In an old interview with the actors Gene Hackman and Dustin Hoffman, Hackman shares a memory from one visit he made to Hoffman’s tiny apartment in Pasadena well before either of them had made any real money. As Hackman tells it, Hoffman kept mason jars full of cash in his kitchen, with each one labeled for a different part of his budget. “One says ‘rent,’ one says ‘entertainment,’ one says ‘books’ … about five of them,” says Hackman. “They all had money in them except for the one that said ‘food.’ He said, ‘Hey, can I borrow some money?’ I said, ‘You don’t need any money! You’ve got money!’ He said, ‘I can’t take the money out of the other jars.’”
The two laughed, joking that it was probably Hoffman’s mom who taught him the mason jar banking method. And, really, it probably was. For anyone over the age of 40, this tale likely evokes stories you’ve heard in your own family: great aunts with cash strapped to the bottom of the dining-room table, grandparents who cut a small hole in the mattress to store savings, maybe even your mother who kept envelopes of cash in the kitchen drawer to track her monthly spending. The idea behind the method is that when the cash is gone, it’s gone, and you're done spending. If you’re able to see in real time where your money is going, you’re better able to pay down debt and, ultimately, save.
The concept is age-old, incredibly simple, and outrageously low-tech. And right now it’s having a moment in our TikTok-obsessed, fintech-leaning culture where, one Pew Research Trust study shows, younger generations are less inclined to use cash. Hoffman’s approach has historically been called the envelope method, though today the term being tossed around social media is “cash stuffing.”
Instructional videos explaining this method are popping up on YouTube, TikTok, and Instagram. They typically show a set of beautifully manicured hands moving cash from a withdrawal envelope or a wallet into a cash-stuffing binder (a series of envelopes or an accordion envelope), with each section labeled for a line item in the budget: rent/mortgage, food, utilities, car, insurance, entertainment, travel, and so on.
There are also lessons on savings challenges for distinct periods of time or specific amounts of money. In the 52-week challenge, the videos teach you how to allocate an increasing number of dollars per week for savings over the course of one year. Other videos provide instruction on building a rainy-day fund or a six-month kitty to cover your expenses should you lose your job. And there’s carefully choreographed swag too. The binders, envelopes, piggy banks, wallets, and other gear are often different colors or feature various themes such as illustrations, emoji, or phrases written in artsy fonts.
One TikTok account, @baddiesandbudgets, has more than 650,000 followers and has spawned a legitimate business aimed at helping others organize their finances and peddling some of the cash stuffing gear she uses in her videos: piggy banks, envelope binders, budgeting templates. Jasmine Taylor, the Amarillo, Texas, woman behind Baddies and Budgets, says the company has four employees including herself and is on track to pull in $1 million by year-end. A quick scroll through Instagram garners tens of thousands of posts with a cash stuffing hashtag, while Taylor has landed on CNBC, USA Today, The New York Post, and Black Enterprise to discuss it.
Our newsfeeds are often awash in old ideas dressed up as modern-day memes. But that an idea so truly unoriginal and simplistic is carrying so much heft in an economic culture that’s become increasingly complicated and reliant on technology is fascinating.
“This is genius,” says Heather Loomis Tighe, a venture capital adviser and partner, and strategic adviser to Family Offices, formerly of BlackRock and JPMorgan. “It reestablishes a connection to money, which we’ve lost with the electronic movement of it.”
Travis Sholin is a board member at the Financial Therapy Association and cofounder at Keystone Financial Services in Omaha, Nebraska, who completed doctoral research in financial psychology and therapy. He says our brains physically change when we shift spending from plastic, or even electronic, to paper. “It’s more painful to spend cash,” says Sholin. “When you use physical money, you’re using a different part of your brain.”
That difference, he says, explains why the average cash transaction is roughly $20, while using credit the average spend is $112. There’s something visceral about handling and letting go of bills that creates an opportunity to consider its value in a transaction. Cash stuffing offers that opportunity in a way that paying with plastic and apps like Square, ApplePay, and Venmo don’t.
Taylor at Baddies and Budgets admits she never really thought much about the difference until she physically made it more difficult for herself to spend money, switching from the swipe-and-click approach to handing over cash. “I was a person who hardly ever used cash,” she says. “We’re encouraging our users to change the neural pathways in their brains. When you want to make a big purchase this way, you have to physically go to the bank and deposit the cash. We are a generation of people who have never really dealt with money.”
Like any idea taken to an extreme, there are limits to cash stuffing. Saundra Davis, a California financial coach and past president at the Financial Therapy Association, says it’s important to eventually graduate from it in the name of investing and long-term planning. “If having the cash in your hand gives you the feeling of power and control that you know where your money is going, build on that for your well-being,” says Davis.
It’s important, says Tighe, to leverage the confidence and control the practice builds with actual, smart investment know-how. For instance, real estate tends to be a go-to asset class for many looking to plant and grow their money, though it isn’t necessarily always the best play just because it’s the most palpable or visual expression of an investment. “You can see a plot of land,” she says, “whereas when I go into my E-trade account, I feel nothing.”
This trend is in some ways a sobering, a detox of old habits and inherited biases carried from childhood to adulthood. Cash stuffing is like a financial Whole30, breaking things down in the most clear and concise structure possible. And, the thing is, like most forms of purging and regrouping, it works.
“We haven’t had a form of financial education in the US, ever,” says Tighe. “Once someone leaves their family unit and is expected to exist on their own, they’re looking for anything and anyone to tell them what to do. In the world of finance you can be taken astray so easily.”
As our country faces rising consumer debt and an overwhelming feeling that the economy is worsening by the day, there’s an undeniable mental health benefit to the approach. Pulling away from fintech and retracting to a simpler approach could truly calm our anxiety and help us regain control of something that, for some, has most certainly spiraled out of grasp.
“This generation grew up with stores of value that have been challenged over the course of the past 72 hours to one year,” says Tighe, nodding to the recent unraveling of banks like Silicon Valley Bank and First Republic. “There are so many things that play into a movement. The fact that they’ve been tethered to their phones and are interested in improving their financial and mental health are all pointing to this.”
And if you don’t believe the TikTok video, at least take it from Dustin Hoffman’s mom.
