How do you set up the budget for cash payments, like for maids or tips or babysitters?
I typically don't carry cash as it is harder to track, but some people like to be paid in cash. What is the best way to account for the cash withdrawals from the checking account and then the cash payment for services?
Jennifer Cathey Add a cash account to YNAB. Then, when you enter a transaction and select the account from which the spending is coming - checking or savings, a credit card, or cash - choose cash. Paying in cash should be treated like paying with any other method, meaning you should enter in the transaction right away so that you don't forget. This is even more important with cash because there's no way to link your wallet with your YNAB like you do with a credit card. Depending on the transaction, I typically round up to the nearest quarter or dollar so that I'm not trying to figure out why my wallet is missing a few cents from what my budget says.Reply
Serious question here: why do you need a cash account? I have people I pay in cash, they have a category, e.g. "Extra Lawn Work" and when I make the withdrawal from the bank, the payee "Cash Withdrawal" and the category is "Extra Lawn Work." This seems to work well. It would seem the Cash Account would complicate things.Reply
but when you are all alone in your hotel room at night with crap internet, you have time to do some algebra.
LOL. I'm sure this is true when you're traveling through foreign places and need to calculate exchange rates, but as someone who was flooded out of her apartment and spent most of the summer "alone in a hotel room at night with crap internet" I have to say, not once did I consider algebra as a solution!
I also have a cash account, creatively titled "My Wallet". For simplicity's sake, I round up every transaction to the nearest dollar and dump the change in the bottom of my purse. When I start risking a hernia by lifting my purse, I take it to the bank and have them count it and do a little cash inflowReply
This is an annoying problem in my office. Most of the younger crowd have gone completely cash-less, or to be more accurate they think they can and have tried to -- and they certainly wax on enthusiastically about how they don't need to carry cash -- but I would argue that the niceties of society still require a person to pitch in with some money on occasions and random fundraisers. People still sell chocolates and cookies and raffle tickets to raise funds for their kids activities. We have numerous other fundraising and charitable events that require cash to participate.
Even if one is unwilling to donate to the fundraising endeavours of colleagues, there are still times when there is a social obligation or an expectation that everyone will participate. We send around a collection envelope to gather funds for various observances: sending flowers or making a donation at the passing of a colleague, assembling a gratuity for our custodian staff at Christmas, buying a gift for a co-worker's retirement. Most of our modern cashless crew have to "<nervous giggle> go hit a bank machine" in order to donate $5. They try to avoid going to the bank machine by dumping the change out of the bottom of their bags. As one who tallies up the contributions to the envelope at the end and has to deal with the nickels, dimes, and linty buttons, I am frequently appalled by the resulting stinginess.
Sorry....didn't mean to rant.....this triggered me this morning.Reply
Even though I do the great majority of my transactions with a credit card, I usually take out about $100 in cash each month, and seem to go through it. Not only do I like to tip in cash - for example: my barber, bartenders, and cafes where the bill tends to be small - but there are a surprising number of establishments in New York City that continue to be cash-only. Also, many bodegas/corner stores will allow credit card purchases only if you charge $10 or more. Before YNAB, I used to "get around" this by just buying more... and not always things I needed! But now I always keep cash on hand. When I get down to just $20 in my wallet, I hit the ATM.
Contrast this to, for example, travel in Iceland, where one can buy a pack of gum for the equivalent of $1... with a credit card! It is surprising how pervasive cash-free society has gotten there, for better or for worse. Mostly for better, but I hear HappyDance example, and I agree that cashless transactions have made people a bit less generous. My group of friends is pretty good with splitting bills evenly, or saying "you get the tip," or saying "I treat this time, you treat next," but I have seen some really stingy behavior with the rise of Venmo/instant cash transfer apps. True life examples:
-Friend's roommate deducted $0.75 from her share of the rent because my friend ate one of roommate's bananas.
-Acquaintance sent a Venmo request for an Uber ride, my friend paid right away, but the next day the friend sent another request for $1 because she had given a $2 tip after the ride ended and wanted my friend to pay her back for "her portion" of the tip.
-Witnessing a couple (not sure if friends, dating, or what) getting out their phone calculators to add up what they ordered to the penny: "you ordered this, I ordered that, now I'll send you $13.91?"
I understand that I am relatively fortunate to not have to worry about pennies and small dollar amounts in these situations, but I do think that the ease of splitting costs instantaneously has caused a decline in social generosity.Reply
This has been educational for me and something I need to think about - if it would work for me. If I take cash out it usually is for a specific category as I've noted above. If I take cash out for myself; I track the transaction in YNAB against my checking and I have a Cash category in my budget. But I don't have a cash account. Once I log to the cash category, any further transactions are out of the budget. Thank you, everyone, for the use cases. I can see if you are dealing a lot with cash that the cash account helps you keep track.Reply
It's the responsibility of the organizer of something like this to embrace (very simple) technology to get things done
Nope. Disagree. Cash is a whole lot simpler for me than the technology I would have to embrace in order to play banker for those who don't want to carry it.
What would be really great actually, is if one of those cashless wunderkinds who uses such simple technology would occasionally volunteer to co-ordinate some of these social requirements of messy human interaction and see how simple it is. That ain't happening either.Reply