In today’s episode, Ben and Ernie discuss what to do with cold, hard cash money. For many YNAB’ers debit and credit card spending fits nicely into the YNAB paradigm, since YNAB can interface directly with financial institutions and pull online banking data. Cash transactions, on the other hand, can create a stumbling block since they exist outside the easily trackable, traceable online banking system. Some decide to just not track cash at all. Cash is money, however, and it probably should be part of your spending plan, so Ben and Ernie recommend tracking it in YNAB. It’s not that hard!
There are essentially two ways to track cash in YNAB: in a “cash” category, or in a cash account (there’s a special cash account type you can select in YNAB). Ben and Ernie break down the pros and cons to each approach.
Share your YNAB wins with Ben and Ernie!
budgetnerds@ynab.com
00:00 Intro
02:05 Cash as a category
06:48 Cash as an account
14:31 The Bank of Ernie
21:59 Ben rants about US currency
25:37 Cash discounts
31:21 Resolving Ben’s cash account conflict
36:18 Just try it!
37:01 YNAB Wins
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Having a cash account is a life saver as a parent of two student athletes – meet admissions and parking fees are pretty much ALWAYS cash only. During competition season my cash account stays around $100, off season it drops down to just farmer's market levels of $20-$40. I typically get cash from one of my daughters who earns/receives the cash but wants it put into her bank account, so I transfer from my checking to her account and then take the cash. It's been working well. And yes I LOVE reconciliation day 😍
Ben, I think you would have a love/hate relationship with how Canada handles currency. They stopped using pennies, but they also use $1 and $2 coins (and stopped using paper $1)
Why should you keep cash in the house? So when it drops 6 inches of snow and you really don't want to shovel, you have cash to pay the neighborhood kid looking to make some money!
I have a cash account, and try to pay cash for everything I do in person. It’s a personal conviction of mine that banks are making too much money off of me! I round up or down to a dollar based on whether I used change to cover the cents portion of the payment. I rarely have more than a dollar in change because I always try to spend it if I have enough. The downside of a cash account is at least once a month I’m stuck wondering, where did I spend $10, I’m short when trying to reconcile. I usually remember where it went when I’m falling asleep that night! 😜
I have two budgets.
One for my Norwegian currency.
And one for my Thai currency.
In my Norwegian currency I don't use cash at all at this point.
But in Thailand my budget is mostly cash, and most of my categories are cash.
I do have a Wise account ( and some jars ) with Thai baht, and those get their own accounts in YNAB. One being a Checkings Account ( for the spending ) and one being a Savings Account ( for the jars )
But each of these accounts get their own Category GROUP in the budgets.
My Brain can not deal with specific categories being both cash and card. So I separate them and use them differently.
Curious question, how much cash does everybody keep at home?
In the Netherlands they don’t use the 1 and 2 cents for euros while neighboring countries do. The number is just rounded up or down to the near 5 cents if you pay in cash.
Ben, I'm not sure why Kaitlyn needs to reconcile her cash account. If the money is already "spent" in the budget then is it not hers to do as she wishes, and therefore the next month shouldn't depend on what is in her wallet?
It’s me. I’m the person who drives by the ATM on the way home and puts that $1 back in the bank and re-assigns it to the category it came from. Change goes into my piggy bank.
I move money from the bank account into a cash category, and then post say $5 in the cash category to the Post Office for stamps.
I have two cash accounts. One for hurricanes (live in FL) just because they always say to have cash on hand for after in case electric is down, etc. The other one is for my "wallet cash" which I only need because I refill water bottles at the grocery store and it's $0.25/gal. This brings up my biggest issue with cash accounts. The water machine is extremely annoying – it will give me change back and then refuse to take it or occasionally it doesn't give me change at all. Every once in a while it gives me back way too much. Reconciling that account makes me angry every time because ot NEVER matches up!
Living in Mexico we have a US checking account and a Mexican checking account. I have to run two budgets, one for USD and one for Pesos. Since Mexico is basically a cash economy, the Pesos budget also has pesos cash account. USD are transferred to the Mexican checking account (using the likes of Wise or similar). Then I transfer pesos from the Mexican checking account to the pesos cash account from which we spend. It works.
A question on cash accounts vs categories – most of the cash I have I receive from people paying me back for meals, gift cards, etc. I think I would have to set up a separate cash account to track these, to keep these separate from my bank accounts, but I'm trying to think about the easiest way to track these amounts. I tend to forget to use my gift cards for months and sometimes years at a time. A part of me wants to set up cash categories for general cash I have laying around, and then each gift card, so I could see how much is available on each card. On the other hand, the gift cards I have on hand would all apply towards fun money, and I have a category for that. But if I assign all these cards there, when I go to make a purchase I may just go to a store that doesn't accept these gift cards, or I may forget to use them anyway. Any suggestions/thoughts? Might be totally overthinking this lol
YNAB Win! Thanks to YNAB I was able to budget one month ahead on all my must haves (rent, utilities, loan payments, AND true expenses), and still have enough left over for some fun money right in time as I transitioned between two jobs. Due to something completely outside of my control, I ended up with a whole unpaid week between these two jobs, and my next paycheck was delayed because of it. But, thanks to being a whole month ahead, it was no sweat, and I was able to keep cool, calm, and collected while worrying about more important things like spending time with my family or picking out my clothes for my first day at work!
