Using the "Wallet" (Cash account)
I've set up a "Wallet" account to give me the detail of any cash I withdraw from an ATM, but I'm finding it hard to reconcile.
According to YNAB I should have £7 in my pocket at this precise moment, however I actually have 15p. I probably do have £7 in cash (maybe more), but it's probably in various pockets or on the sidetable in the house (and maybe rattling around in the washing machine).
I've been using the wallet to track those times where I have withdrawn £10 in cash to pop to the corner shop for a bottle of pop (which I then log, as it gives me a reflection of what I'm actually spending that cash on instead of having a mystery £10 withdrawal on my statement that I don't know what I did with.
I'm comfortable with the fact that I have actually logged every cash transaction I've made (and I'm trying hard not to use cash where possible), but inevitably I've mislaid some change.
How do people accommodate this? Do you just put a "unknown" reconciliation amount in YNAB every so often to reflect the actual cash you have in your pockets?
It's not a major amount, and doesn't really impact my budgeting overall, it just looks like I have a little more than I actually do have.
I just take the £10 straight out the budget and don't go into detail with cash. I find tracking my change to be a nightmare not worth even getting into. Is there a particular reason you want to track that cash? (Sorry to explain if I have anything left over I put it towards another category. For instance if I have £6.50 change I'll add that to the grocery budget and say I spend £30. I'll put £23.50 into the budget as spent on food.)
When I reconcile my cash, I make sure I've gathered any that may have migrated around the house, energy any transactions, and then if the balance doesn't match I enter a transaction with "lost & found" as the payee & my fun money as the category to account for the difference. I do the same to add any coins I find that weren't accounted for. I could use TBB as the category, but I find that I usually spend cash I don't record on fun stuff.
Firstly, I keep my cash use to a minimum and to record any cash transactions in YNAB asap. Then I try to have only a couple of locations where I keep cash in the house. I'm not always that good but if I know to check my jeans pockets and the dish by the bed for coins and my oyster and credit card holders for notes (the new £ notes are so slippy I never keep them loose in my jeans any more) then I know it's easier to round it together to reconcile.
When it comes to reconciling I take the total of the rounded up cash as gospel and put through my own reconciliation adjustment rather than a YNAB standard one allocating the remainder as best as possible. As I don't use much cash this is good enough. Any unaccounted for cash comes out of my fun money so it's in my best interests to (a) stay as up to date as possible with recording, (b) remember what I've spent it on and (c) keep control on where the cash is. As some of the coins end up in the car for parking and I'm too lazy to go down to the car park and count these, I often get positive reconciliation adjustments too.
I have tried treating cash as spent when I took it out of the bank but I hated it. I'd much rather have small adjustments against my fun money but not consider any money spent until it is actually spent. Like you I also prefer to know where most of it went even if it's not perfect.
All money stays in my wallet. Full stop. I never put it in my pocket or let it run loose in my purse. Since 2014 I've only been off on cash reconciliation more than 4 times and never more than $0.03. My Emergency Cash Stash is a separate account and that money is kept in a secure place in my home. I keep a $20 in the car in case of an emergency parking situation, but I entered that as a transaction in my wallet account against my parking category the day I put the money in my car.
I track cash as an account. There was a time when I would count my cash, and come up short of my records. I'd forget to record transactions, misplace cash, whatever. I just didn't know. In Quicken, before I had a budget, I'd just make a weekly entry for the missing cash, and give it a category of Miscellaneous.
Enter YNAB. The goal is to control spending. So, what to do about the missing cash? I decided to categorize any missing cash as "Fun Money." That would give me an incentive to actually keep track of my cash better. Those weekly reconciling transactions got a lot smaller, and were frequently zero. Now, it's more like monthly. And the reconciling transaction is more likely to be an inflow than an outflow, because I never record a transaction when I find spare change in a parking lot or I get a loose cart at Aldi but redeem the quarter for returning it to the rack.
You need a place to keep your cash that you will always keep your cash, so that it doesn't get lost. Lost cash doesn't do you any good, because it's not available to you, even if it's somewhere in your house.
I don't bother with small loose change much anymore though. I dump it in a jar, and round my cash spending to $0.25 increments based on the change received. If the loose change gets large enough, I'll convert it to paper money and bring it back in my cash account. Make a cutoff point based on your coin denominations and the resolution you're willing to track.
The only time I've ever been off is if Mrs. nolesrule grabs some cash from the stockpile without telling me.
I can't be bothered to keep up too closely with my cash. I round all cash transactions to whole dollars and dump change in a jar. (Most of my cash spending is in whole dollars anyway.) I don't reconcile my wallet very often, so I'm regularly $5-$20 off; if I can't remember what it was for, it's usually that I stopped at a food truck and so I just mark it out of dining out.
I am in awe of people who track to the penny and are always accurate like @jenmas and @happydance but that's not for me, and I don't fuss about it. I only have a cash account because otherwise I have to spend my cash in order to access all the fun money in my budget each month, and that leads to needing to get cash every month.
But do keep your cash in one place. If you are going to have multiple places, have multiple cash accounts in YNAB/treat it differently.
I use a Wallet account and only record whole dollar amounts (round up). I'll either leave change on the counter for the next person or put it in the tip jar or let it collect in a cup on the dresser. If I'm short when I reconcile the account, I just let YNAB make the reconciliation adjustment and edit the transaction to chalk up the missing money to the likely category (Bars & Alcohol). Occasionally, I'll convert the dresser change back to bills, and then put it back into the budget usually categorized as TBB.
I maintain three cash accounts: Wallet, Laundry Coin, Crackpot Fund
I enter every cash transaction accurately, to the nickel (no pennies in Canada). In 4.5 years of YNABing, I have $18.70 attributed to Lost Money and $35.65 attributed to Found Money. I assign lost money reconciliations to the category I use for bank fees and postage stamps and the like.
I siphon off quarters and dollar coins from my wallet and enter a transfer to Laundry Coin weekly. Right now there is over $100 in the coin account. You only run short of the correct denomination of coins late on a Saturday or Sunday night and have to hang wet sheets in your living room to dry before you design a more efficient method of always ensuring you have coin on hand. My solution was a laundry coin account. Now I can see with a glance at my budget if I need to stop by the bank and get rolls of coins in order to do laundry.
As part of my emergency preparedness, I always kept a stash of cash at home (housed in a cracked teapot). I soon found it also came in handy to replenish my wallet on those occasions when I don't want to hit my bank's ATM due to weather, time of day, or busy-ness at the local mall (my nearest ATM location). As a result, I no longer do small withdrawals at the ATM anymore. I'll do a $1,000 cash withdrawal whenever the Crackpot fund dips below $100.
I have a single Wallet account, and I round up any cash expenditures to the next dollar. I throw the change into a container on a shelf and occasionally trade it in for an Amazon gift card via Coinstar machines (don't know if that's a thing outside the U.S.). I don't track the change or gift cards at the moment. If I needed to use the coins for purchases/laundry/parking, I would give them their own account in YNAB.