Budget Nerds #86 - Cash Categories vs Cash Accounts
Mar 20, 2024
Ben and Ernie discuss managing cash in YNAB, comparing cash categories and accounts. They explore fungibility for simplified money management. Debate over using pennies, cash vs. credit cards, and reconciling cash transactions. Listener shares success with appliance repair/replacement category.
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Use A Cash Category If Cash Is Minimal
- If you rarely use cash, track it as a cash category to avoid extra bookkeeping.
- Use a cash category when cash is small and infrequent so you don't overcomplicate YNAB.
Set Up A Real Cash Account In YNAB
- Create a YNAB cash account (use the cash account type) to record physical cash transactions like a bank.
- Enter starting balance, assign jobs, and record each cash spend to keep categories accurate.
Multiple Cash Accounts For Different Uses
- Ben keeps three cash accounts (his wallet, his wife's wallet, and house cash) to manage different purposes.
- He uses house cash for small bills, poker change, and kids' $1 allowances, transferring as needed.