New feature: Cash Accounts

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We’ve added a new feature today: cash accounts, one of our most requested features in the Make Wesabe Better group. It’s available on the site by clicking “New Account,” then clicking “Quick Start” and choosing a “cash” account. Of course, cash accounts are ideal for people like restaurant employees, who often receive most of their income in cash tips, but it can be great for other people, too.

One of the great pieces of received wisdom in the world of personal finance is to “watch out for the Latte Factor” (which, I had no idea until today, is actually a registered trademark of personal finance personality David Bach — zoinks, I thought it was just a cliché!). The basic idea of this maxim is that a lot of your money slips through your fingers in small purchases like lattes, and if you cut out the lattes, you’d be much better off.

It’s easy for me to see in Wesabe that this hasn’t proven true for my accounts (though others of Bach’s ideas have; he’s worth a read). I buy $20 gift cards from Peet’s Coffee once a month (they give you $1 free for each $20 card, and I reliably use up the cards, so it’s a good deal for me). That usually lasts me the whole month, since I will often make coffee at home instead of buying it in a store. About $10 in beans and $20 in store purchases a month adds up to $360 a year — less than most of my other discretionary categories. So far, it hasn’t proven true for Wesabeans in general, either — the ‘coffee’ tag has a monthly average of just $17.19 for everybody on the site.

I’m not, however, a latte drinker, and Wesabeans in general probably don’t buy all of their coffee on gift cards like I do. Since we haven’t had a way to track cash purchases, we haven’t really been able to put the latte factor to the test. If you’re concerned about this in your own finances, the cash account feature is for you. It’s a great way to keep track of the small purchases that do add up, whether for you they are lattes, magazines, cab or bus fares, or the like.

We’ve done it differently than other personal finance programs, however. One of the problems I’ve had with other programs is that they show a cash balance, as if it were just like a checking account, and expect you to track every single penny you spend through it. You’re supposed to have your ATM withdrawals be “transfers” into your cash account, and if you track every penny, the account balance they show will precisely match the amount in your pocket. That’s always been much more work than I’m willing to do — at the end of every month, I’d have to have one big “miscellaneous” fake-purchase to zero-out the balance. If I didn’t do that, my balance listing just went up and up, and made it look like I had hundreds of dollars in my wallet that I knew for a fact just weren’t there.

Instead, we’ve tried to make our cash accounts as lightweight as possible. You’re welcome to keep track of every penny if you want to, but for those of us who just want to track the expenses we think are problems, just enter those. We don’t show a running balance (if you want the balance, just open your wallet!) and if you forget or decide not to enter some expenses, no problem.

We’ve been working our way down the list of feature requests we hear the most. This coming week, we’re adding another feature that has been very much requested, and we’re thrilled about how it came out. Thanks again to everyone who lets us know what we can do better — your ideas and feedback are incredibly valuable. Keep it coming.

11 Responses to “New feature: Cash Accounts”

  1. David C-L Says:

    Thanks for trying to simplify things, but I think you’ve missed the point.

    If you don’t keep a running balance, and treat ATM transactions as transfers, it’s really easy to forget recording a transaction or three. Sure, I can look in my wallet to see how much cash I have– but that’s not the question I want Wesabe to answer. I want Wesabe to tell me where it went!

    I keep a cash account in Quicken, and like you say I have to enter a dummy transaction from time to time. But that’s not the problem– the problem is I don’t have web access to that balance.

  2. Elke Sisco Says:

    Yaayyy for cash accounts ! Thanks for adding these.

    But I’m with David C-L on this. Here’s how this works for me: I take $100 from the ATM, and then four days later, I wonder where it’s gone. I tend to pay for small transactions in cash – $3 for lunch at the cafeteria, coffee at the independent coffee shop that does not offer gift cards, a couple of stamps at the post office. Mostly, I suspect, it’s snacks and small food/drink purchases, and I would really love to track them.

    I do agree with you that it can be overkill to track every single penny, but David’s suggestion is a good one – you track what you can, and use a dummy transaction for what you’re missing. And like David, the thing I had really been hoping for was web access and automation: I get cash from the ATM, Wesabe moves the sum into my cash account, and I can track as much or as little as I like from there.

