A millennial tried out the TikTok-famous cash stuffing budget method — and said it helped her pay off a $19,000 car loan ahead of schedule

• Cash stuffing, an old-school budgeting trick, is gaining popularity among young people on TikTok.
• Cash stuffing involves putting cash in labeled envelopes to help people track their spending.

Berenice Rodriguez, a 29-year-old dental assistant in North Carolina, said she used to have a bad relationship with money and spent way too much on eating out and things she didn't need.

"The most confusing part of this journey was figuring out where my money went," Rodriguez told Insider. "I paid my bills, but everything else felt like it went down the drain."

But in June 2020, Rodriguez said, she heard about a budgeting method called cash stuffing through a TikTok video. She said it turned her financial situation around.

Rodriguez and her partner paid off their $19,000 car purchase earlier than expected and have saved over $11,000 toward a home, documents viewed by Insider showed.

Cash stuffing involves using envelopes to divide up cash for rent, groceries, gas, and other things. TikTok videos with the hashtag #cashstuffing have collectively been viewed over 970 million times.

When Rodriguez gets paid, she said, she takes the money out of the bank and stuffs it in envelopes designated for different budget categories or financial goals.

"Cash stuffing has been tremendously helpful to me," she said. "I see where my money is going, and when I stuff my money, it forces me to only spend the certain amount that is in that envelope."

Last year Rodriguez joined the ranks of TikTok cash stuffers — she documents her budgeting journey for over 11,000 followers. She said she does this to hold herself accountable and motivate others to give cash stuffing a try.

Many Americans have seen inflation take a toll on their finances, and a surge in interest in cash stuffing suggests many people are open to trying something different to get their budgets in line.

The Federal Reserve Bank of New York said it found that US credit-card debt rose by $61 billion in the fourth quarter of last year, the largest increase in the history of its data, which dates back to 1999. While older borrowers missed credit-card payments and became delinquent about as often as they did before the pandemic, Americans in their 20s and 30s had higher delinquency rates than they did pre-pandemic, the New York Fed said.

How cash stuffing works

While Rodriguez attributed much of her financial improvement to cash stuffing, she said the journey hadn't been easy.

She said that early on she'd often go way over budget on certain categories and have to use funds from other envelopes. But as she monitored her expenses over time, she said, she figured out numbers that worked for her budget.

She said that every two weeks, when she and her partner get paid, she allocates $300 for their future home, $230 for groceries, $120 for her two dogs (and $50 for the dogs' emergency fund), $100 for takeout, $100 for fun, $100 for vacations, $30 for beauty and health, and $30 for miscellaneous expenses. (Other categories get inconsistent amounts.) For some large budget categories, like her future home fund, she said she puts fake placeholder bills in envelopes to represent the cash.

While her budget is more consistent than it used to be, she said she still has to make some tweaks every so often. Her grocery budget used to be $200, for instance, but she said that higher food prices caused her to increase it to $230 in March.

Rodriguez said she keeps the money for her rent and utilities in her bank account. When she has extra cash in certain envelopes at the end of the month, she lets it roll over to the next month.

She said that while she tries to buy things with cash as often as she can, when she buys something online with a credit card she deposits cash from that designated envelope into her bank account and then pays off the card balance.

Why you shouldn't put every last dollar in an envelope

Rodriguez described cash stuffing as easy to learn and adapt, but she said that getting started had its challenges.

"Seeing your debt can be really overwhelming," she said. "You just have to remember why you are doing this, why you are starting this journey and what is your overall goal. When I have hard times with money, I remember that my end goal is a house for my little family."

While persistent inflation is a good reason for Americans to get their budgets in order, Rodriguez said it's also the reason she doesn't put every dollar to her name in a physical envelope.

Cash stuffed in an envelope generates a return of 0% — so when prices rise, this cash gets less valuable. Rodriguez said that for her medium- to long-term savings goals she puts money in certificates of deposit or retirement accounts; she said that when she does this, she use the fake placeholder bills for her envelopes.

But for short-term expenses like groceries, Rodriguez said, the benefits of cash stuffing outweigh what she sees as the cost: a relatively small return in a savings account.

"At the end of the day, cash stuffing is a tool to get you to your goals," she said. "There will be trial and error as you learn what works for you, but once you get there and see the results, that is going to be the motivation to keep going."

Have you tried cash stuffing and are willing to share your story? If so, reach out to this reporter at jzinkula@insider.com.