Cash withdrawal

We have the majority of our accounts in YNAB, but as Dave Ramsey students, we put Cash in envelopes for Household, Dining Out, Groceries and a few other categories.  I give the allotted amount to my wife every month and she puts it into envelopes in her purse.  My wife would like to continue to do this, as she finds that it keeps our grocery spending in check.  I'd like to be able to mark this as withdrawn without accounting for every dollar spent.  Is that possible?

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  • Hey Magenta Ink!  My wife and I are Dave Ramsey students as well and do the same thing you are talking about.  What we do is the following:

        -Budget what we want to spend to our "Cash Accounts" (which has Groceries, Entertainment, etc. under a heading).

         -Then, I go get cash out of the bank.  So, if I'm getting say $300 total out (i.e. $150 for groceries, $100 for entertainment and $50 each for miscellaneous and gifts) I record the transaction in YNAB as "Cash Withdrawl" and then split the transaction among each budget line appropriately.  

        -I then take that money and put it in our envelopes and spend out of those.  When it is gone, its gone.  

    This way, I am recording the budgeted funds in YNAB but not worrying about having to keep tabs of every time we spend out of those envelopes. 

    Hope that helps!

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  • Yes. It sure can be done.

    Just record the cash withdrawal as spent (like you would when entering an e-bill payment) on whichever category, i.e. $150 spent on groceries. If you spend at multiple vendors, you might use a generic 'groceries' as the vendor name. Another name might be 'envelope cash', which can be used for all your envelopes, while categorizing each amount to groceries, entertainment, etc. would identify what it was spent on. If you are withdrawing multiple categories in one bank transaction, you can record it as a split transaction with each amount being spent on the various categories.

    I am a cash spender, and I prefer entering every little transaction to the penny, so I use a cash account named wallet.  I stopped using separate physical envelopes and began relying on the YNAB categories to guide my spending about two years ago. I agree that having a finite amount of cash restricts spending, especially in the beginning. I guess that after years of doing it, it has become second nature to me. I rarely exceed my budget regardless of my payment method.

    I can see where the entire category is considered spent when you put it in the envelope is less work at first glance, but I really like being able to see on my YNAB screen exactly how much I have left to spend in my entertainment category this month, how much I have spent so far on groceries, how much I spent at a specific vendor (Gee, I seem to be spending quite a bit at XYZ Shop). You lose this level of detail if you do a blanket entry to cover all the spending and assign it to a generic vendor.

    Out of curiosity, do you also record an inflow for any cash not spent at the end of the week or month.  Or do you get to just blow any savings without recording what that is spent on?

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    • HappyDance - If there is money at the end of the period, my wife saves it for family gatherings & holidays when we have more grocery needs.  

      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 2 yrs ago
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      Magenta Ink (b04bb2cef5c4) 

      Good plan. Sounds like your wife and I think the same way but chose different paths to get to our destination.  All roads lead to Rome.

      I budget some funds to two categories monthly that are intended to bolster food spending at various times of the year -- Christmas and Gifts/Events -- and then move funds from those categories into groceries  in the month when needed for extra food spending.

      I also habitually skim out what's left unspent in my monthly grocery category (I budget $150 and average less than $120) so I move what's left to a pantry/freezer category for irregular food purchasing. What I don't spend on fresh food this month may buy a 10-lb bag of rice on sale next month or go towards a bulk direct-from-the-farm meat purchase in the fall.

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  • I do this as well (withdrawing from our checking account and assigning the withdrawal to various budget categories, but then placing the actual cash in cash envelopes from which we do purchases).  I don't mind not being able to track which stores we've spent our GROCERY budget dollars from.  However, I have a problem - say I've withdrawn $500.00 from the ATM (checking acct) and tracked that withdrawal against the GROCERY category.  I had already funded the GROCERY category from a previous paycheck, so there was plenty of money in the GROCERY category to cover the withdrawal.  And now, the $500.00 cash is in the cash envelope.  Now I go to the grocery store and spend $200.00, but $50.00 of that cash spending was on HYGIENE items and not GROCERY items.  I have a budget category called HYGIENE, and it has funds available for the spending, but what I don't know how to do is to account for the fact that some purchases were made with GROCERY cash that need to be tracked in HYGIENE.  I do know that I can keep my category balances in line when this stuff happens by merely transferred funds from the HYGIENE category to the GROCERY category, but that doesn't actually track the spending.  If I go back and run a report on what was spent in HYGIENE and GROCERY, they will be off.  Also, I should mention that HYGIENE only exists as a virtual envelope, i.e., it's only a category in YNAB and doesn't have a cash envelope.  So, my problem is this:  given the above scenario, where cash money from the GROCERY envelope was used to purchase items that only have a YNAB category and not their own cash envelope, is there any way to accurately account for these kinds of purchases?  Or, should we simply train ourselves to not do this - i.e., do two separate transactions at the grocery store, paying for all groceries with the cash, and paying for the HYGIENE items using the debit card, which would then be recorded as a transaction with the checking account, and accurately tied to the HYGIENE category?


    Thanks for any advice.


    Rob Jones

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