The power of compounding interest can be hard to resist. If you’re not careful, your money will soon disappear in a sea of credit card debt. Here’s how to avoid overspending with this cash stuffing technique.
The dave ramsey envelope system is a technique that allows users to save money by stuffing cash into envelopes.
Compartmentalizing your finances allows you to see where your money goes (Picture: Getty Images)
This one can guarantee you’re not overpaying – something that’s essential for all of us, especially after the financial turmoil caused by the epidemic. TikTok is full of tips and techniques to make our lives simpler, and this one can ensure you’re not overspending.
People on the site have shown a new savings method that may offer you a feeling of financial responsibility by allowing you to see precisely how much money you have left over from paychecks.
Mum Sacha Renee is one of the individuals who is working to popularize the technique, which is known as cash stuffing, and demonstrating that conserving money isn’t only for the affluent.
Bills are paid out of their bank account each week when her boyfriend gets his salary. What’s left is taken out in cash and divided among many bags.
Sacha ‘stuffs’ her envelopes, which are labeled with what the money will be used for, once a week.
Food, Christmas, clothes, toiletries, birthdays, leisure, dining out, and other categories are included, with the mother setting amounts for some and placing an ad hoc amount in others based on the earnings they received that week.
With more and more artists posting their cash stuffing videos and pushing others to attempt the trick, it’s becoming a popular trend.
All you need are some envelopes or pouches if you wish to participate. You can buy budgeting binders with pouches online, much like Sacha’s, and customize each envelope for the areas that make sense to you.
Healthcare, spending money for each family member, haircuts, dental care, house costs, and a general rainy day reserve are examples of these (in addition to those listed above).
When you are paid, take care of the necessities first, such as rent and utility payments, and then cash anything else.
Knowing how much money you have left allows you to prioritize your spending based on percentages. If your salary is lower one week or month, you may opt to skip a lunch out and put more money toward your dental care.
Additional Information: Health
The precise quantities are up to you – and will be determined by your income – but instead of depending on applications, you’ll be able to more readily measure exactly what’s left (and potentially overdoing it on card and contactless payments).
You don’t have to spend everything in your pouches right immediately. Sacha, for example, puts £10 in her toiletry envelope every week, although she may not need to purchase anything in this area for weeks at a time. Because you’ve properly budgeted, you’ll be able to save money by purchasing in quantity.
Money management is a skill that we all need, and although this method seems easy, it gives many people power. We won’t be able to purchase items we can’t afford because once the money is gone, it’s gone.
Join our Facebook Group, Money Pot, for more money-saving tips and techniques, as well as a cash conversation and notifications on bargains and discounts.
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