stuffing is the problem of having significant amount of cash-on-hand.

Some people who’ve tried cash stuffing have mentioned the severe discomfort of withdrawing the necessary several thousand dollars to live on for a month.

If you’re known to keep significant amounts of cash in your home or on your person, you may be increasing your chances of getting robbed. Also, there’s no way to “stop payment” on cash the way there is on a credit card.

Cash Stuffing Might Have a Negative Effect on Your Credit Score

A more subtle limitation to using cash in today’s world is that you may, at some point in the future, need a good credit score in order to make a large purchase, such as securing a mortgage on a house.

If you never use a credit card at all – which some fans of cash stuffing recommend – you won’t develop a good credit score…or any credit score at all, which could harm your chances of getting a loan for a business or a car.

A more practical solution would be to keep one or two major credit cards.

Use them to pay for things like hotel reservations, online purchasing, and other situations where credit is preferred. Just make sure that you’ve budgeted for these purchases, and pay off the entire amount at the end of every month.

The pay-as-you-go method will keep you from incurring interest rates on the principle, and is the best way to build a very healthy credit score.

Can Cash Stuffing Really Get You Out of Debt?

In the end, the only person, tool, technique, or power on this planet that can truly get you out of debt is you. It’s your determination, your drive, your hard work, your thriftiness that will make or break the bank.

With that being said, cash stuffing is a powerful tool that works well for beginners, compulsive spenders, and hardworking people chained to a credit card every day.

Convenience is dangerous for building an empowered mindset, which is the belief and confidence in yourself that allows you to achieve financial freedom. Credit provides that convenience, while a discipline like cash stuffing has multiple positive psychological benefits.

Cash stuffing can help to:

  • limit your spending
  • itemize your budget
  • discipline your mindset
  • cultivate a healthy emotional relationship with money
  • and save some from your paycheck every month

So, if you’re struggling just to make ends meet every month, if your credit cards just keep adding on to your monthly balance due, or if you can’t save the money for that dream you’re waiting on…cash stuffing could be the solution for you!

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Suzanna "The Challenge Queen" Fitzgerald

This is a portfolio sample of writing by Suzanna “The Challenge Queen” Fitzgerald. The topic / keyword was “cash stuffing to beat debt.” The challenge was to create a unique article that would stand out in terms of:

  • usefulness
  • interesting subject matter
  • relatability
  • and authoritativeness

…Among a literal ocean of other articles on cash stuffing. (Personally, I think I met the challenge!) What do you think?

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