You’ve probably heard the phrase, “It’s not how much you make; it’s how much you spend.” There is truth in that witty saying, but the problem is figuring out how to spend less each day. Keep reading to learn about smart ways you can save money every day of the month.

Don’t Purchase Anything

Pick out at least one day a week that you don’t purchase anything at all. No spending is allowed on your designated spend-free days. That includes everything and anything.

Reinvent Last Night’s Dinner

Leftovers from last night’s dinner provide an easy way to create a new meal for little to no extra cost. For example, last night’s leftover pot roast and veggies become tonight’s stew, vegetable beef soup, or maybe pot roast tacos.

Brown Bag Your Lunch

Pack a healthy lunch from home to take to work a few days a week and watch your savings add up. A nutritious lunch also contributes to a healthier lifestyle for yourself.

Choose Free Entertainment

You don’t need to spend a ton of money to have some fun. Enjoy your public parks, beaches, lakes, and nature trails, and take advantage of free admittance days to local zoos and museums.

Make Your Favorite Coffee

Add up the cost of your daily coffee purchases for a month, and you’ll likely be surprised at the total sum. You can easily save money by brewing your favorite coffee at home to take with you.

Avoid Pricey Restaurants

Eating out at pricey restaurants can quickly put a huge dent in your budget. Exchange expensive restaurant dining for budget-friendly dining at alfresco cafes, charming diners, or quaint eateries.

Round-Up Your Purchases

Special round-up apps help you save money by rounding up your purchase to the next dollar. For example, if you buy a snack for $2.50, the app rounds the purchase up to $3.00, with the extra 50 cents transferred from your checking account to savings.

Slash Your Utility Costs

Slash your utility bill by switching off lights, televisions, and computers when they’re not in use. Also, adjust your home’s heating and air conditioning thermostat when you’re sleeping or away from home to save additional dollars.

Avoid Multiple Shopping Trips

Multiple shopping trips during the week at online or brick-and-mortar stores typically result in increased spending. Make a list of what you need and limit your shopping excursions.

Look for Seasonal Bargains

By planning ahead, you can save money on seasonal bargains. For example, buying shoes, clothing, bedding, furniture, and other items when they’re at end-of-season clearance price scan save you big bucks.

Enjoy Simple Pleasures

Sometimes life’s simple pleasures can give you the most enjoyment for little to no expense. Savor a cup of coffee on your patio, relax in a warm bubble bath, or take your dog on a walkaround your neighborhood.

Take Care of Yourself

When you take good care of yourself, you might save yourself some serious money. For example, exercise regularly, eat nutritious food, get a good night’s sleep, stress less, and maintain a positive attitude. Better mental and physical health can contribute to fewer costly doctor visits and pricey medications.

Learn to Say No

It would help if you learned to say no to expensive sporting events, dinners, trips, and entertainment that you can’t afford. By saying no to these items, you can build your savings account instead of busting your budget.

Resist Impulse Buying

Save yourself some cash and next-day regrets by resisting impulse buying, especially on high-ticket items. Distance yourself from the thing you want to purchase and think about it for at least a couple of days.

Create a Vision Board

If you can visually remind yourself of why you want to save money, you’ll likely be more inspired to save. You can do this by creating a vision board. Buy a bulletin board and pin pictures of what you’re saving for, such as a beach vacation, emergency fund, retirement, or anew car.

Challenge yourself to save more money beginning today. Incorporate all of the money-saving tips above to help you save more and spend less. As you see your savings grow and have the cash to purchase items on your vision board, you can enjoy the rewards of your deliberate frugality.

Looking for a low-risk investment with a high rate of return? A Certificate Account is a great savings tool that can give you the ability to grow your savings with peace of mind.

Certificate Accounts are a type of savings account similar to a certificate of deposit (CD), but it is issued by a credit union, instead of a bank. These certificates are designed to pay a set interest rate on your initial deposit for a fixed amount of time to help your funds grow faster.

With terms as short as 6 months that go up to 7 years, and deposit amounts as low as $1,000 you have a wide range of low-risk investment options. However, you can’t make further deposits into the account once your certificate has been opened.

