It’s the Absolute Ultimate!! #8: Part 4 of Gidget Talks Money {Free Download!}

This is the last post in a four-part series called Gidget Talks Money… make sure you didn’t miss Part 1, Part 2, or Part 3 {with giveaway!}.

Creating a Cash Account

Do you ever withdraw a $20 dollar bill and then a week later, wonder where that money went? Many places don’t give receipts for cash purposes, so budgeters are left guessing and trying to remember what they spent their ATM withdrawl money on.

This used to be a constant dilemna, until we figured out a method that works for us. One thing I love about the technological era we live in is the live access we have to our bank accounts online. Anywhere you have safe internet access you can login, and check your balance and what purchases have cleared, in case you lost or didn’t receive a receipt. This is what I need, thought I, a ledger or “account register” for my cash!

The way I used to do this was create an new account in MS Money or iBank that I call “Cash Account” (creative, I know!). If you use one of these types of budgeting softwares, you can still use my instructions below. If you’re using Pear Budget, you won’t have “accounts” set up, so I have a free download for your accounting pleasure.

The Solution

Moondoggie (Xcel-savvy engineer that he is), just recently made me this spiffy spreadsheet for our Cash Account. Up until then I had been using iBank just for the Cash Account, but this spreadsheet is much simpler, which I love. Follow these simple instructions and you’ll be on your way to “losing” less cash spent!

1. Download the cash-account. Here’s what it should look like (click to enlarge):
2. Change the Starting Balance to however much cash you have on-hand. (Always keep the “y” in the Reconciled column for this line).
3. Add your first item: I chose a common cash expense. Enter the Date, the Location, a Category (that corresponds to one of your budget categories), and the Amount (make sure to make it negative). Click Enter. The Running Total will be automatically calculated. The line should turn yellow.
4. Add as many expense items as you have spent. Your Running total will diminish accordingly. You can also add “deposits.” Just enter an item the same way, but use a positive amount. Anytime I put cash into my wallet counts as a deposit (ATM withdrawl, cash back, money paid back to me, etc.).
5. You’ll notice the recently entered items are yellow. This is because they have not been reconciled yet. As soon as you enter them into Pear Budget or your software of choice, simply type a “y” (upper or lower case) into the Reconciled column and the line will turn green.
6. The amount in your running total should always equal the amount in your wallet(s) or envelopes.

This is the best way we’ve found to keep track of our cash. I like because it keeps my running “account balance” for cash spent all in one place and easily accessible.

A Few Final Ideas Related To Cash

• Try to remember to ask for a receipt, or else keep a piece of scratch paper with you or in the car to note cash purchases to enter at home.
• Enter your receipts every few days so you’re less likely to forget.
• Don’t worry about entering your ATM withdrawls into Pear Budget beacause you’ll be entering all that cash in purchase-by-purchase, categorized where it belongs rather than just a chunk of uncategorized money.
• If you do come out uneven every now and then (i.e. Running balance says $57.00 but you only have $50, and can’t remember where those $7 went), don’t stress about it. You’re already keeping track of more cash than you did before, so just enter that $7 as “miscellaneous-unaccounted for” or something like that.
• Round to the nearest dollar. When I made this sample, I just used the amount I spent at Starbucks today. But normally, we just round up. So if I paid with a $5 dollar bill for that drink, I’d enter in $5. If I paid with 4 ones and 49 cents, I’d enter $4. The change is the only thing that goes unaccounted for in this system, and that’s okay, because we usually end up throwing it in a “piggy bank” to save anyways.

I’d love your feedback on this method and the spreadsheet. Try it out and tell me what you think!

Tagged as: budgeting, cash, money, the absolute ultimate