Shuffling cash

I'm having a hard time thinking this through - how do you move piles of cash around in your budget, once the money is already removed from the checking account? I've got a handful of cash available for paying kid allowances but that frequently goes for incidentals (e.g., random food truck purchase). How do I show that the money is *actually* spent for x/y/z that I paid in cash, and not actually for allowances? 

20replies Oldest first
  • Oldest first
  • Newest first
  • Active threads
  • Popular
  • I personally have a budget category for cash and gift cards, as well as a made up account to record transactions in. When I receive a gift card I inflow it to the respective category, and when I take cash out I do a transfer from the respective account. Then I record transactions in the same way as I would with any other account.

    Hope this helps!

    Like 1
      • Hannah
      • Account Manager
      • hannahsbudget
      • 2 mths ago
      • 1
      • Reported - view

      Hannah here's a snippet, hope it makes sense!

      Like 1
  • I have a cash account in my budget that I use like any other account. An ATM withdrawal is just a transfer from Checking to Wallet. I have never lost track of more than $0.03 since 2014.

    Like 3
  • Sky Blue Banjo I'm curious - do you have a cash account on budget at this point?

    I'll second jenmas's "cash as an account" method - it might be just the thing for your budget! You can find more details on how to manage that outlined here.

    Like 1
  • Thanks for all of these suggestions. I think I might try the cash category to start, just because I spend so little actual cash - but it feels spongy and doesn't seem to be in line with the rest of the budget. Experimenting!

    Like
      • Bruce
      • Software Engineer
      • Bruce
      • 2 mths ago
      • 2
      • Reported - view

      Sky Blue Banjo I don't have a cash account in my budget.  I have some categories that I know are for cash, like my and my wife's "blow money" (name stolen from Dave Ramsey).  It goes into the blow money category, and when I pull it out of there, it's gone.  The budget doesn't care any more.  It's money that can be blown on anything, and as far as the budget is concerned, it's gone, so you can use it for whatever the heck you want to.  And sometimes I do leave some money in the blow category, so if I see something online that I want to blow it on, I can spend it that way too.  But once it's in my wallet, it's gone.  

      I don't know, it works for me (us), but I know it would be troubling for some to not account for the money in their wallet.  And sometimes I'll go catch a flick at the theater, and pay cash...  Depending on how things have gone, and on how I'm feeling, I may move some money from entertainment to blow to cover it.  Or I may just leave it as spent, 'cause that's what it's for.

      We used to do the same for groceries, but with CC rewards, we found it to be more beneficial to just leave it in the category and spend it on the card.

      Like 2
      • monkeyhanger
      • No animals were harmed
      • monkeyhanger.1
      • 2 mths ago
      • 3
      • Reported - view

      Sky Blue Banjo I have a cash account for this reason and I also rarely use cash. I just couldn't get away with treating cash as spent when it came out of the bank but everything else at the point of purchase. 

      So many places in London won't accept cash at the moment due to COVID. My Dad gave me cash yesterday to cover something I'd ordered online for him and my first instinct was what am I meant to do with this! Thanks for inadvertently reminding me to enter it in YNAB.

      In the days where I used cash a little more frequently, the cash account was the one place where I would make a reconciliation adjustment. I always did it manually and my only rule was that if I couldn't remember what it was for, it had to come out of my personal fun money - a pretty good incentive to accurately record anything else!

      Like 3
    • Sky Blue Banjo Remember, you can totally switch it up at any point - both methods are totally viable! Let us know how it goes 😊

      Like 1
      • MXMOM
      • MXMOM
      • 2 mths ago
      • 1
      • Reported - view

      Sky Blue Banjo I did it like Bruce when we first started. Partly because we were paying almost everything in cash and were not yet using YNAB. But then I started to get periodic inflows of cash (sell stuff online, gifts, etc.) and I couldn't keep track. So I changed to a cash account.  I rarely use it as part of the regular budget (well only about once a month) when I withdraw all the cash I need for spending money etc. I record that as a transfer to the cash account (no category needed). Then I give it to the various recipients (hubby, kids, etc.) and record a transaction from there. For hubby, his spending is actually divided into more than one category so I do a split transaction.  I even set up a cash account for hubby for when he spends his own money on something but I don't have the cash to pay him back or when his work gives him cash reimbursement for stuff paid on credit card.  

