Cash Stuffing

[ltcdfancher]

Hi,
My 40 year-old daughter started cash-stuffing recently. For those that don’t know, cash stuffing involves setting aside cash in marked envelopes for different spending categories and only spending what you’ve allocated each pay period.

I am applauding her efforts, of course. Any method that works for her is better than relying on hope that there will be money left at the end of the month.

She remarked to me the other day, “I’ve been paid nearly the same year-on-year, but I’ve never been this flush with ‘extra’ money.”

My reply was that she wasn’t leaking money out of her debit/credit card. Going to the grocery with $50 in cash forces her to be more diligent in what she’s buying.

What other words of encouragement could I use to keep her motivated on her journey? She is contributing to her company’s 401K, she has a Roth account, and a taxable brokerage account. She will heed some of her father’s advice.

[Decadeofdave]

I used that method for over 20 years when I was young. Really teaches you self control that will last your entire life.

[ElDiabloJoe]

We use the method also. Dave Ramsey advocates it. Over the years it's been called the bucket method, the envelope method, etc. Really helps laser-focus one's spending and savings.

[Stu from NYC]

Hi,
My 40 year-old daughter started cash-stuffing recently. For those that don’t know, cash stuffing involves setting aside cash in marked envelopes for different spending categories and only spending what you’ve allocated each pay period.

I am applauding her efforts, of course. Any method that works for her is better than relying on hope that there will be money left at the end of the month.

She remarked to me the other day, “I’ve been paid nearly the same year-on-year, but I’ve never been this flush with ‘extra’ money.”

My reply was that she wasn’t leaking money out of her debit/credit card. Going to the grocery with $50 in cash forces her to be more diligent in what she’s buying.

What other words of encouragement could I use to keep her motivated on her journey? She is contributing to her company’s 401K, she has a Roth account, and a taxable brokerage account. She will heed some of her father’s advice.

Is she getting the full match on her 401K?

[ltcdfancher]

Is she getting the full match on her 401K?
Yes, Stu. Thanks for checking. I’ve tried encouraging her to put her 401K dollars into the Roth 401K and let the matching dollars go into the traditional. I haven’t been successful…yet.

[Spartan86]

Good advice with the Roth. She is likely paying so little in tax it will be largely unnoticeable. Maybe suggest she go for it for a month or two. She can change her contributions back if it’s a problem. Or average in: change say 2-3% to Roth, see how it goes, up it to 6 etc. Good in her for getting on top of her finances. It is freeing.

[MarshBendLover]

Keeping up with money nowadays can be hard. It's tough with debit cards taking the place of checks. Plus most everybody uses zelle, paypal, cashapp, google pay or venmo off the phone likes it's cash. I had a repair done the other day and at the end the guy said he only accepts zelle, so I called my daughter to pay him through zelle and I would reimburse her. I had 3 other pay apps on my phone, but not zelle. I don't have stripe, apple pay, samsung pay or square either. I'm sure there are other pay apps I don't know, but what a way to lose track of your spending.

[SoCalGal]

What other words of encouragement could I use to keep her motivated on her journey?

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[Two Bills]

My dear old mum had small piles of coins etc. lined up in the kitchen cupboard, as payments for various shops and deliveries.
We never answered the front door, just hid when the rent man called!

[ltcdfancher]

Gosh! I hear you loud and clear. It’s all to easy to swipe away your fortune right from the palm of your hand.

[RoseyRed]

Is she getting the full match on her 401K?
Good question! Do not want to let "free" money pass by!

[westernrider75]

Hi,
My 40 year-old daughter started cash-stuffing recently. For those that don’t know, cash stuffing involves setting aside cash in marked envelopes for different spending categories and only spending what you’ve allocated each pay period.

I am applauding her efforts, of course. Any method that works for her is better than relying on hope that there will be money left at the end of the month.

She remarked to me the other day, “I’ve been paid nearly the same year-on-year, but I’ve never been this flush with ‘extra’ money.”

My reply was that she wasn’t leaking money out of her debit/credit card. Going to the grocery with $50 in cash forces her to be more diligent in what she’s buying.

What other words of encouragement could I use to keep her motivated on her journey? She is contributing to her company’s 401K, she has a Roth account, and a taxable brokerage account. She will heed some of her father’s advice.

I didn’t know there was an actual name for this method of budgeting, but my mom did this for years and it worked for her!

