The envelope method or "cash stuffing" method has become very popular on TikTok as more and more people are searching for ways to get out of debt.
The budgeting method is all over the social media platform, but stashing cash at home comes with many downsides that are important to be aware of.
If you're currently using the method, you could be missing out on the interest that comes with a high-yield savings account.
The method could also make you much more susceptible to theft!
The "back-to-basics" approach of cash-stuffing promotes discipline by partitioning spending money into labeled envelopes for categories like "groceries," "gas," and "bills."
The approach is practical and rewarding, but according to experts, it's not ideal. Rates on top-yielding online savings accounts are exceeding 5% right now!
Bankrate.com’s chief financial analyst said, “Moving your money to a high-yield savings account is the easiest money you are ever going to make."
For instance, after one year, you would earn $250 if you have $5,000 in a high-yield savings account.
At the end of the day, everyone's financial situation is different, but it's important to keep in mind that not all "expert" advice on TikTok is actually accurate.