Unlike other investment options, you don’t have to worry about fluctuating interest rates with a certificate because your rate is locked in for the length of the term.

Additionally, your funds are safe and sound since Certificate Accounts are federally insured up to $250,000 by the National Credit Union Administration (NCUA).

It’s important to know that you will have to pay a penalty if the money in your certificate is withdrawn before the end of its maturity date. Having a rainy day fund set aside will help you avoid needing to access the cash in your certificate if an emergency comes up.

Pro Tip:

When your certificate matures, reinvest your money and open a new Certificate Account with a longer-term and higher rate. This will create a revolving door of savings that will deepen your pockets.

If you’re holding onto savings for a major event, a nest egg, or a future vacation, you may want to store your money somewhere safe and secure, knowing that you will have your money back plus the interest earned during the term.

Reach your goals faster and easier with a high rate Certificate Account from AFFCU.

The instances of online fraud only seem to grow every year. However, that doesn’t mean you need to swear off the Internet forever. Surfing the web can be safe and worry-free as long as careful steps are taken. Knowing how to spot a scam is crucial.

To keep your identity and money secure, here’s a quick guide to identifying—and avoiding—online fraud.

Never click suspicious links

Most of us are familiar with online phishing, but the fact that it’s still scarily persistent (check your junk mailbox) suggests we could all use a refresher.

Phishing works in different ways, but in the most common scenario, a scammer posts an appealing link as bait and then re-directs you to another website. Best case? You’ll be taken to a shady website. But in the worst-case situations, clicking the link infects your computer with a virus that steals your personal info or locks your computer until you agree to pay the scammer a ransom fee.

The simple solution? Think before you click.

Beware spam-y comments on social media

Scammers are smart. They know we’re viewing trending posts on social media. And the more popular the post, the more likely we’ll be to read and leave comments. The spammer will drop a dubious link into the conversation in the comments, claiming it connects to a relevant story or thread. Use your intuition, and be wary of any user or link that doesn’t quite look right.

If you responded “yes” to any of the preceding questions, tapping out the equity in your home to pay off consumer debt may be a short-term solution that can put your home in jeopardy of foreclosure.

Pro tip:

As a general rule, you should change your passwords regularly, especially those of your financial accounts. Passwords are highly valued on the black market (i.e., Scammer Land).

Online Shopping for products you never receive

You may see these on social media or even in your email. The link will always direct you to a third-party eCommerce store. Before going to the site, do some research. They usually offer you high-end products at a really low price. Research the product to see if you could purchase it somewhere else. They typically require you to send them payment via electronic transfer—this could be a red flag. If you only lose your money for the cost of the product, count yourself lucky. Unfortunately, in most cases you have now shared your credit card information, which opens the door for them to use your information for future purchases.

Most online companies are not scammers. If you have not purchased from a company before, do your due diligence and research customer reviews, check for their contact information, and research the product to see if it is legit. Check to ensure the site starts with “HTTP” or “HTTPS.”

Pro tip:

Only use sites that use secure payment platforms when shopping online.

Think twice before taking that survey

Online surveys can be very tempting. Usually, they’re promoted in banners or social media posts and promise deep discounts and giveaways; all you have to do is hand over your info.

The problem is that a lot of these surveys are bogus. A legit company probably isn’t going to give you a real deal via a flashing banner ad. And if you click, you may be giving up access to things like your bank and credit card info.

Dating profiles too good to be true

Unfortunately, scammers have started to invade online dating websites. They may be hard to spot at first, preferring to woo you over a period of time. So how do you identify them? Watch out for anyone who wants to move your conversation from the dating site to email, can never meet in person, or the big one—wants your money.

Looking for more resources to protect you against scammers. Visit our Fraud Prevention page to see the latest information updates.

Emotional spending is an effort to relieve stress by spending money on something you don’t need—and it’s common. According to a survey by NerdWallet.com, almost half of all Americans spend more than they can afford for emotional reasons. Whether you’re trying to console yourself after a breakup or just trying to avoid thinking about why your boss is giving you the silent treatment, shopping may seem like the best way to make yourself feel better, but the benefits are short-lived.