      Like 1
  • I have a cash account, a withdrawal is just a transfer. When I spend cash i record it to a category. Of course its easy to forget where it went, so at least once a month, sometimes more often, i count how much cash I have and compare to cash account balance, and enter a  transaction for the difference. Usually assigned to groceries because for me that is where cash purchases normally are. I your case, if you hand out the allowance, you would enter a transaction to cash account and allowance category, if you spend it on food truck the you would enter it there.

    Like 1
  • Now I'm thinking cash account is probably the way to go. I just want to account for the individual spending, since I know there are a couple definite categories that the cash goes to - it's not *just* a slush fund for a buck or two here or there, but the payouts aren't regular. Taking the plunge!

    Thanks everyone!

    Like 7
  • So, I set up a cash account. When I enter transactions in that account, I am getting double charged for them. For instance, I entered a $20 transaction for swim lessons. The $20 was deducted from both my cash account and my budget line, without transferring the cash into my Ready to Assign to put the cash into the appropriate budget line. Does anyone have a streamlined fix for this?

    Like
    • Actually, I think I see the fix. I didn't notice the Ready to Assign Category.  Two-step process, but it takes care of the double charge. 

      Like
    • Scratch that. That just puts the money in the budget line but doesn't actually show it as spent. 

      Like
      • Emma Catherine
      • Civil engineer getting back on track
      • emmacatherine
      • 2 mths ago
      • 3
      • Reported - view

      Sky Blue Banjo If you spent $20 cash on swim lessons and entered a transaction in your cash account as -$20 with the category swim lessons, that's all you have to do! The money should already be budgeted in the swim lessons category for you to spend from and when you entered the transaction it took it from that line item.

      Like 3
      • MadDog
      • Navy_Blue_Pegasus.2
      • 2 mths ago
      • 1
      • Reported - view

      Sky Blue Banjo The first thing you need to do is to move the cash from the account you are physically withdrawing it from into the cash account. So, if you take $100 from your chequing account in cash, you show that transaction in YNAB. Transfer $100 from Chequing account to Cash Account. Now, the cash account has the $100 and you enter the $20 swimming lesson. 

      Your budgeted money for the swim lessons does not come from this transfer of funds. It should have already been accounted for as part of your budget.

      Like 1
  • I must be overthinking this. Going to trust the process. 

    Like 1
      • monkeyhanger
      • No animals were harmed
      • monkeyhanger.1
      • 2 mths ago
      • Reported - view

      Sky Blue Banjo This article is helpful (although I think it's been updated since I used to quote it). It's worth reading it a gazillion times until it's really clear because as well as answering your queries about a cash account it unlocks the full power of YNAB because you no longer try to match 'saving' categories to particular accounts.

      https://www.youneedabudget.com/the-relationship-between-your-budget-your-accounts-its-complicated/

      The account side of things is just the physical location of the money. If you withdraw $20 cash that is the equivalent of moving a $20 note from your front pocket to your back pocket. The physical location of the money has changed so you need to record a transfer in your accounts but no money has been spent so the budget is not impacted. It does not hit RTA as the money was already in the budget.

      When you spend the money you record that as normal with a transaction in the cash account using the category for swimming lessons.

      Does that make sense? Essentially when you use a cash account withdrawing cash from the bank account just changes its location so is just a transfer between accounts that does not hit RTA or any budget category.

      Like
      • nolesrule
      • Stealing From the Future fix is an improvement but is incomplete....
      • nolesrule
      • 2 mths ago
      • 1
      • Reported - view

      Sky Blue Banjo You assign the money to the category when the money enters your budget and it's sitting in Ready to Assign. That's usually when you get paid.

      The money comes out of the category when you spend it.

      The ATM withdrawal is just taking money from your bank account and moving it to the cash account. There is no change in how any of the money is assigned in your budget.

      Like 1
    • Sky Blue Banjo If you get stuck, it might be helpful to enable Support Access, so we can take a look at your budget! Just let us know if you'd like to do that. 😊

      Like
Like Follow
  • 2 mths agoLast active
  • 20Replies
  • 221Views
  • 12 Following