How to split a group trip when someone pays cash
Record who paid, the amount in the local currency and that it was cash. Convert it at the payer’s own average exchange rate, which is everything they handed over divided by everything they received, not the market rate. Then split it like any other expense.
Why cash needs its own rule
A card payment comes with a statement that tells you exactly what it cost. Cash does not. Someone changed money, probably in more than one go and at different rates, and then spent it over several days. If the group converts that cash at the market rate, the person who paid ends up slightly out of pocket, because changing money always costs a spread or a fee.
The method
- Each person who spends cash notes every exchange they make: how much they handed over and how much foreign currency they got.
- Each cash expense is recorded in the local currency, with who paid and who shared it.
- Each person’s average rate is their total handed over divided by their total received.
- Every cash expense is converted at its payer’s average rate, once, then split.
A worked example
Four friends in Tokyo, settling in USD. Mia is the one carrying cash.
Exchange 1. Mia changes $300 and gets ¥45,000.
Exchange 2. A few days later she changes $200 more and gets ¥28,000.
Her average rate. She handed over $500 and received ¥73,000, so one yen cost her 500 ÷ 73,000 = $0.006849.
Ramen dinner, ¥12,000 in cash, shared by all four. The cost is 12,000 × 500 ÷ 73,000 = $82.19.
Split four ways, $82.19 is 8,219 cents, which is 2,054 each with 3 cents left over. The three leftover cents go to the first three people in order, so the shares are $20.55, $20.55, $20.55 and $20.54. They add up to exactly $82.19. Mia paid for the dinner, so her three friends each owe her their share, and the transfers at the end take care of it along with everything else.
Common ways to get cash wrong
- Using the market rate. The payer absorbs the cost of changing the money.
- Using the first exchange’s rate for everything. If you changed money more than once at different rates, the average is the honest number.
- Forgetting who changed the money. Cash spent by someone else is converted at their rate, not yours.
How Trip Split does this
In the exchange record you add each time you change money. When you add a cash expense, choose Cash as how it was paid. Trip Split then converts it at your own average rate for that currency, and each person’s cash is converted at their own rate. If there is no exchange record yet, it falls back to the day’s market rate and marks the expense as estimated, then recalculates once you add the exchange. You can see the working in how to split trip costs in different currencies.
Common questions
What if I did not keep track of how much I changed?
Use the day’s market rate as an estimate and mark the expense as estimated. When you remember or find the exchange receipt, record the exchange and the cash expenses are recalculated at your own rate.
Does the person who paid cash need to be the one who changed the money?
In Trip Split each person’s cash spending is converted at that person’s own average rate, because it is their money that was changed. Someone who paid with another person’s cash should note it as a repayment instead.
Why not just use the market rate for cash?
Because it is not what you paid. Changing money costs a spread or a fee, so the market rate understates the real cost, and the person who paid cash ends up out of pocket.
Do tips paid in cash need special handling?
No. A tip belongs to the expense it was part of and is split the same way as that expense.
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