The problem is that emotional spending can make you feel worse than before. When you get your credit card bill, or when the excitement of your new purchase wears off, the bad feelings often come back with a vengeance. Making matters worse, this kind of self-medicating can quickly get out of hand and lead to unmanageable credit card debt.

If you feel guilty about past purchases, you are probably more likely to overspend in the future. Guilt, shame, and other negative emotions can lead people to make unwise or irresponsible purchases to cope with their feelings. People who feel guilty about spending money on themselves tend to spend more than those who don’t feel as bad about it.

There are better ways to deal with these emotions than spending your hard-earned cash on things you don’t need. For example, you’re feeling down because someone said something rude at work today and now want comfort food to make you feel better. Rather than giving in to that urge and buying an expensive meal, take a walk outside. Exercise releases endorphins that will calm your feelings of stress or sadness by lifting moods. Work on a hobby or do something else you enjoy that doesn’t involve spending money.

Pause and take a deep breath.

Stop, relax, and take long deep breaths before making a purchase. Pausing will allow you to reevaluate and let the emotions that encourage you to buy calm down. Going on a shopping spree for things you don’t need may not seem appealing once you pause and reconsider.

Try the 24-hour rule. If you’re tempted to buy something, put it on hold for a day or so. You often realize you don’t need the item and can move on with your life without feeling like you’ve missed out.

Face your problems directly.

It is important to remember why you spend money and your motivations. If you are spending money to avoid thinking about something else or to cope with emotions, it is better to face the problem directly. There are usually cheaper ways to deal with negative emotions. For example, if you feel alone and depressed, contact friends or family instead of buying things.

Avoid your triggers

Many emotional shoppers have triggers that cause them to spend. For example, you might overspend when you hang out with other friends who are emotional shoppers. Reducing the time you spend with those friends or suggesting other activities that don’t involve shopping may help reduce the money you spend.

If online shopping triggers you, you can do a few things to help curb your spending. First, delete your payment information from all the websites you use. This way, every time you want to buy something, you’ll have to go through the extra step of entering your credit card information and shipping address. Another option is to get an app on your phone or computer that blocks your access to certain websites for a set period.

Stay away from the mall if you don’t need to be there or turn off the TV if you’re flipping through channels and see an infomercial for something enticing. The more you are exposed to things that could tempt you to spend, the higher your chances of succumbing to those temptations.

Ask questions before making a purchase. Are you buying something because it’s on sale? Do you feel you deserve a reward for working hard at work or school? Do you think shopping will improve things because nothing else does? These are essential questions to ask about any purchase, as they’ll give insight into why you’re spending money and encourage healthier dialogue with yourself. In addition, being aware of your triggers, habits, and limits will help keep your wallet safe from unnecessary purchases.

The good news is you can regain control of emotional spending. By understanding your triggers and what you want from life, buying things will start to feel less important. It can be hard to break habits, but it is possible with patience and learning from each experience as they happen.

Struggling with debt due to emotional spending? BALANCE is a free financial education program that offers helpful resources to break the debt cycle and use your money for what’s most important to you.

It’s time for back-to-school shopping! With inflation continuing to rise, you may be worried about crossing everything off your child’s school supplies list without going over budget, but relief is coming soon with this year’s sales tax holiday.

Texas’ tax-free weekend begins Friday, August 5th, and ends on Sunday, August 7th. Taking advantage of the deals and sales tax exemption can help stretch your money. Before you start adding items to your cart, you’ll want to know what items qualify for tax-free status.

What items are tax-free?

Shoppers will have taxes waived on clothing, footwear, school supplies, and backpacks sold individually under $100.

Which items are NOT tax-free?

Unfortunately, not everything is tax-free. Items such as jewelry, purses, computers, software, textbooks, and athletic or computer bags do not qualify for tax-free savings.

Where can I shop?

