budgeting cash

Ive been using separate cash accounts for years but i find it hard to remember to enter my cash transactions in and before i know it, i have $0 in my wallet but still have $38 available to use on YNAB. For those of you who use cash, how do you do it? TIA

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  • I don't think there is a magic wand to be waived. The only thing you can do is commit to entering the transactions. I make sure all transactions are entered before I go to bed, including cash transactions. I also clear daily and reconcile my cash account once per week and since I only make 2-3 cash purchases per week, I only have to lock down a few transactions.

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  • There’s also the option if you don’t use cash often to use the category method, which has two flavors. One is a category for cash—you budget money to that category, withdraw it, and it is forever gone from the budget. The other is counting specific withdrawals against particular categories. So if $40 comes out to pay for a Craigslist find, it goes under “Home.” Both have the disadvantage that you get less insight into your cash spending and your reports will be a little off—say if you take out $40, but the Craigslist thing is $35 and you stop at a drive thru on the way home, you end up needing to either go back and split the transaction or $5 of dining out spending doesn’t get categorized correctly.  It can also cause the leftover cash to feel more “free to burn.” But they have the advantage that since the money is withdrawn from the budget at the time it hits your wallet, you don’t end up with the budget telling you that you have money you don’t. 

    I used to use the “withdraw from specific category” method when I lived in a big city where finding an ATM near the place which wouldn’t take my card was easy. I live in a much smaller city now and need cash more often, so I have a cash account and I just make sure I check it about once a week/any time I’ve done a good deal of cash spending.

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  • I think it depends on two things: (1) how often do you use cash transactions and (2) how much of that do you need to track by category?  If you do a lot of cash spending, the suggestions above are great.  And if you have regularly monthly cash transactions, schedule them(YNAB will remember even in you don't ;)  ). I don't use cash very often and only need to track 2-3 cash transactions by category per month (paying the gardener, cash tips for manicurist, etc) - the rest are pretty small (typically under $5) & I don't feel I need to track those granularly. I have a cash account "Wallet"; the transactions I need to track I put in as scheduled transactions with the appropriate category (since they are pretty regular).  I use a category called Misc Cash that I use to capture those small "I-can't-be-bothered to track individually" transactions.  Say for example, I transfer $100 from checking to my wallet but only need $90 for the gardener, I know I'll have $10 for those small transactions (I try to remember to budget those $10 to my Misc Cash category right away) .  Suppose I spent $8 on various things (a cookie one day; soda or coffee a different day) - I don't track those as separate transactions; I reconcile my Wallet account with the actual money in my wallet (I'll reconcile whenever I remember to do it, if I'm honest, but that doesn't matter because it's budgeted so I know I'm not spending the cash on something I'm not supposed to).  In this example, I'd categorize $8 to the misc cash category & all is good.

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  • A couple of things I tend to do with cash transactions:

    1. Ask for a receipt. Many store clerks are so accustomed to people waving away the receipt, they have gotten into the habit of not even printing them, so I always tell them I want one:  Hello. Yes, it is a nice day.  I want a receipt for this purchase.  Then I made it a rule that I can't throw out or file the receipts until I've entered them in YNAB.

    2. If receipts are not an option (and there are many times they just aren't), I take a half minute to memorize the entry.  I silently walk through the categorization of the entry in my head:  $30 for Cash Bar (payee) assigned to gifts & events (category) on such-and-such date with descriptive memo: wine at office Christmas party.  This short moment of time that I take to deliberate plan/think about how I will deal with the transaction in YNAB seems to be very effective at eliminating forgetfullness for me.

    3. Update my YNAB every day. As an incentive, I'm motivated to clean the receipts out of my wallet.

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  • I’ve got YNAB on my phone and I enter at the point of sale. It’s not a difficult habit to get into, maybe because I keep my cash and cards in my phone case, so it’s already in my hand when I pay.

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  • I handled the situation by not using cash anymore.

    That not only simplified my budget, but my pocket too: I stopped carrying around a wallet, and got a cellphone cover in which I can keep my bank card and driver's ID. Instead of two things I had to keep on me at all times, I now only have one.

    I keep emergency cash at home, on-budget as my "Cashbox" account, which I reconcile sporadically by re-counting the money.

    I also keep a wallet with a bit of petty-cash in the car. I assign the petty cash a category when I withdraw it at the ATM,  and don't bother tracking transactions after that point.

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