How useful is "cash in wallet"

Eric Beversluis econophil at
Sun Mar 19 11:35:51 EST 2006

[Sorry I didn't see the instructions re the need to "Reply All." I'm
used to lists where I just have to hit "Reply."
On Sun, 2006-03-19 at 07:14 -0800, Pete wrote:
> New gnucash user...
> It seems like there's really two broad class of
> accounts in gnucash:
> 1. Accounts I really care about, like my checking or
> savings account.  I want to reconcile these accounts
> and am keenly interested in what's inside of them.
> 2. Accounts that are really nothing more than place
> holders for the double entry system, like
> Expenses:Phone or Income:Salary.  I have no intention
> of reconciling my telco's books, and this account
> serves nothing more than to provide a place for my
> money to go.  Like an infinite sink.  Or an infinite
> source.  To really boil it down, these accounts serve
> as a glorified "description" field for where money
> goes or comes from in the accounts I really care
> about.
> So I'm curious about the "cash in wallet" account.  It
> seems rather granular.  Does anybody really keep track
> of the money in their wallet?  It seems pretty
> compulsive -- you'd need a "money found on the street"
>  or "money given by friend to help pay for french
> fries" account to reconcile it.
> Do people really reconcile this account?  Or is it
> mainly used as a placeholder account (type 2)?
> Also, suppose I'm going to lunch with some friends.  I
> go to the ATM and take out $20.  Walk to the
> restaurant and make my purchase.  How would this look
> *for most people* in gnucash?
> 1. $20 from Asset:Checking to Asset:Cash in wallet.
> 2. $20 from Asset:Cash In Wallet to Expense:Food.
> or
> 1. $20 from Asset:Checking to Asset:Cash in wallet.
> and leave it at that?
> I realize the _real_ answer to this question is
> "whatever suits your needs".  But I'm a basic average
> working Joe and would like to know what, nominally,
> other basic average Joes _tend_ to do.
> I've never used Quicken or gnucash before.  In fact,
> I've never really managed my money at all.  When my
> accounts look like they can handle my expenses, I
> bought stuff.  When they felt low, I saved money.
> I'd like to change all that, and gnucash is my first
> stab at this.
> Thanks,
> Pete

GnuCash is, in a way, overkill for what you want to do. I would suggest
setting up your own set of accounts--it's not that hard if you follow
the help. Identify which account you "care about" and set those up. Are
there any expense categories you want to track? If not, just use one
generic account for expenses. Instead of a "cash in wallet" type
account, just put any cash right into expenses--unless there's some
category of cash expenditures you want to track. Likewise with
income--do you need to track separate income streams? Otherwise just
have one generic income account--you can always indicate who its from on
the memo lines. Probably no need to track withholdings from your
paycheck etc unless you're really hyper-toilet-trained--which seems far
from the truth, given your letter. You'll need some sort of "opposite
side" acct for the amounts you start with--just put those into "Net
Worth." You can periodically adjust net worth for income and expenses or
just let those accounts keep track for you.If you study Reports, Assets
and Liabilities, Balance Sheet periodically you can see where you are
without worrying about transfers to Net Worth.

You don't need to reconcile all your accounts. I only ever reconcile my
checking and credit card accts.

Hope this helps.
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