Could Cash Stuffing Be Your Ticket to Paying the Bills?

This approach to paying bills could work really well for you.

Many of us are used to making purchases by swiping a credit card. And the upside in doing so is the convenience of not having to worry about having physical cash on hand, and also being rewarded for the purchases you make.

The problem with credit cards, though, is that they can lead to overspending. And often, that overspending is unavoidable. 

These days, living costs are soaring as a result of rampant inflation. And so many consumers are spending more money than ever to fill up their cars, put food on the table, and cover their utility bills.

If you keep charging those expenses on your credit cards as you always did, you may run into a situation where you can't pay off your balances in full at the end of the month. And that means signing up to pay interest on a pile of debt. 

If you want to avoid that fate, cash stuffing could be the answer.

How cash stuffing works

There was a point in time when credit cards weren't around or weren't as commonly used. Back then, consumers would hand over cold hard cash to pay for their purchases.

Cash stuffing simply reintroduces this concept. Rather than swipe a credit card when you need to buy things, you allocate cash to different expense categories in advance and then physically dip into those cash reserves to make purchases. 

If you've ever tried the envelope system of budgeting, you may already be familiar with this concept. With envelope budgeting, each expense you spend money on gets its own envelope with enough cash to get you through the month. If you go over in a given category, your only choice is to cut back in another category to make up the difference. Ultimately, you can only spend the total cash you have available -- you can't go over.

Is cash stuffing a good system for you?

Given the way living costs are soaring, now's a good time to consider cash stuffing as a means of staying on top of your expenses without going overboard and landing in debt. To use this method, you'll need to take your earnings and divvy them up by expense category. Then, you'll use those allocations to guide your spending.

Here's an example. Say it's the end of the month and your earnings for the month are therefore dwindling down. Maybe you'd normally hit the supermarket, buy whatever you think you need for the week, and charge it all on a credit card, regardless of your total tab. With cash stuffing, you'd instead see how much money is left in your grocery allocation, bring that cash to the store, and see what it buys you rather than do things the other way around. 

Of course, cash stuffing means giving up some of the perks of using credit cards. But if you've been struggling to stay within your budget in the wake of soaring inflation, it pays to give the cash stuffing system a try. It could be just the thing that helps you steer clear of debt and potentially even eke out some savings at a time when expenses are so impossibly difficult to keep up with.