Using the "Wallet" (Cash account)
Hi,
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I've been using the wallet to track those times where I have withdrawn £10 in cash to pop to the corner shop for a bottle of pop (which I then log, as it gives me a reflection of what I'm actually spending that cash on instead of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.
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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.)
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Elle Jay Thanks for the response.
My main reason for using YNAB is to get control of where I'm actually spending money. In the past I've had no idea if my prediction for what I'm going to spend on "food at work" was accurate or not. Quite often looking back over my bank accounts I'd just see cash withdrawals of £10 here, £20 there, with no real idea of what actually I needed that cash for. Quite often (but not always) it is to get a drink from the corner shop opposite work (who don't take card payments). For me, knowing exactly what I'm spending my money on is very important at this time.
I don't anticipate being able to keep track of every single penny, and I'm still in my trial period for YNAB, so I'm still getting my head around the whole system and am interested in what works for everyone else.
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Turquoise Major If it's just all based in one shop (aka its cash only) - could you therefore say card is for everything but that one purchase and only use the £10 taken out to buy that drink or snack in the corner shop over the next few weeks. Would that work? Then if you need cash for another reason. Take more out. Basically use the cash envelope system but on a much smaller scale. (eg. In our shared house we have cash that sits in a cup for all household stuff. I know I need to contribute £10 a month but it goes down slowly over the 4 weeks as we buy stuff. If I were to track that money, I'd know that entire £10 goes to household despite it being used over several weeks etc.)
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Elle Jay The main reason to track cash is it's just another payment method and to better understand spending, both amount and timeline. Just chalking up a $20 withdrawal from the ATM machine entirely to Household Goods because you needed to pay $5 cash inflates your Household Goods averages/etc. and decreases that of whatever you use the remaining $15 on (e.g., groceries). Same thing applies to the transaction dates -- I might pull out $100 that will last me for 6 months at the rate I consume cash.
A cash account is also incredibly useful if you ever get reimbursed in cash (e.g., you put a joint lunch on your CC for miles and pick up your friend's cash). I would bet 9 out of 10 cash-category users don't know how to deal with this scenario, but it's quite intuitive with a Wallet account.
I think the "cash category" approach is appropriate when you have many cash transactions that do not total a significant amount. I view the "cash account" approach as more appropriate in all other cases: few transactions (obviously not a burden) or many transactions that add up (because accurate knowledge of significant spending is important, at least to most people).
Additionally, the cash account can be as easy as the cash category approach. If you don't want to record some small purchases, then don't. When you reconcile later, just chalk it up to the most likely category.
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dakinemaui Thanks for the comment but I already knew all that :) It just sounded like this comment was directed more towards lower purchases. Taking £10 out isn't a huge deal and as mentioned above could be spread over a few weeks of purchases. Once cash is out for me it basically doesn't exist anymore. From the comment this poster is a Londoner and card is king here.
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Elle Jay After the OP said they want "a reflection of what I'm actually spending that cash on", you replied with that you "don't go into detail with cash" and asked if there was a reason they wanted to track it. It seemed like you may not have understood the reasons. My mistake.
Perhaps I should have read more of your followup posts first. I also thought the OP would be interested in the general differences between approaches, if nothing else than to confirm they were going down a path that would give them the insight they wanted.
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dakinemaui My first comment was worded so terrible - sorry for the confusion. I suppose I meant 'don't go into detail' as in know it's going that into a category and keep it aside for that category. That way it's still clear where it's going (grocery/snacks etc) but not to the penny of what shop. I find that less stressful :)
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Elle Jay haha... I'm not a Londoner - Black Country Born and Bred (West Midlands)
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Turquoise Major Ahh sorry I could have swore you mentioned an oyster in another comment >_<! Also not a Londoner but live here for my sins..
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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.
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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.
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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.
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jenmas by purse do you mean handbag? In the UK, a purse is similar to a wallet (weird gender differences mainly).
I bought a large purse/wallet. It's gorgeous but I find I rarely carry it. I wanted to be like you and look organised, however, I'll do anything not to have to carry a handbag/backpack. My travel cards and CC are normally in my back pocket for ease of access on and off the tube so what notes* I have tend to get stuck in there. A few coins end up in the front pocket of my jeans and then I can go out without a handbag. Bliss.
* Our smallest note is just under $7 and I often just have one £5 max stuffed away just in case. Never more than one or two notes. The downside is we end up with more coins but again I rarely carry more than £5 worth in as few coins as possible. We really can use cards or apple pay for most things these days that I get uncomfortable carrying more. If I need more cash than this I go to an ATM just before use.
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monkeyhanger yes, I meant handbag (though we do say coin purse to refer to a little pouch). I'm not a huge cash person. When I take money from the ATM, I get $200. That will often last me 2-3 months.
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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.
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Patzer For me, missing cash comes out of my Dining Out category.
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jenmas Missing cash comes out of Mrs. nolesrule's Spending Money. 😄
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nolesrule ah the beauty of budgeting as a single person. Basically everything is My Spending Money at the end of the day.
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jenmas The beauty of being married is I can take shortages away from someone else. 😂
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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.
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nolesrule Hahaha, in our house any loose cash is free game for anybody ;) Most I suspect actually ends up in our 3-year-old's moneybox, she's already into the good saving habit :)
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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.-
(Though I just checked and my wallet was spot on after two months of not checking. Go me.)
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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.
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We have several cash accounts, my Wallet, spouses Wallet, and the pile in the safe. Accounts are merely locations in YNAB.
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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.
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HappyDance Three cash accounts for well-defined purposes is interesting. Time was, I had my main cash account ("Cash") and a second cash account ("Reserve") representing some bills in an envelope in a locked desk drawer. The point of Reserve was for the eventuality of needing cash when Cash was low and it was inconvenient to get to an ATM.
After a few years of never needing to touch Reserve and declining use of cash for spending in general, I eliminated the Reserve account. Now I just need to remember to get to an ATM before I go on a road trip, where I'll want to use cash so I don't have to create multiple one-time payees for lunch, dinner, and snacks. Yeah, first world problem.
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HappyDance I just closed my Quarters account, which I kept solely for the purpose of laundry. I transferred (physically & in YNAB) what I had left in quarters to my Coin Jar account when I moved into my house. I'm not sure why I keep the Coin Jar account (other than it being the place that loose change lives) because I hadn't added or subtracted any coins from it in years. My Cash account is usually pretty close so long as I am keeping up with YNAB in general, but at some point I clearly had lost track and didn't notice during a fresh start, because I found a $20 bill while packing for the move!
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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.
