Tracking or Budgeting “Actual Cash”

[josenydr1]

Tracking or Budgeting “Actual Cash”

Hello, I’m new to the Tiller Community and hope to add some value as I learn. I’m looking for some guidance on the best workflow for budgeting cash accounts (cash, checking, and savings). My main goal is to track whether my “Actual Cash” or “Cash Position” is increasing or decreasing at the end of each month.

At present, all my accounts are linked to my spreadsheet—including checking, savings, credit cards, store cards, investments, and car loans. I’ve recently stopped using credit cards and now pay all expenses with debit cards. However, there are still some credit card and store card transactions (payments and charges) that I need to categorize or hide. To simplify reporting, I’m considering hiding all credit card transactions and/or non-cash accounts transactions, such as mortgage, car loan, etc. Below is a screenshot of the potential credit card transaction categories I plan to use for hiding transactions from reports and the budget.

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Questions About Workflow

• Should I focus only on cash-based transactions and exclude credit card charges (groceries, eating out, shopping, etc.) by categorizing all CC transactions—both payments and charges—with a “hide” category? Or should I continue to categorize those charges as expense transactions?

• Is it better to create a separate spreadsheet to track only cash accounts or adjust my current spreadsheet to accomplish this in one file?

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Goal: True Cash Outflows & Forecasting

My ultimate goal is to plan around real cash outflows such as bills, subscriptions, and credit card payments so I can more accurately forecast cash flow, avoid overdrafts, and gain better control of my finances. My thinking is to treat credit card payments as the true cash outflow from my checking account, since that’s when the money leaves the account, and hide all other transactions, such as CC payments and charges.

Any guidance on how best to set this up, especially tips on Tiller tools or templates that support this workflow, would be greatly appreciated.

[twalane]

Hi @josenydr1 did the guidance on “debt” and “transfer” type help at least with category definition as you continue to figure out how to implement this? Have you also moved closer to the decision of whether to have a separate cash account or to track all in one sheet?

[ctlee]

@josenydr1

real cash outflows such as bills, subscriptions, and credit card payments so I can more accurately forecast cash flow, avoid overdrafts,

So the tricky part of your statement is that unless you’re using an accounting system that is sending out cash/check for each bill, bills and subscriptions items themselves aren’t cash items, especially if you’re paying with debit or credit cards. it’s the transaction where the amount leaving your account that’s the actual account. but the complicated part of that is you’re going to be missing a lot of details in each trans.
But it might be as twalane said to have most item coded as transfers

[Cowboy13]

@josenydr1

I can relate to your comment…

I can more accurately forecast cash flow, avoid overdrafts, and gain better control of my finances

I created this template (Near Term Account Balance Forecast II (alternate to previously shared template)) to forecast my “cash” balance- which is anything out of my checking and savings accounts.

I do not keep a separate “cash” account as I hardly ever use cash. For the times I do withdrawal cash from my checking or savings account, I just split the transaction into the Dining Out and Shopping General categories as that’s what I usually spend it on- basically, it’s close enough.

If you have a lot of truly cash transactions (which I would think are when you spend cash from any withdrawals from your checking or savings accounts), I would categorize the withdrawal as a Transfer into your cash account and then itemize when you spend this cash. In this scenario, in the template I shared above, you would forecast the withdrawals which would then help you forecast your “cash” balance.

As for credit card transactions, I categorize all CC payments as transfers and categorize the individual charges against my budget. If you exclude CC charges, you will be missing a bunch of spending data.

Hope this helps, but let me know if you have any questions.

[pkrug539]

I guess personally, me and my wife mostly use our credit and debit cards or ACH electronic transfers and rarely use cash itself. When we do pull cash from the account or get cash, I have not been good so far about using manual transactions to track it. It’s been on my to-do list, but because it’s time consuming, I just haven’t gotten around to it. We don’t use cash a ton; mostly we use it for loose change offerings at church, the occasional garage sale purchase, or small personal purchases.