Shoppers can buy items in stores or online. Doing your back-to-school shopping online can save you time but there are some things you’ll want to keep in mind in order to have the taxes waived.

Purchases made online Sunday, August 7th at 11 p.m. may be charged as taxable purchases if a merchant accepts the payment on August 8. We recommend completing your online shopping earlier to avoid missing the tax-free holiday window.

Shipping costs are part of the item’s total sale price so if you’re shopping online, make sure to keep this total under $100 to avoid sales tax.

Does a Tax-Free Weekend Save You Money?

You can expect to save about $8 for every $100 spent during tax-free weekends. While this may not seem like much, your savings could add up depending on how much supplies you’re expecting to buy.

Remember, just because it’s a tax-free weekend doesn’t mean you’ll automatically save money. Try searching for coupons and other sales to maximize your savings. For more information on qualifying items, refunds and more, visit the Texas Comptroller’s website.

No matter when you shop, the back-to-school season comes with a large price tag. Using your AFFCU Visa Debit or Credit Card at checkout could help you save money every time you swipe.

7 Ways to Fight Inflation

Of all the economic problems that arise, inflation is among the most destructive. When prices rise, every dollar earned is worth less, making it even more challenging to make ends meet.

Saving for the future can take a back seat during inflation and even after prices stabilize, putting families behind in their savings goals. To preserve wealth and buying power, a strategy is needed for survival, and here are valuable tips to use starting today:

Put an end to those nuisance fees once and for all

With every dollar worth less, no one can afford to waste them. So now is the time to get rid of those monthly bank service fees, ATM charges, and other costs that may be lingering.

 

Banish food waste

The only thing worse than spending more at the grocery store is watching those dollars disappear into the trash or down the garbage disposal. With inflation on the rise, it has never been more essential to banish food waste. Embrace those leftovers, freeze the excess, or share the bounty with those in need.

 

Stock up on shelf-stable staples

Even with prices on the rise, there are bargains to be had. When deals pop up, it is time to stock up. Filling the pantry with pasta boxes, jarred sauce, and canned vegetables will be good for future finances, so clear some space and start shopping.

 

Experiment with meatless meals

With the price of meat rising faster than other grocery store staples, now could be the time to embrace an inner vegetarian. Maybe a meatless Monday is a way to experiment. Of course, giving up meat entirely isn’t necessary, but eating meatless one or two days a week could make a big difference in the size of monthly grocery bills.

 

Put off major purchases

If you are contemplating a major purchase, ask if it is something you can live without. If so, putting it off until the worst of the inflation spike is over might result in considerable savings.

 

Seek out inflation friendly investments

If extra cash is available to save and invest, looking for products that benefit from inflation is smart. From government savings bonds that track the rate of inflation to stocks of companies with rising earnings, these smart money investments could be suitable for the short term and the long term. Consult a financial advisor for the best options.

 

Optimize your fuel economy

The price of gas has been especially problematic of late, and inflation at the pump is surely one of the most painful aspects of rising prices. Looking for ways to maximize fuel economy can have an outsized influence in this environment. Think about the way you drive as well as how many miles are traveled. Are there other, less expensive transportation options available?

 

Inflation is nothing new, and rising prices have arisen in decades past. When prices are rising, it is easy to despair, but it is important to realize that spending power can be retained. Solving the Federal Reserve dilemma or controlling the larger economy might not be an option, but the ability to make strategic changes to how you shop, drive, cook, and live your daily life still exists. The seven inflation-fighting tips listed above may help make the most of those shrinking dollars.

Don’t let inflation erode your savings. Your funds can earn more in a Money Market Account or Certificate Account from AFFCU. The money you place in these accounts earn a significantly higher interest rate than what is offered through a traditional Savings Account. So, your savings can keep up with rising inflation.

Using the equity in your home to pay off unsecured debt and/or make home improvements can be a hard financial decision. Low annual percentage rates, tax-deductible interest, and streamlining your monthly payment makes second mortgages extremely attractive. Meanwhile, using your home for collateral is a decision that should be weighed carefully.

