How to Build Savings with a Cash Stuffing Challenge

Saving money is hard. Most people spend what they make as soon as they make it, and many struggle to even make it to their next paycheck. 

But building a savings nest egg is important for a number of reasons: it can help you weather unexpected expenses, save you from using costly credit products, and tide you over if there's a break in your income.

If saving money is a goal of yours (and it should be!) consider creating your own cash stuffing challenge as a fun and interactive way to make saving money a regular habit.

What is cash stuffing?

Cash stuffing is just another term for envelope budgeting. You literally stuff cash into envelopes, which are assigned to different categories of your budget. Using cash sets a hard limit to your spending: once you're out of cash, you're done spending in that category for the month.

The major advantage of cash stuffing is that it makes your money more real. Unlike using credit or other digital payment methods, you can actually see the stack of cash in each envelope get smaller throughout the month, which can help you become more intentional with your money. 

What's a cash stuffing challenge?

A cash stuffing challenge is like envelope budgeting, but in reverse. You challenge yourself to put a certain amount into each envelope, not to spend, but to save.

The concept is highly customizable, so you can create a challenge that fits your abilities, but the premise is basically this:

Set your challenge

Decide on the amount you want to save, how often you want to save, and how long you want the challenge to run for. Challenges can be daily, weekly, or whatever frequency you choose. 

Create your envelopes

You marked each envelope with a dollar amount, and when that envelope comes up, you put the listed amount of cash inside. Typically, the amount changes for each envelope.

You can make the envelopes with as much (or as little) artistic flair as you like. Plain envelopes work just fine, but taking the time to decorate each envelope you add to the fun.

Start the challenge and start picking envelopes

Once the challenge starts, you pick up an envelope every day or week and save the amount listed on the envelope. Then you simply stay committed to your challenge schedule. 

The beauty of the challenge is that each envelope may only require a small amount of cash, but by the end of the challenge you'll find that you've saved quite a bit of money.

100 envelope challenge

One of the more popular cash stuffing challenges is the 100 envelope challenge. As the name suggests, you're going to need 100 envelopes. 

Once you've got your envelopes, you'll number them all from one to 100. This is a daily challenge, so every day you'll pull an envelope and save the amount listed.

You can select the envelopes in order (1, 2, 3, 4, etc.) or you can randomize them. After 100 days you'll have saved $5,050.

If that number feels daunting you can choose different amounts for the envelopes (10 $1 envelopes, 10 $2 envelopes, etc.). Feel free to start small for your first challenge. The goal is not to overstress your finances, but to build a savings habit. Setting aside money for savings when you have so many expenses can be tough, so learning that even small contributions add up over time is an important lesson.

Do you have to use cash?

The major drawback to envelope budgeting and cash stuffing is, well...all that cash. Many of us have largely abandoned using cash in recent years, so suddenly carrying the majority of your monthly income in cash may be uncomfortable.

Luckily, you don't have to use cash. You can still draw numbers on a daily or weekly basis, but then transfer that amount immediately into savings. It's a little less tactile and satisfying, but saves you from the risks involved with having lots of cash on hand.

If your expenses are making it too hard to set even a small amount aside for savings, consider working with a trained financial expert. MMI offers free financial counseling to help you better understand your finances and create a plan to reduce debt, balance your monthly budget, and start building savings.