Cash rules some things around me.
July 17, 2011 3:29 PM   Subscribe

If you use budgeting software, do you have a good system for tracking and categorizing your cash spending?

I just started using budgeting software (Moneydance, after reading some favorable reviews and trying out the demo). I use cash... not all the time, but frequently, and I'm trying to come up with a way to categorize what I spend cash on. (Generally it's when I order lunch at work, but there are other occasions too.) My experience has been that software like this is more geared towards checking and investment accounts. Do you use any sort of budgeting software (doesn't have to be Moneydance...I imagine you can do similar things in most of them), and if you do, what's a good way of tracking cash spending?
posted by andrewcilento to Computers & Internet (16 answers total) 13 users marked this as a favorite
Best answer: (I used MS Money for about eight years and switched to Quicken two years ago when Money was discontinued.)

I try to track every single dollar I spend, whether with cash, debit or credit cards. I ask for receipts for any transaction that uses a cash register (it's weird at first, but the cashiers don't care and it quickly becomes habit - even my kids know to do it if I give them $) and try to write down smaller expenses where I can't get a receipt.

I set up a Cash account and transfer all my ATM withdrawals into it.

For the most part, I reconcile every morning. There are times, though, that it's not convenient to track small purchases or I feel like I need a break - like on vacation, for example. I make sure I reconcile before I go and then when I get home I enter any purchases over, say, $20, and the rest gets categorized as "Vacation:Beach2011" or whatever.

If I miss a couple of days and end up a couple dollars off in my reconciliations, I have a category called "Small Expenses" that I apply the difference to.

This probably sounds weird and joyless to some people, but it's nice to never have that "I had $50 on Monday; where did it all go?" feeling.
posted by Sweetie Darling at 3:59 PM on July 17, 2011 [2 favorites]

I tracked cash spending for a while using Quicken on a Palm Pilot (not sure it even still exists, since Palm has gone down the cell phone route). I rounded all purchases up to the next dollar, so even if I spent $4.01, it got recorded as $5. I entered them the next free moment I had, since I had the Palm Pilot with me. This meant I didn't count change I spent from my pocket on the grounds that it had already been recorded as spent.

This was surprisingly not irritating. At the time, I used cash for virtually everything that wasn't groceries, rent or utilities. (I had a job that paid in cash, so I had lots of cash around all the time. And, yes, I paid taxes on it. I only knew my income because it was in Quicken.) Since I rarely synced the Palm Pilot with Quicken on the computer, it was the check and credit card transactions that I had trouble tracking. The end of that gig meant I no longer used as much cash, nor had appointments to keep track of, which pretty much killed both my money tracking and use of the Palm Pilot in general.

I've recently adopted a budgeting system that counts everything that's not an obligatory expense (rent, utilities, groceries, cat stuff, clothes every few months, etc) as a 'free spend' which eliminates the need to track cash too carefully. If I take $20 out of the ATM, it's bound to end up spent in the 'free spend' category and that one transacation is good enough for me right now.
posted by hoyland at 4:23 PM on July 17, 2011

I use iBank on my Mac and on an iPhone. Syncs nicely over Wifi.
posted by nicwolff at 5:28 PM on July 17, 2011

When I was on a big "where does it all go" kick on Quicken a few years back, I too struggled with accounting for cash, and ultimately found that it was easiest to pick my battles w.r.t. tracking, and let the rest be treated truly as incidental.

I'd try to do as much as possible with debit/credit cards (and would regularly deposit cash, including loose change, so I didn't just have it "laying around"), but after a few months of reconciling my cash spending daily, I had a pretty good idea of where it was going and thus could set an appropriate monthly cash budget for it.

So, at the beginning of the month I'd set aside $x in cash for work lunches, $x for newsstands, $x for transportation, $x in quarters for the laundry, etc., and put those amounts in totally separate locations (one envelope in my desk drawer at work, one in my front hall for delivery guys, separate pockets in my bag, etc.). Then I could reconcile just once at the end of the month where I'd gone under or over in those categories without having to collect every single receipt.

Obviously if there was a big unusual expense I paid cash for, I'd just enter that manually, but most of the rest was small and incidental enough that I could comfortably let it go as "Miscellaneous."
posted by mauvest at 5:32 PM on July 17, 2011

I use iXpenseit on the iPhone. You can export to Excel, and various PDF reports as well (although I think there is an in-app purchase for some of these).
posted by backwards guitar at 5:42 PM on July 17, 2011

I categorize the ATM withdrawals and then don't worry so much about the actual cash. Once it comes out of the ATM it's as good as spent anyway, in my personal universe.
posted by restless_nomad at 6:28 PM on July 17, 2011

We use Mint. All cash withdrawals go to "Transfer for Cash Spending". We keep a little sticky pad on the refrigerator with what we spend cash on. I enter those transactions at the end of the month, which usually covers about half of the actual cash we took out. The rest gets covered as a "Cash Adjustment" transaction at the end of the month, designed to balance exactly the cash that we took out for the month.

The big key is that I don't worry about how much cash we actually have on hand at the end of the month. Cash in == cash out. That means if we take $200 out on the last day of the month the adjustment transaction for "misc" is $200 high, but it'll be $200 lower next month.