Home Equity Loan or Home Equity Line of Credit (HELOC)

Second mortgages come in two basic forms: home equity loans and home equity lines of credit, or HELOC. They typically offer higher interest rates than primary mortgages because the lender assumes greater risk – in the event of foreclosure, the primary mortgage will be repaid before any seconds.

However, because the loan is still collateralized, interest rates for second mortgages are usually much lower than typical unsecured debt, like charge cards, credit cards, and consolidation loans.

The other major advantage of second mortgages is that at least some of the interest is, for borrowers who itemize, tax deductible. To receive the full tax benefit, the total debt on your home, including the home equity loan, cannot exceed the market value of the home. Check with your tax advisor for details and eligibility.

Is a second mortgage a good idea?

Before you decide which type of second mortgage is best for you, first determine if you really need one. If you have ongoing spending issues, using the equity in your home may not help and may, in fact, be detrimental. Ask yourself the following:

• Do you frequently use credit cards to pay for household bills?
• If you subtract your expenses from your income, is there a deficit?
• If you were to pay off your creditors by using the equity in your home, would there be a strong possibility of incurring more unsecured debt?

If you responded “yes” to any of the preceding questions, tapping out the equity in your home to pay off consumer debt may be a short-term solution that can put your home in jeopardy of foreclosure.

If you use the equity in your home to pay off your unsecured debts, then run up your credit cards again, you could find yourself in a very difficult situation: no home equity, high debt, and an inability to make payments on both your secured and unsecured financial commitments. Spending more than you make is never a good reason to use the equity in your home.

How do I get started?

If you have determined that using home equity is sensible, your next step is to understand the process of obtaining a second mortgage, and choose between a home equity loan and a home equity line of credit.

Factors to consider

One factor to consider when shopping for a second mortgage is closing costs, which can include loan points and application, origination, title search, appraisal, credit check, notary and legal fees.

Another decision is whether you want a fixed or variable interest rate. If you choose a variable rate loan, find out how much the interest rate can change over the life of the loan and if there is a cap that will prevent the rate from exceeding a certain amount.

APR

Shopping around for the lowest APR (Annual Percentage Rate) is integral to getting the most out of your loan. The APR for home equity loans and home equity lines are calculated differently, and side by side comparisons can be complicated. For traditional home equity loans, the APR includes points and other finance charges, while the APR for a home equity line is based solely on the periodic interest rate.

Other factors

Before you make any decision, contact as many lenders as possible and compare the APR, closing costs, loan terms, and monthly payments. Also inquire about balloon payments, prepayment penalties, punitive interest rates in the event of default, and inclusion of credit insurance.

When shopping for loans, do not rely on lenders and brokers who solicit you – ask fellow workers, neighbors, and family members for dependable leads, and research the Internet for immediately accessible quotes.

Home Equity Loans

With a home equity loan, you will receive the cash in a lump sum when you close the loan. The repayment term is usually a fixed period, typically from five to 20 years. Usually the payment schedule calls for equal payments that will pay off the entire loan within that time.

Most lenders allow you to borrow up to the amount of equity you have in your home – the estimated value of the house minus the amount you still owe. You are not required to borrow the full amount, but can instead borrow only what you need.

Interest rates are usually fixed rather than variable. You might consider a home equity loan rather than a home equity line of credit if you need a set amount for a specific purpose, such as an addition to your home, or to pay off your entire unsecured debt.

Home Equity Lines of Credit

A home equity line is a form of revolving credit. A specific amount of credit is set by taking a percentage of the appraised value of the home and subtracting the balance owed on the existing mortgage. Income, debts, other financial obligations, and credit history are also factors in determining the credit line. Once approved, you will be able to borrow up to that limit, in restricted increments. Some lenders will charge membership or maintenance and transaction fees every time you draw on the line.

Interest is usually variable rather than fixed. However, the repayment term is usually fixed and when the term ends, you may be faced with a balloon payment – the unpaid portion of your loan.

The advantage of a home equity line of credit is that you can take out relatively small sums periodically, and interest will only be charged when you deduct the money. The disadvantage is the temptation to charge indiscriminately.

