Another way to track cash expenses

ATM withdrawalPhoto courtesy of me

People have very widely varying attitudes toward cash. While some people feel money more when they spend cash, other people don’t feel it at all. In fact, the way some people have explained it to me, if the transaction doesn’t hit their checking account, it feels ?like it never happened”. These people only feel money when it’s accompanied by a card.

While this is a little odd to me, I accept that people can have a difference of opinion of these topics. To me, using a debit card and paying cash aren’t that different. You’re still using money and you still need to track it.

And since I don’t recommend using apps or other services to do the tracking, it’s not much more work to log a purchase from cash versus a debit card. Okay, it’s slightly more work, in that there’s a record of the specific transaction in your checking account that you wouldn’t have if you used cash, but you can get a receipt in most cases.

So to be honest, I haven’t always known what to recommend for people in the “cash isn’t real” category.

But here is something I’ve recently come up with that I think could help in the expense tracking area. A way to make cash expenses as easy and ephemeral as some people feel they are.

Here’s an idea

Treat your ATM withdrawals as the expense, not your cash purchases.

Most people get cash either out of an ATM or as “cash back” on a debit card purchase. If you call it spent right then and there, you don’t need to track every small purchase if you don’t want to.

Take out $40? Write down that you spent $40 that day.


There are a number of benefits to this approach. It keeps the number of transactions down, as a $40 withdrawal might result in a half-dozen or so transactions at the point of sale. That creates more work for you, and I recognize that expense tracking is enough work as it is.

Also, this helps with the people who don’t feel like cash is real money. Now it doesn’t have to be. As far as expense tracking, you’ve already spent it. Now you don’t need to think about the cash, which is good, because you’re not thinking about it anyway.


This approach isn’t without its challenges though.

First, there’s the question of what category to use. In order for expense tracking to work, you need to categorize everything you spend. You could create a category called “ATM” and deal with it that way, but is that accurate? If you usually use cash for just eating out, what happens if you need cash for the bus one day?

There’s also the related issues of variability and predictability. Do you use the same amount of cash each month? Is it something you can predict in advance? Remember, our goal here is to make our money plans at the beginning on the month. Could you reasonably do that?

My take

For me, I think this approach works best with a single category. As an example, when I’m out of the country on a trip of some sort, I often use an “Adventure” category, where everything that I spend goes to that category. So an ATM withdrawal is just counted as money already spent for that category.

But aside from that, I don’t think I’ll use it. Which is fine, as I don’t mind tracking cash expenses. If you do, you may want to look into this.

Remember, you cannot get your finances in order if you don’t track your spending. There is no other way. So anything that gets you tracking your expenses more easily is a win for me. Feel free to try this.

But enough about me. How do you track cash?

Mike Pumphrey

Mike Pumphrey

I'm the founder and author of Unlikely Radical, a site to help people succeed with money, achieve their goals, and live intentionally.

I offer a free phone consultation to anyone who is interested in changing their financial narrative. Are you ready? Click here for details.
Mike Pumphrey
Posted on February 8, 2018