I do, however, use Tiller to track transactions in checking, savings, and credit card, which is where the vast majority of our transactions go through.

I have just sort of been accepting that cash purchases right now are sort of “off book,” because they’re small and paid for usually out of things like birthday or holiday money or the occasional small cash side gig. If we get any substantial amount of cash, we usually deposit it into savings so it can grow. (One of us may be better at doing this than the other.) There have been some times when my wife has gotten substantial cash and then put purchases that ostensibly use that cash on the credit card, and that’s been a problem that we’ve had to talk about. She got $400 in cash from her mom for some new wardrobe stuff and then promptly proceeded to spend more than that on some new dresses, and then didn’t deposit the cash, forgot that’s what she was supposed to use it for, and spent some of the cash. After that, I’ve been much more diligent about making sure that any cash income is either accounted for by depositing it right away or adding notes to Tiller about it and the monthly report that I draft so we’re paying attention to our finances.

Personally, I think the best way to track real cash outflows is to track everything, mortgage, car loan, all of that. Tiller to me is most valuable because it shows me exactly where my money is going; where it needs to go and where we want it to go. It makes our spending visible and holds us accountable to our budgets. I pay less attention to the automatic need-based spending like our mortgage, but I don’t want it excluded from my monthly analysis. I do check our monthly discretionary and semi-discretionary spending all the time and that’s where I focus a lot of my attention in the monthly reports I’m drafting up so there’s financial transparency with my wife.

If something weird came up in nondiscretionary spending, I’d want to know that as well. Last year for three months our mortgage company decided we didn’t have enough going into escrow and suddenly upped our mortgage payments by nearly $150 for a couple months and then reset that to a smaller amount in January. I didn’t see the email about it initially (it got shunted to a gmail side folder), so I didn’t know what was happening, I just saw our mortgage went up and flagged it. This also helped me flag when Amazon raised our music subscription price (one of the few streaming services we have left) without telling us. If I was excluding those from my cashflow information, I probably wouldn’t have spotted it.

I do exclude transfers in Tiller from those reports, such as credit card payments from checking.

I agree with Cowboy13’s idea in categorizing cash withdrawals as a transfer and then itemizing when you spend the cash with manual transactions. That’s probably the best way to see where your money is going so you can accurately forecast it in the future if it’s constantly recurring stuff. It would probably be easier with automatic data pulling to just use cash less and use electronic transactions more, but if you prefer to pay in cash for various reasons and still want to track it, that’s your best bet, I think.

[Cowboy13]

Agree with you @pkrug539.

My cash transactions are so small I don’t have a separate “cash” account; I just estimate where the cash goes when I w/d it.

As for “Off-the-books” I call it “Dad’s slush fund”! This gets funded by things like- cash I get from selling misc items locally, friend reimbursement when I pay for something for them, etc. Again, it’s a small % of my overall budget so I don’t spend the time tracking every penny. I use it for cash tips; but more importantly I will take my wife out for dinner with “my” slush fund. She loves that!

As for “tracking everything”, my one exception is my paycheck. I know some people itemize their paycheck so they know where every $ goes. I have never done this because it doesn’t change how I budget or my spending habits and I don’t want to spend the time on it. I simply categorize the amount deposited in my accounts (checking, HSA, 401k, etc.). I can always go into my company’s system and get summaries of how much I pay for insurance, tax, and other paycheck deductions.

Thanks.

[pkrug539]

I track our paychecks, but just have it categorized as paychecks. We get a little other income (high yield savings, tax returns, a few bucks here and there from things like Substack), and I find it’s good to differentiate it. Plus with my wife’s income (which is highly variable), we budget a certain amount that’s sort of a floor for her to bring in reliably and anything she earns over that goes to an unaccountable slush fund for her to spend however she wants.

[YouBet96]

Yeah, I record “ATM Withdrawals” as such and that’s pretty much the only cash transaction in our Transaction sheet. Of course, how that cash gets spent is totally random and not worth tracking, frankly. IOW, if we pull $100 I might carry that $100 around in my wallet for months before it actually gets spent. At this point, actual cash leaving my pocket is typically for valet, the rare tip, or very low value transactions at a gas station like a bottle of water.