  3. Marc Hedlund Says:

    Thanks to both of you for the feedback. I’d love to hear what others think, too.

    There is a way to do what you’re asking right now, although it’s too manual. Here’s how:

    (1) On each of your ATM Withdrawals, tag the transaction as ‘cash atm’.
    (2) Each time you make an ATM Withdrawal, add a cash transaction for the same amount, marking it as ‘earned’, and tag it ‘cash’.

    Then use the cash account as you normally would. At the end of the month, compare your ‘atm’ tag spending to the ‘cash’ tag spending, and you’ll see the untracked charges.

    The reason why this works is that the ATM Withdrawal is a debit on the ‘cash’ tag, and the entry you make in (2) is a credit on the ‘cash’ tag. The two together cancel each other out. Your ‘atm’ tag will show the total amount you withdrew; the ‘cash’ tag will start at $0 after each withdrawal, and then grow as you add other cash transaction entries.

    That said, we were trying to make this simpler, not harder. 🙂 I think we could make the process above wholly automatic, and then show you your cash transactions so that you wouldn’t have to do the math/tagging described above yourself. Does that solve the issue?

    Thanks again for the responses.

  4. David C-L Says:

    Yes, if that process could be automatic it would work. I don’t mind having to tag the withdrawal as “cash atm” but I do mind having to enter it twice, and I don’t like the idea that I’d need to include the cash tag manually on every transaction in the Cash account.

    How about this: what if you associate a particular tag with a cash account? This would also allow for multiple cash accounts (think budget envelopes, or one for me and one for my spouse) per Wesabe user.

  5. Marc Hedlund Says:

    David — that’s a great idea. We’ll work on that. That would probably also work well for tracking transfers.

    Thanks much.

  6. Elke Sisco Says:

    Marc said:
    > (1) On each of your ATM Withdrawals, tag the transaction as ‘cash atm’.
    (2) Each time you make an ATM Withdrawal, add a cash transaction for the same amount, marking it as ‘earned’, and tag it ‘cash’.

    Exactly what I was planning to do … till you have it automated. 🙂

  7. Brad Says:

    I originally passed on using wesabe because it didn’t have basic checkbook features. I think a lot of people use those features and would love to see them on wesabe.

  8. Gates VP Says:

    Just got here from Scott Hanselman’s site, it’s great to see that this is now up and running. I can now consider moving stuff back to Wesabe.

    However that whole “miscellaneous” transaction is actually really important. You see, if I pay cash for something important to track (groceries, license renewal) then I’ll want to punch it in. However once a month or, usually around payday, I just use the Quicken “Update Balance” feature to update my cash balance. I count out what’s in my wallet and change jar, roll up some change and then punch in the new number and this gives me “entertainment” for the month.

    You see, I have the same goal here, I don’t want to track every penny, but at the end of the month I want to say “I’m down to 24.67, what did I spend on Entertainment?”

    If you’re one of those frugal people with a great sense of money, then you’ll probably know what you spend. But most people just grab cash and then spend it and then grab more cash and spend that. Having a cash acount with $300 in it and no cash on hand is actually a reminder that you’ve definitely been spending money somewhere. Without a cash balance, there’s this big hole in my financial picture, especially if some of the cash was used for good and some for evil 🙂

    The goal here is to help people with bad habits make good ones. Mindlessly withdrawing and spending cash is a popular “bad habit” so it’s probably worth making it visible.

  9. Brian Says:

    I just tried Wesabe today. Id like to see a balance for my cash account too. Some people have a great deal of cash around; sometimes more than they have in the bank. Many service people make more money in cash than they do in payroll. Not all of these people put it in the bank. Who wants a paper trail for cash money?

    Nobody can track the details (coffee money, snacks, transit etc…) but you can look at your wallet at the end of the day and determine that $50 is missing. Why not be able to have a balance that can be modified?

  10. Sergei Says:

    I signed up for wesabe over mint because I needed cash functionality, I would appreciate a balance for the account as well. I’m one of those that keeps a lot of cash on hand.

  11. Marc Hedlund Says:

    Hey, Sergei,

    Good news — we added cash account balances as an option. See for more details:

    https://www.wesabe.com/groups/3-make-wesabe-better/discussions/1320-cash-accounts-now-can-have-balances

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