Cash stuffing helps South Australian family from $12k debt

A revived trend which has given cash a new purpose has helped a South Australian couple rebuild their lives after years of credit card debt and financial strain.

After buying their first home, mother-of-two Nissa and her husband were hit with the bitter truth they were losing $12,000 a year due to “reckless spending”.

The staggering discovery was the “last straw” for the now 31-year-old, prompting the couple to change their spending habits and look into budgeting.

“It was shocking to realise just how much money we were haemorrhaging,” Nissa told news.com.au.

“It was like pouring water into a colander and wondering why nothing was staying in it.”

Nissa stumbled upon her family’s saving grace on YouTube, which was a video about an old-school saving method, today known as “cash stuffing”.

The budgeting trend involves withdrawing money – typically your monthly earnings – from your bank account and allocating it to a folder, envelope or case which represents a specific spending category.

Folders may represent weekly shopping budgets, fuel costs, mortgage repayments, bills or holiday savings.

“A cash stuffing video popped up on my suggestions page on YouTube and I was hooked,” Nissa said.

The trend is largely popular in the US and UK, however it’s starting to slowly gain popularity in Australia. The hashtag “cash stuffing” has amassed more than 532 million views on TikTok.

While the money-saving method closely mirrors how some people organise their online bank accounts, there’s a psychological aspect behind the trend that’s not always experienced through internet banking.

Daniel Jovevski, WeMoney CEO and founder, said behavioural scientists have found that physically seeing how much cash a person has to their name stimulates a sense of “pain” when they see that money go, preventing the urge to further spend.

“When we pay with cash we feel a little pain when we see the amount of money leave our wallets or envelopes,” he told news.com.au.

For Nissa, the cash saving trend brought her joy that she didn’t feel through internet banking.

“(There’s a) sense of achievement. I’m physically seeing my funds grow, I’m physically seeing the improvements to our financial stability and we are slowly getting closer and closer to not living pay-to-pay,” she said.

“Physically being able to hold the money, to count it and see it grow – for me that is far more inspiring and motivating than seeing a number on a screen.”

One concern that comes with cash stuffing is how to do it securely, with the fear that theft, fire or simply misplacing it could result in the loss of hundreds of dollars.

While Nissa enjoys seeing her savings grow, she admits that she does have a limit on how much cash she keeps at home.

“The cash envelopes that we use for everyday spending don’t stay ‘stuffed’ for long,” she said, explaining that the envelope’s contents is a reflection of how much money the family needs for essentials.

Then, once her other envelopes meet a certain amount, Nissa will deposit her savings into a locked account at the bank.

“I keep a record of how much money is to be allocated to what things and then I continue saving,” she said.

“The binders I use are A6 in size and are small. They are quick and easy to grab and often I will take my cash envelope binder with me when I run errands.”

Nissa and her husband have now made up for the $12,000 they were haemorrhaging each year and have since managed to save an additional $1,600 in the last six months, but their success didn’t come without its challenges.

“I have been trying to make the cash stuffing method work for us for the last four years and it’s not really until the last six months that it has – and that’s because I was trying to make everyone else’s methods work,” Nissa said.

“Everyone’s finances are different, everyone’s expenses are different and everyone’s debt is different, so we found that having a combination of a few methods is what works best for us.”

One particular inspiration who has helped Nissa’s family increase their savings is Australian small business owner Caroline from CAROCASH, who has helped Nissa “find her groove” with the cash stuffing system.

“Since changing my system and having tweaked it for our personal situation our finances have improved,” Nissa said.

Nissa encourages anyone who is struggling with their finances to try cash stuffing and suggests that prospective savvy savers look to others for inspiration as a starting point.

She recommends searching YouTube for a how-to guide on the method, and suggests that those lacking inspiration browse Etsy for Australian-made cash stuffing supplies such as binders and cash wallets.

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“I’ve learnt it’s a system that you tweak as you go along,” Nissa said.

“Baby steps, zero-based budgeting, and cash envelopes – we have taken aspects of them all and morphed them into a system that works for my husband and I.”

“That’s the best thing about all of this, there are no rules. Just do what works and what feels comfortable for you.”

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