[FredMitchell]

It might be better to just set up automatic deposits from her paycheck into savings and investment accounts. Also, automatic payments with legitimate billers like utilities, her credit card should be always paid off in full. Using cash should be rare. Then she can look back at accounts and compare to what she feels is proper and within her "budget", without actually going to the trouble to set one up. She can also use Bill Pay from her bank account to pay directly from her phone or computer so she does not need to use checks, buy postage stamps, and mail payments herself.

Common "cash leaks" are things like Starbucks, lunches, etc. Give her a copy of "The Automatic Millionaire", by David Bach. With the exception of some of the brokerage firms in there, it is loaded with good and still valuable advice. You can probably get a copy for less than $10 from Amazon. Cheap enough to get yourself a copy, too.

[G.R.I.T.S.]

My mother did this in the 50’s. We didn’t use banks except to cash my dad’s paycheck.

[SeaCros]

Hi,
My 40 year-old daughter started cash-stuffing recently. For those that don’t know, cash stuffing involves setting aside cash in marked envelopes for different spending categories and only spending what you’ve allocated each pay period.

I am applauding her efforts, of course. Any method that works for her is better than relying on hope that there will be money left at the end of the month.

She remarked to me the other day, “I’ve been paid nearly the same year-on-year, but I’ve never been this flush with ‘extra’ money.”

My reply was that she wasn’t leaking money out of her debit/credit card. Going to the grocery with $50 in cash forces her to be more diligent in what she’s buying.

What other words of encouragement could I use to keep her motivated on her journey? She is contributing to her company’s 401K, she has a Roth account, and a taxable brokerage account. She will heed some of her father’s advice.

Things like this should really be taught in school instead of all the “math tricks” being taught these days. They should also teach about debt and credit cards but instead they want to let kids become dependent on credit so they think it’s free money.
I applaud your daughter ability to heed her father’s advice.

[Joe C.]

We used "budget envelopes" over 50 years ago. Back then, you could buy a spiral envelope book that used envelopes instead of pages. Label each envelope for different expenses, and put the allocated money in.
I'd love to find them in stores like Staples or a Dollar Store so I could give them to my adult children to help with their "financial discipline".

[Pat2015]

Hi,
My 40 year-old daughter started cash-stuffing recently. For those that don’t know, cash stuffing involves setting aside cash in marked envelopes for different spending categories and only spending what you’ve allocated each pay period.

I am applauding her efforts, of course. Any method that works for her is better than relying on hope that there will be money left at the end of the month.

She remarked to me the other day, “I’ve been paid nearly the same year-on-year, but I’ve never been this flush with ‘extra’ money.”

My reply was that she wasn’t leaking money out of her debit/credit card. Going to the grocery with $50 in cash forces her to be more diligent in what she’s buying.

What other words of encouragement could I use to keep her motivated on her journey? She is contributing to her company’s 401K, she has a Roth account, and a taxable brokerage account. She will heed some of her father’s advice.
My parents did this when I was a kid, and Dave Ramsey is an advocate of this as well as it works. Good for your daughter.

[nn0wheremann]

Hi,
My 40 year-old daughter started cash-stuffing recently. For those that don’t know, cash stuffing involves setting aside cash in marked envelopes for different spending categories and only spending what you’ve allocated each pay period.

I am applauding her efforts, of course. Any method that works for her is better than relying on hope that there will be money left at the end of the month.

She remarked to me the other day, “I’ve been paid nearly the same year-on-year, but I’ve never been this flush with ‘extra’ money.”

My reply was that she wasn’t leaking money out of her debit/credit card. Going to the grocery with $50 in cash forces her to be more diligent in what she’s buying.

What other words of encouragement could I use to keep her motivated on her journey? She is contributing to her company’s 401K, she has a Roth account, and a taxable brokerage account. She will heed some of her father’s advice.
I did the same thing, except I used a spreadsheet, and kept the cash in the bank earning interest. Back when banks paid interest, long long ago, and far far away.

[ltcdfancher]

It might be better to just set up automatic deposits from her paycheck into savings and investment accounts. Also, automatic payments with legitimate billers like utilities, her credit card should be always paid off in full. Using cash should be rare. Then she can look back at accounts and compare to what she feels is proper and within her "budget", without actually going to the trouble to set one up. She can also use Bill Pay from her bank account to pay directly from her phone or computer so she does not need to use checks, buy postage stamps, and mail payments herself.

She’s traveled that path before. I guess it didn’t seem to resonate with her as much as cash stuffing. I’ll find a copy of the book you recommended, “Automatic Millionaire.” I’m always looking for inspiration too.

[ProfessorDave]

Few thoughts I've successfully used...

