Handling different currencies.
I live in Ireland so our currency is Euro. I have two questions:
Some of my occupational pension comes from the UK so is paid in Sterling from three different sources. They are regular payments so I could schedule them but I wouldn’t know exactly how much until they arrive. Should I go ahead and schedule them and then alter manually or not bother?
We will be in the UK for Christmas. Some of our Christmas shopping will be done there, so I’m going to need cash. How do I keep track of what I spend with YNAB?
As for the cash, it would probably be simplest to record the cash withdrawal transaction against a category and consider it spent when it comes out of your bank account. I ssume there will be currency conversion involved, so you'll need to enter the withdrawal in your bank account currency rather than the withdrawal currency.
I've used two approaches to the problem:
1. Whenever I buy something in a different currency, I input my estimated cost, and I mark my transaction with the red colour. That way I know what to follow up, seeing as the "cleared" checkbox isn't too helpful there.
2. If it's a lot of cash, repeated, I'll either just add the transaction where I take the cash out, or I'll specifically create a new account for the wallet in that currency.
Dealing with currency in a better way is part of what I miss from the old and no longer updated Android app anMoney, which had all that granularity that you might expect.
Because it's income and not an expense, I'm all for nolesrule 's idea to schedule the payment transactions but leave the amounts at zero until they arrive.
You could definitely record the lump sum of your cash withdrawals against one of your categories (it's always hard for me to keep a super detailed account when traveling). But if you'd prefer to track every pound (er, euro) you can transfer the withdrawn amount into a cash account you create in the budget, then track purchases as you normally would.
I have a very convoluted way of handling foreign currency in YNAB. But it only works for me because spending 20 minutes in the evening messing with a spreadsheet after a day of hitting the Christmas Markets in Berlin is relaxing for me plus I have enough slack in my budget that a few days of guessing isn't going to hurt me.
1) Credit cards are super straight forward. When I buy something I do a rough conversion in my head and enter the amount and just flag it so I know to confirm when the charge clears. As noted above, unless I'm buying something in the 5-figure range, it doesn't really hurt my budget to have some guesses for a few days.
2) Cash is where I let myself jump through hoops. In the beginning of the year I spent 13 weeks over a 4 month period overseas for work. I was in a country where 95% of my transactions occurred in cash. So I had a Google Sheet. I would withdraw, for example, 40,000 in local currency (LC). My bank would immediately show that I withdrew US$110.80. I went into my spreadsheet and set that up to see that the exchange rate was US$1=3610.13 LC. I then just set up some formulas. And I would do my expense entry into the Google Sheet and let it automatically convert my 11,000 LC breakfast to $3.05. I would leave everything in there until the ATM withdrawal went from pending to cleared in my bank account in case there was any changes to the exchange rate. Once the withdrawal is finalized in my bank, I do a transfer of $110.80 from my Cash Management account to my Foreign Currency Account in YNAB. I then enter all the transactions from my Google Sheet into YNAB with the finalized USD amount. During the day I continue to enter transactions into my Google Sheet and then enter it into YNAB in the evening.
Most people would not have the patience to deal with it in this manner. Generally my Foreign Currency Account goes down to zero once I get back home because I do try to manage my cash spending so that if I have a few bucks left over at the end of the trip I just put it in a charity box at the airport or tip generously to hotel staff. So costs would be assigned to either Non-charitable Giving (ie any donation that doesn't go to a 501c3) for the charity box or Reimbursable for the tips (I get a flat rate Meals & Incidental Expenses from work that covers tips). If I have a lot of local currency left over, I usually "sell" it to a coworker who is heading out to the field for whatever rate is on Oanda on that particular day because someone is always about to head out on a trip at work. In that case it gets treated like a transfer from the Foreign Currency account to some other account (checking if they Venmo the money, Wallet if they give me cash).
The one exception is for Euros. Between airport layovers, actual trips, or asking someone to buy something for me when they are in Europe (I like the Colgate Herbal flavor toothpaste which you generally can't find in the US for example), I do generally keep euros on hand. So right now there is a 50 euro note in my wallet. According to YNAB, my Euro Account has $54.74 because that was the final exchange rate when I got the money out of the ATM at the airport in Amsterdam back in March because all the credit card machines in the entire airport were down but by the time I got back from the ATM to the sandwich shop they were working again and I ended up using the card for the points. What category is that money in? Don't know, don't care. It doesn't matter because it is 0.08% of my on-budget total so I don't worry about it.
So is this a "good" way of handling foreign currency. Well, it's my way of handling foreign currency. . .