Watch out for too-good-to-be-true offers

You may be tempted by offers that allow you to borrow up to 120% of your home’s equity. Be aware that any interest above the home’s equity limit is not tax deductible. Additionally, you won’t be able to sell your home until the lien is satisfied, which can negatively impact the marketability of your home.

Finally, if you suddenly change your mind, federal law gives you three days after signing a home equity loan contract to cancel the deal for any reason.

If you’d like to learn more about using the equity in your home to pay for an expense like repairs or even a remodel, visit our Home Equity Loan web page to learn more about our rates, features, and apply.

Things to consider when buying a boat

The long days of summer are here and that means more time to spend outdoors. If you’re thinking of buying your first boat – congratulations! It’s a big step toward helping you and your loved ones have fun away from the TV.

But there’s more to buying your “toy” than meets the eye. Here are a few tips to help you buy with confidence and avoid buyer’s remorse.

Browse Boat Options

Boats come in all different shapes and sizes. That’s why it is important to know what make and model matches the type of activities you’ll be doing and the types of waterways you’ll be frequenting. 

 

Set a Budget

Once you know the type of watercraft you’re interested in, you’ll need to find the boat that fits your budget. Determine how much money you’ll be putting as a down payment for the purchase. It’s also a good idea to get pre-approved for your boat loan before you start shopping, so you’ll know the dollar amount you’re approved for to make it easier to stay within your budget.

 

Prepare for Additional Costs

Any boat owner will likely warn you about the expenses related to owning and maintaining your watercraft. You’ll need to prepare your wallet for the extra items you’ll be spending your money on like hauling, storage, gas, maintenance, and registration fees.

 

Think About Insurance

While boat insurance isn’t required in all states, it may be an investment you want to pay for since it could cover damage caused by an accident on or off the water. Insurance for a boat is different from the coverage you have for your car and home. Take some time to do your research and compare your options from multiple providers. 

 

Remember, Safety First

We know you’re looking forward to having fun on the open water, but it’s important to prepare for emergencies. Make sure you have life jackets, and flotation devices for you and your occupants. Be aware of the weight limits of your boat so you don’t overload it. Keep an eye out for low water areas and submerged objects that could damage your boat. Check the weather before heading out.

 

Financing Your Boat

For Boats, Jet Skis, and other Watercraft, AFFCU can finance your next outdoor adventure!

Your financial health is just as important as your physical health. That’s why it is important to start practicing healthy financial habits now. Remember, it’s never too early or too late to start a good thing.

Consider adopting these three simple financial habits today for a brighter financial future tomorrow.

Evaluate Your Expenses

Budgeting is a key cornerstone to mastering your finances, but it can seem intimidating and time-consuming if you’ve never done it before.

To get started with a basic budget, you should list your monthly income. Then you’ll want to write all of your one-off and recurring monthly expenses. Lastly, you will compare the difference between your “bringing home” and what you’re spending. This part can be a huge eye-opener to people because it will show your estimated monthly savings or if you have overextended your means.

Like most things in our world, technology has also streamlined the budgeting process. There are a plethora of free budgeting apps and tools available on your favorite mobile device that can track and organize your spending habits, so all you have to do is review it and update your spending habits accordingly. Your financial institution may even have a budgeting tool within their digital banking platform.

Something that most people don’t realize is that a budget isn’t meant to limit your money and dampen your fun. Your budget is there to help you find more efficient ways to maximize the money you work hard for.

Set Up Financial Boundaries

Spending beyond your budget can put you in a bad spot financially. Some ways to curb overspending is to ask yourself “Do I need this? Can I do without this?” to see if these purchases are justifiable for your particular situation.Many financial experts also suggest following the “50-20-30 rule” as a guide on how you should use your monthly income.

• 50% of your monthly income should go towards necessities, including utilities, food, and rent or mortgage.
• 20% should be put to your savings and paying your debt, such as paying off loans or student debt.
• 30% of your money goes to personal purchases, such as your phone plan, internet/cable/streaming services, clothing, and personal care.

