How do you handle the random Cash Purchases in a Budget?

When working with a budget (as well as planned bills) for items like Gasoline Purchases or Dining Out, how do you handle the occasional cash purchase?

This kind of thing happens to me occasionally because of our Cell Phone plan... there are three people on it, and the third person will sometimes reimburse me with cash. Rather than depositing that cash into the checking account, I spend it on either gas or dining out.

Before using budgets, that wasn't big deal. But now that I'm trying to establish a budget for long term planning... this scenario is tripping me up.

This happened the other day for when I filled up my wife's car. I paid cash, and in the Bills & Income automatic entry I entered the actual purchase ($31.00) in the category of "Auto:Fuel:Malibu" because that is what was planned and budgeted, and to offset it I entered into a new category of "Paid Cash" the negative value of (-$31.00). I had thought that was the right thing to do to show that the actual purchase did take place, but now in my Budgets I'm showing an unplanned expense in the "Paid Cash" category in a negative amount.

So, how should I have handled it?

Best Answer

Answers

  • Frankx
    Frankx SuperUser ✭✭✭✭✭
    Hi again, "@TXShooter",

    Assuming you got the "cash" from the scenario you described - i.e. your son gave you the cash to pay for his share of the cell phone bill for the month - then you actually should have used the "cell phone" category because by reimbursing you for his part of the bill, that expense to you (and your budget for cell phone) was reduced.

    Hopefully that makes sense, but if you have any follow-ups, let me know.

    Frankx


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  • TXShooter
    TXShooter Member ✭✭✭
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  • TXShooter
    TXShooter Member ✭✭✭
    Not sure what happened to my two previous comments.

    I ended up doing the Cash Account transfer idea. It sees to fit best into all situations.

    Thanks guys!
  • JustMeHere
    JustMeHere Member ✭✭✭✭
    TXShooter said:
    Not sure what happened to my two previous comments.


    Sometimes for whatever reason the "forum" decides that certain comments need to be run past the moderators.  They usually show up later when the moderators get to them.
    Using Quicken Subscription Premier (and have a copy of Starter to test things on)
  • TXShooter
    TXShooter Member ✭✭✭
    Frankx said:
    Hi again, "@TXShooter",

    Assuming you got the "cash" from the scenario you described - i.e. your son gave you the cash to pay for his share of the cell phone bill for the month - then you actually should have used the "cell phone" category because by reimbursing you for his part of the bill, that expense to you (and your budget for cell phone) was reduced.

    Hopefully that makes sense, but if you have any follow-ups, let me know.

    Frankx

    Frank,
    After posting, I had a thought. What if I created a Cash account in Quicken, and transferred the money around that way? Wouldn't that be a better way to show that the bill was reimbursed, and the gas was till purchased, but still be traceable for other tax deductible items such as charity and offerings? Just a thought.

    TXShooter
  • TXShooter
    TXShooter Member ✭✭✭
    UKR said:
    Another thing ...
    Do you have a "Cash" account to use for any cash income or expense transactions instead of split category "Paid Cash"?
    Record your cash spending transactions in the new Cash account, properly categorized to your expense categories.
    When you withdraw cash from your checking account, to reload your wallet, record it as a transfer from Checking to Cash.
    Once in a while count the money in your wallet and "Adjust balance" in your Cash account to make a Misc. Cash Expenses transaction for everything you spent without recording it individually (like the money you put in the tip jar in the restaurant or the coffee contribution in the office)

    (I don't know what happened to my response to @Frankx)

    That's exactly what I ended up doing. I had a thought after my posting to look into doing just that, @UKR, and that seems to fit my situation the best.
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