A. Book .. "The Richest Man In Babylon.". Read to my grandchildren once a year. Also... Used with my MBA students. Simple. Fun. Educational. Effective.

B. Concepts of encouragement:
"What's in view is what people do..."

"If you aren't measuring it... You are likely not improving it."

"It's not a life habit until you've replicated it at least 21 times in a row" (ie 21 months).

"Success is about discipline... Discipline is doing what you don't want to do... And doing it anyway."

"Achieving purpose is one of the most precious of the God given gift that comes with the feelings resulting from accomplishment."

PS. I'm a fan of Dave Ramsey. He is the most known motivator of the envelope method."

[ltcdfancher]

Give her a copy of "The Automatic Millionaire", by David Bach. With the exception of some of the brokerage firms in there, it is loaded with good and still valuable advice. You can probably get a copy for less than $10 from Amazon. Cheap enough to get yourself a copy, too.
Found the physical book in my local library. It was available, too, for my Kindle.

[rjm1cc]

Used that system when I started out. Also used separate savings accounts for annual bills. A lot easier than the traditional budgeting system since an empty envelope is empty.

[CybrSage]

We used "budget envelopes" over 50 years ago. Back then, you could buy a spiral envelope book that used envelopes instead of pages. Label each envelope for different expenses, and put the allocated money in.
I'd love to find them in stores like Staples or a Dollar Store so I could give them to my adult children to help with their "financial discipline".

They sell them on Amazon. Search for spiral cash envelope book.

[JanRoberts]

We applaud Dave Ramsey, have a son working in the Nashville office, but cash in an envelope doesn't earn you any more cash. We earmark what we put in checking, savings, the market, etc., for a certain thing to get more bang for our buck. We also play "credit card" games and take advantage of all the perks that come with the cards and pay everything off monthly. With fiscal responsibility you can use credit cards to your advantage, which the Ramsey method advises not to do.

[nmgirardot]

She's following the Dave Ramsey method as we have been doing for the last 15 years. We have only good things to say. It changed our financial mindset so much that I ended up being a Financial Peace coordinator for 5 years. Our only regret is that we that we didn't start sooner.

[nmgirardot]

Our local high school uses Dave Ramsey's Financial Peace University course for their financial literacy course for the juniors and seniors. The church we attend offers the course for free at least once a year.

[Mrfriendly]

Hi,
My 40 year-old daughter started cash-stuffing recently. For those that don’t know, cash stuffing involves setting aside cash in marked envelopes for different spending categories and only spending what you’ve allocated each pay period.

I am applauding her efforts, of course. Any method that works for her is better than relying on hope that there will be money left at the end of the month.

She remarked to me the other day, “I’ve been paid nearly the same year-on-year, but I’ve never been this flush with ‘extra’ money.”

My reply was that she wasn’t leaking money out of her debit/credit card. Going to the grocery with $50 in cash forces her to be more diligent in what she’s buying.

What other words of encouragement could I use to keep her motivated on her journey? She is contributing to her company’s 401K, she has a Roth account, and a taxable brokerage account. She will heed some of her father’s advice.

“Remember dear daughter, never spend more than you make”

[Markus]

I would have her do a budget spreadsheet. Breaks down where the money is all going and how much is left each month. You can then easily see water bill, cable bill, other expenses and how much income minus expenses is each month. Excel has example spreadsheets in it as well as Macs Pages. The nice thing about these is once you input the info it it will give you pie charts showing home much is going out for each and how much wasn't spent.

She is off to a terrific start. I applaud her and you. Very few young people do this.

[Stu from NYC]

Things like this should really be taught in school instead of all the “math tricks” being taught these days. They should also teach about debt and credit cards but instead they want to let kids become dependent on credit so they think it’s free money.
I applaud your daughter ability to heed her father’s advice.

Agreed. Do not understand why schools do not make courses in personal finance mandatory

[USNA87]

She's following the Dave Ramsey method as we have been doing for the last 15 years. We have only good things to say. It changed our financial mindset so much that I ended up being a Financial Peace coordinator for 5 years. Our only regret is that we that we didn't start sooner.

Same here. My wife and I attended Financial Peace University when we got married and having been using the envelope system since. We also have a monthly budget that we stick to very diligently. This has all paid off for us, setting up our financial future. I have taught FPU in the past.

[nmgirardot]

Monthly budget is a must.

[ltcdfancher]

Agreed. Do not understand why schools do not make courses in personal finance mandatory
Educators are catching on; a handful of states (Florida is one) that requires a high school personal finance course as a condition of graduation.