How to fix TikTik ‘100 envelope’ challenge

Photo by Solen Feyissa on UnSplash

The TikTok ‘100 Envelope’ budgeting method has become a popular approach to personal finance management, gaining traction on social media platforms like TikTok. While it’s a creative way to save money, there are some significant flaws that users should be aware of. 

Senior Deals Strategist Jason Higgs at Bountii explains the issues with this method and offers advice on how to improve it.

What is the 100 Envelope Method?

The ‘100 Envelope’ method involves labelling 100 envelopes with numbers from 1 to 100. Each day, you randomly select an envelope and put in the amount of money corresponding to the number on the envelope. The idea is that you keep all the envelopes closed until the 100 days are over, and then you can unveil your £5,050.

The Flaws in the System 

While this method sounds promising, it has several drawbacks. First, it can be unrealistic for people with tight budgets to put aside varying amounts of money daily. Jason points out, “This approach doesn’t account for fluctuating income or unexpected expenses, making it impractical for many.” 

Additionally, users of the method would need to have the exact amount of cash for the envelopes. This might be fine for days ending in zeros, but you might need to be making frequent trips to the ATM and trying to find cash. 

Finally, it might not be a safe idea to have that much cash lying in your home. “Yes, you’ll have thousands of pounds by the time you’re done, but then you’ll need to carry all that cash back to the bank to deposit. You also risk potentially losing a few envelopes along the way if you’re not careful”. 

How to Fix the 100 Envelope Method

To address its shortcomings, consider modifying the method. One way is to reduce the number of envelopes or adjust the amounts to better fit your financial situation. Another strategy is to set a fixed amount to save daily, regardless of the envelope drawn. “Creating a more predictable saving plan can reduce stress and make it easier to manage your finances,” advises Jason. 

Additionally, you can move money around digitally instead of using physical cash. That way your money is always safe, there’s no pressure to get exact cash, and you’ll see how moving money into your savings affects your checking account. 

“Save even bigger by moving money into a high-yield savings account, so that you start building interest on the cash flow,” adds Jason. 

Alternative Budgeting Strategies

If the ‘100 Envelope’ method isn’t for you, there are other budgeting strategies that might better suit your needs. The 50/30/20 rule allocates 50% of your income to necessities, 30% to discretionary expenses, and 20% to savings. 

If you’re attached to saving with cash and envelopes, there is another popular method.  Envelope budgeting is where you allocate fixed amounts of cash for different spending categories, such as groceries, clothing, fun money, etc. “This method works well for people who like the idea of physically seeing their money, but it’s a budgeting plan instead of a savings one,” notes Jason. 


Chris Price