This financial recommendation provides you with a clear guide on how your income should be divided up to help make it easier to stick to this practice. 

Make yourself a priority

Paying yourself first by saving or setting money aside. This small action can help you be financially prepared for anything, good or bad, that comes your way. Some of the most common areas people save for are; retirement, emergencies, major life changes, and big purchases.

There are options available to you that can simplify and speed up this process. This way you won’t even see the money, so it keeps you from spending it and moves you closer to your savings goal faster.

Your employer may even offer direct deposit options that allow you to divide up portions of your paycheck that will get automatically put into different types of accounts each pay period. You can also schedule automatic transfers from your financial institution’s digital banking to a secondary savings account or even have your expenses rounded up to have the extra change put into another savings account.

Remember to regularly check-in and adjust your budget and savings goals to make sure these items fit your financial situation at that time in your life.

We know practicing healthy financial habits is easier said than done, but with a bit of time and self-discipline, it will become second nature to you. AFFCU offers Savings Accounts and Certificate Accounts to help keep you on your path to financial success. 

Need some more help getting started with budgeting and getting control of your finances? AFFCU has partnered with industry-leading BALANCE to provide you with free access to expertly-crafted financial education and resources to help with your fiscal matters. Learn more about BALANCE.

Should You Try the Money Envelope Budgeting System?

Creating and maintaining a budget is one of the best ways to stay on track with your finances. Budgeting allows you to save up for large purchases such as a down payment on a car or home, build an emergency savings fund or even pay off high-interest debt. 

But with inflation on the rise, it may be time to take a second look at your budget and make some adjustments. Cash Stuffing has gone viral on popular social media sites as people look for new ways to adjust their spending to accommodate increasing prices at the gas pump and store shelves. 

If your previous budget is no longer realistic or could use some adjusting, you may want to consider this retro method. We’ve put together some things to consider to help you decide if this tool is right for you and your money.

Cash stuffing has actually been around for years and is a rebranding of the money envelope system.

Cash stuffing, or money envelope budgeting, is when you withdraw cash on payday and divide it into dedicated envelopes, for different expenses and savings categories, like gas, groceries, utility bills, dining out, vacation, holiday shopping, etc. The money you store away in each envelope is the maximum you can spend. Some people use a small accordion file folder rather than envelopes, so their cash is all in one place and stored in something sturdier than a paper envelope,  but the choice is up to.

If there is any money leftover in an envelope by the time your next pay period comes around, you can leave the extra funds in that envelope for an extra boost or roll the money into another envelope that may be low.

Now that you have a better understanding of what this budgeting tool is, it’s important to highlight some of the pros and cons of Cash Stuffing.

Pros

• Your budget becomes more tangible
• You’re not charged overdraft fees if you overspend
• You’ll avoid credit card debt
• You’re less likely to make impulse purchases
• You’ll build better spending habits

Cons

• Your cash can be lost or stolen
• You won’t build credit when paying with cash
• Your purchases won’t earn rewards or cash back perks
• You may have a harder time reviewing your transaction history
• Your money won’t earn interest

Following the envelope budgeting method takes discipline, but it can be well worth it for certain people. It’s important to do what’s best for you, so if you prefer a digital approach there are plenty of helpful tools to help divvy up your money.  

Having multiple savings accounts is an updated version of the Cash Stuffing and Envelope System method that makes it easier to manage your money.

AFFCU members can open multiple Secondary Savings Accounts, each new savings account will be its own “envelope.” You’ll be able to name each Secondary Savings Account after the monthly expenses or goals you’re saving for like you would when stuffing an envelope.

Using Multiple Secondary Savings Accounts is as simple to understand and far more secure than paper envelopes filled with cash. You can easily set up automatic transfers to each savings account, earn dividends and move money between each account as needed. Best of all, all of the accounts can be managed within Online and Mobile Banking.

Need some more help getting started with budgeting and getting control of your finances? AFFCU has partnered with industry-leading BALANCE to provide you with free access to expertly-crafted financial education and resources to help with your fiscal matters. Learn more about BALANCE.