How useful is "cash in wallet"

Bill Wohler wohler at
Thu Mar 23 16:43:46 EST 2006

Pete <null_geodesic at> writes:

> 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

Using Gnucash, I have caught errors in my salary statements, credit
card accounts, and various other bills. But if not tracking these
things is working for you today, there is no need to use Gnucash. If
not tracking these things is NOT working for you, then read on.

> 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"

Depends on how much you find ;-).

>  or "money given by friend to help pay for french
> fries" account to reconcile it.


> Do people really reconcile this account?

I do, but it's not really necessary. I use it to help me add a
balancing item every so often and review my expenditures over the past
few weeks.

> 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.

Expense:Dining, actually. I have a separate Expense:Groceries.

> I realize the _real_ answer to this question is
> "whatever suits your needs".  

You hit the nail on the head. 

> But I'm a basic average
> working Joe and would like to know what, nominally,
> other basic average Joes _tend_ to do.

I have separate accounts for each of the line items in my paycheck. I
have separate accounts for each of my credit cards, utilities, and
other creditors. I have separate expense accounts for auto (with
sub-accounts for the car (parts and service sub-accounts), fuel, and
insurance), telephone, computer (hardware and software sub-accounts),
groceries, dining, entertainment, recreation (with sub-accounts for
the recurring significant categories), and so on.

One way to create accounts is to start with really big buckets and
then start adding more accounts or sub-accounts as you feel necessary.

I tend to itemize in my Assets:Liquid:Cash account (I renamed my "cash
in wallet" account) if I have a receipt, or if the expenditure was
large enough to be noticeable. I don't worry about a few bucks for tip
here and there, but I would itemize a $20 cab ride (to
Expenses:Transportation or Assets:Accounts Receivable:Newt Software if
on business).

I have an Expense:Misc category that I use for miscellaneous
expenditures including the occasional Assets:Liquid:Cash balancing
item. Like Liz, mine is about 10% over the past year and the 10th
highest category. I'm pretty comfortable with that level. Any lower
and I'm being too compulsive; any higher and I'm being sloppy.

> 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.

You might like it for budgeting (although there isn't yet a budgeting
function) and to see how you spend your money (you might be
surprised). You might start catching errors and like that, too. You
might also like it for tracking you and your roommate's shared
expenses more easily.

But best of all, for me, is the reference it serves. While doing my
taxes, I was able to get a quick record of the expenses in various
categories to fill in various items in my tax forms. This year, I
actually found an item for which I didn't have a receipt and would
have missed out on the deduction. (Think about your taxes when
creating accounts.) I was able to quickly find out when I bought my
phone to see if it fell within the warranty.

Bill Wohler <wohler at>  GnuPG ID:610BD9AD
Maintainer of FAQ and MH-E. Vote Libertarian!
If you're passed on the right, you're in the wrong lane.

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