Everything else is on CC and CC Statement Payments are our bulk cash payments that I make twice a month to pay our CC balance down to $0 to prevent interest accumulating.

[twalane]

Yes @YouBet96 ! If some of my notes could talk they’d ask why I took them out of a warm and cozy ATM if they’re not going to see any daylight!

[Cowboy13]

@YouBet96- That is identical to my cash situation.

The ironic thing is that I don’t seem to have cash when I actually need it- like to tip the baggage handler at the airport. My wonderful wife always has cash (not sure where it comes from ) and takes care of it.

[GregC]

The Net Worth template, found in the Tiller Money Feeds extension menu, displays the balance of each account or group of accounts over a range of weeks, months, quarters or years. This should show how your cash position is changing over time.

Whether I use a credit or debit account to pay for any given expense, the categories I’ve set up give me a clear picture of what I spend, and where. I use the Budget Plan created by @jpfieber to populate my budget based on these categories. I highly recommend this template.

I use the excellent Bill Payment Tracker contributed by @jono to stay on top of upcoming expenses. This template seems to capture almost every obligation I have, except for things like vacation travel, home renovations, and large occasional purchases.

Another helpful template is the Recurring Expense Template contributed by @adambecker, which can bring to my attention expenses I may have overlooked.

Since all transactions, regardless of account, can be categorized as expenses like groceries, clothing, etc, I don’t hide anything based on the account. I do hide accounts that have little or no activity, like a home equity line of credit that we keep for emergencies. If I was tracking an account like my kids’ custodial accounts, I might hide them or track them in a separate Tiller sheet.

I do hide some categories from reports when they don’t inform my understanding of day-to-day finances. Two examples are an insurance claim and the sale of a house. These are anomalies that occur rarely and while they must be documented, they don’t really shed any light on the household budget. I unhide them if/when I want to see the bigger picture.

I categorize payments toward credit card balances as transfers, since they do not change my net worth. I’ve budgeted for the underlying expenses, so to budget for the CC payments would be duplicative. If a CC payment included interest, I’d split that transaction to capture the interest expense. I can then track and budget for that interest if I choose.

Avoiding overdrafts is the only consideration you’ve mentioned that the above approach doesn’t really address. For this, I’ve created a small table on my Dashboard page that displays my current checking account balance. I’ll add to that table any big payments coming up that draw on that account (like paying the credit card bill, or estimated tax payments), with a due date or payment date, and the amount. I’ll calculate their impact on my bank balance in the approaching days or weeks. When the payment actually appears in my bank feed, I’ll delete it from the dashboard. With this, I can see at a glance when my balance will be low, and plan transfers or payment dates accordingly, without disrupting my budget categories.

Just one approach among many.

[GregC]

I have a category called ‘ATM and Cash"‘ which typically just includes the cash withdrawal with no further detail. However, if some of that cash is spent on something I wish to document, I’ll split the ATM transaction, and record the expense for that portion.

A case in point: We traveled to Cuba, where all transactions are in cash. No ATMs, no electronic payments, no credit or debit cards. Our guides suggested a per diem amount for expenses, and we arrived in Havana with a wad of cash, which appeared in Tiller as an ATM withdrawal. Each purchase, restaurant bill, or admission fee was split from the original ATM transaction, with a new description and the appropriate category. The notes field updated automatically to memorialize the original ATM withdrawal.

Along with a fuller accounting of our cashflow, this gave us a pretty detailed record of our trip, along with the names of the restaurants and attractions we visited, one of the great dividends of using Tiller.

The ability to split a transaction in the beta mobile interface would be really useful in this scenario.

[YouBet96]

Ha. Yes. Any ATM Cash Withdrawals are done by my wife. I probably haven’t pulled cash from an ATM in 5-6 years. So, on the rare occasion I need cash I ask my wife for it. She is my ATM.

[twalane]

living the dream! @YouBet96