Generally that gets us close enough - if the adjustment transaction is too big, we try to do better the next month about tracking cash.
posted by true at 6:57 PM on July 17, 2011

Best answer: In the software I use (You Need a Budget), Cash is set up as another account, like a checking or savings account. My cash account shows the amount of cash I have on hand, and when I spend some, I record it as a debit from that account, and apply whatever category it was used on (i.e. lunch at work). When I get cash out of the ATM, I record it as a transfer from my bank account to my cash account. It works pretty well!

Looking at the Moneydance User Guide, it looks like a cash account should be set up as a "Bank Account".

Tracking cash has been really helpful for me. I had no idea where it all went before!
posted by fussbudget at 7:25 PM on July 17, 2011

I also use hoyland's method of rounding up to the next dollar / not counting change spent. It's close enough to give me a pretty good idea of where it's all going without making it too difficult for me to remember how much I spent on that ice cream cone, etc.
posted by fussbudget at 7:30 PM on July 17, 2011

If you have a smartphone you could use a note app such as Evernote or SpringPad to record the amount and category. Then manually transfer the information to your finance program.

For example, I use SpringPad and write down 2 weeks worth of dates at a time on my computer. When I make a purchase I edit the note with the amount and category underneath the corresponding date, and every week or two I transfer it to my finance program. Its pretty easy to get into the habit of recording cash transactions, but I'm still looking for a great personal finance program that works well with the concepts from Your Money or Your Life.
posted by Mr. Papagiorgio at 7:41 PM on July 17, 2011 [1 favorite]

Best answer: I use Quicken. I too set up a Cash Account called "Joint Account Wallet". ATM Withdrawals are "transferred" to the Cash Account. We use so little actual cash in our family it really isn't difficult to follow. If I cannot remember in detail I will guess. For instance out of $15 approximately $5 went towards parking and $6 went to pool fees at the local park, and the rest is still in the "account" which is really a jar on my dresser my husband or I can pull from if we find ourselves going somewhere that needs cash.
posted by BuffaloChickenWing at 7:52 PM on July 17, 2011

Best answer: fussbudget: "In the software I use (You Need a Budget), Cash is set up as another account, like a checking or savings account. My cash account shows the amount of cash I have on hand, and when I spend some, I record it as a debit from that account, and apply whatever category it was used on (i.e. lunch at work). When I get cash out of the ATM, I record it as a transfer from my bank account to my cash account. It works pretty well!"

I use YNAB and do this too. The only exception is where I'm doing something where I don't feel like or won't be able to track each withdrawal from my virtual 'Cash' account. In that case, after transferring, say, £30 for a night out to my 'Cash' account, I then immediately 'spend' it with another transaction. If I wake up the next morning with change in my pocket, that's gravy and I just spend it without tracking.

Cash tracking can seem laborious when you're starting to do it, but with an iPhone app it's pretty painless, and the method above is good for getting around occasions when you just want to spend a bit of cash without whipping out your phone to record every drink you buy. The feeling of control and certainty is worth it if you're on a tight budget or repaying debt.
posted by Happy Dave at 3:45 AM on July 18, 2011

Yeah, I occasionally do this, when I feel that I am spending too much cash on unknowns. The basics are:

1) Set up a cash or wallet cash account.
2) ATM withdrawals are transfers from your checking to the cash account.
3) Every so often you update the balance to the current amount of cash you have, and the difference is entered in the Misc Cash Expenses category.

I don't bother tracking cash most of the time though, because if you don't keep good records or update the software constantly, it's very easy to forget to record stuff, and then you have a $100 ATM withdrawal that is $75 Misc Cash Expenses and what is the point?
posted by smackfu at 6:42 AM on July 18, 2011

My wife and I did this in Numbers (Apple's Excel equivalent) for a few months to get a handle on our spending. We'd collect receipts or write down notes during the day, and type everything in before bed—pretty much like you're doing.

We'd categorize who spend the money and on what.

Our categories were as follows: booze, business, car pmt, clothing, coffee, credit card, durable goods, entertainment, groceries, house stuff, insurance, medical, mortgage, personal, restaurants, taxes, transit, travel, utilities

I could send you a spreadsheet template if you want. These days, of course, there are a bazillion smartphone apps for tracking expenses as you go; I used one on a trip for the iPhone called Expenditure, which is basic but did everything I need (and can export CSVs for import into a spreadsheet)
posted by adamrice at 8:53 AM on July 18, 2011

I like tracking my spending, but I'm lazy. My solution was to use Mint, and use my credit card for most of my transactions, paying it off in full every month. I only keep cash around for the occasional cab fare, street food stand, etc. I've reduced my cash spending to an amount that I feel comfortable writing off as incidental. Mint automatically categorizes all of my credit card spending, and I'm able to get the rewards off of my card.
posted by craven_morhead at 11:34 AM on July 18, 2011

Response by poster: Thanks for the suggestions, everyone! Setting up an account for cash seems to make the most sense, so that's what I'll be doing.
posted by andrewcilento at 7:04 PM on July 18, 2011

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