I have a cash account but I hate counting cash. But I do not round 🙂
Don’t use cash, but shocked that so many still do and for such a wide variety of reasons
I have a cash account and love it! We reconcile to the Penny Ben !!! 😂
Similar YNAB Win: A couple of days ago my water heater burst and I currently have just enough money in my Appliances category to buy a new one outright without worry!
Pennies cost more to make than they're worth, them existing is a net negative! Get rid of pennies!!
There are $1.3 billion worth of pennies in circulation. About $62 million are lost by people every year. I will take any pennies you don’t want.
Once I pull cash out of the budget that’s it. There is no further accounting of it. I have a cash withdrawal category that Supports ATM and bank withdrawals.
I use cash as a category for "house cash", but for the physical dollars, I actually use the old school envelope system. Feels best if both worlds for me.
I have a cash account and reconciling it is the bane of my existence 😂 100% with Kate on this
Oo, thanks for discussing this. I was using some wacko combination of getting cash out of the bank for trips and then not using it all and trying to put numerous splits into the withdrawal. It was a mess. I just set up a cash account and I FEEL BETTER ALREADY!
I had a moment of uncertainty when the cash amount I started with showed up as Ready to Assign and my tired brain said Wait I don't want to assign this money! What do I do? And then I realized I didn't have to. I could put it in my Waiting for Next Month category just like all the rest of the money I wasn't ready to assign, and voila! I am good to go! Yay!
A penny LOSES THE GOVERNMENT MONEY. Or at least that's what I've heard. It costs more than a penny to mint a penny
This was great, classic Budget Nerding! We've had 2 wallet cash accounts since beginning YNAB 13 years ago, I reconcile them both at the end of the month. I rarely have to go to the ATM having a cash bank at home. One of us doesn't like to remember to record cash spent, so I record his spending if I'm with him, otherwise he lets me count up his wallet and I randomly assign the discrepancy to however many categories I guess it could have gone to. I threaten to take it all from Hunting, but usually spread it over a few. 🤣
I have both a cash account (Cash Stash) which is in a safe. Whatever comes out of it goes to the appropriate category. If it's 20 bucks to replace what cash I spent out of my pocket, it goes to an "untracked cash" category. I make sure that my untracked cash category total remains small over time.
I’ve been considering adding a cash category, this might be the push I need! Whenever I withdraw money it’s only ever for a specific purpose, so I’ve been coding it to that purpose (mostly some type of entertainment or charity). I do end up with a little extra cash afterwards, and I’ve never taken the step of re-depositing in the bank, it’s free money at that point 😂
A gas station near me offers a cash discount, and I have regularly bemoaned my inability to take it, because I don’t have enough cash on me to pay for a tank of gas and didn’t want to have take out cash from the bank (out of my way) just for that. A cash account with $100-200 could solve that problem!
I do need quarters sometimes for the air pumps when tire pressure is low. But even those now have a card option, just like every vending machine. So, “change” is being rendered useless. Or, in reality, change has become a nuisance.
I keep a Cash Account for myself to keep track of my cash spending. And I also have a CASH category for my husband where he doesn't have to track any spending – it's just money out to him and I don't have to get involved with how he decides to spend it.
Glad I found this podcast and feel validated knowing that there are some just as budget-nerdy as me.
I like that you all have longer videos. I love the rambling and being able to listen while working/driving. Thanks for your content. It helps YNAB to still feel "fresh" and "new." Cheers
I do both. But my “cash” category is like a slush fund/buffer. And I track all me cash expenditures out of my cash account.
I agree, end the penny!
I also have a cash account. It’s only used a couple times per month. Mostly for tipping a delivery person or if we need to reimburse someone for a random reason. I do reconcile it because my husband would otherwise use it as his petty cash source. ( We each have a pocket money account).
please give Kaitlyn a cash category and stop nagging her 😉. We have cash in the house for craigslist stuff (buy and sell) but we don’t track that in ynab(only with pen and paper). all our cash transactions go in the cash category or specific category like furniture or food if its a big amount. way easier than counting your money every week. but i think its one transaction a month. Here in Holland we stll have 1 and 2 eurocents, but we don’t pay with them in most shops, it’s rounded up or down to 5 cents. Only if you pay by bank transfer you pay in cents.
Would like to see your wives on the show sometimes!
I have 2 cash accounts. And my husband is a cash category. We decided how much he had to spend with no questions asked. I keep both cash accounts in my wallet (mixed together, but tracked separately) One is household/petty cash and the other is personal. If my husband spends his money on household, he just gives me the receipt and I pay him from my petty cash account and track normally.
This is RIGHT ON TIME because I’m employing cash enveloped for like 3 categories that I want to overhaul my impulse spending in: eating out, gas, groceries.