Pros And Cons Of Cash Stuffing
There are certain financial tools and techniques people love to use. They might not work for everyone, but some individuals swear by them. Sometimes, a financial technique will rise to prominence and make a lot of headlines seemingly overnight. Cash stuffing has been in the news a lot lately, and you may have heard it discussed on social media. We’ll explain what cash stuffing is and talk about some of its pros and cons in the following article.
What is Cash Stuffing?
Cash stuffing is a budgeting technique. If you employ it, you cash your paychecks when you get them, and then you put the cash for each bill or expenditure in a separate, marked envelope.
You keep the envelope with the cash in it until that particular bill is due. Then, you use the money you put in the appropriate envelope to pay off each financial obligation.
The cash stuffing budgeting technique is a popular way to manage one’s finances, but it does have its pros and cons. On the plus side, this method can help people to save money by setting aside cash for emergency expenses. This way, they won’t have to rely on credit cards or emergency loans. Additionally, the cash stuffing budgeting technique can help people to stay organized and on track with their spending. On the downside, however, this method can be inflexible. Once the cash is set aside for emergency expenses, it can be difficult to access it for other purposes. Additionally, if an emergency does arise and the money is needed, it can be difficult to replenish the savings. Overall, the cash stuffing budgeting technique has its advantages and disadvantages. It’s up to each individual to decide whether this method is right for them.
Cash Stuffing Pros
One of the biggest pros of cash stuffing is you’re planning for each bill in advance. Take rent, for example. You put the appropriate amount in the envelope marked “rent.” When the time comes to pay rent, you won’t have to check your bank account to see if you have enough money.
Cash stuffing works well if you know you’re an absent-minded person. It’s a great way to plan ahead and ensure you never come up short.
Cash Stuffing Cons
This system does have some drawbacks, though. For one thing, if you engage in cash stuffing, you’ll always have larger amounts of money at home than might be advisable. If you pay your bills using a check or credit card, you don’t leave yourself open to theft.
If someone tries to write a check in your name, you can identify that account activity as fraudulent and notify the bank. If someone steals a credit card, you can call the company and cancel it. If a thief steals money from your envelopes, though, you’re pretty much out of luck.
Also, some entities are reluctant to accept cash. They would prefer a personal check, money order, or credit card payment. It’s usually not the best idea to send cash through the mail, and you might have to go out of your way to pay some of the entities in-person to which you owe money.
Cash Stuffing Has Benefits and Drawbacks
Cash stuffing is all the rage in some circles, and if you try it, you might find that it works well for you. It’s a way to have your money ready for each bill in advance, so you won’t have to scramble to come up with it near the due date.
However, cash stuffing means you’ll have money in your residence, leaving yourself open to theft. Also, some entities would prefer that you not pay off your bills in cash. It’s probably a bad idea to send money through the mail, so you’ll need to pay these creditors in person.
If you’re interested in cash stuffing, you might try it for a while to see if it works for you. If you find that it’s not the best fit for your situation, you can always try something else.