Budget Enhancement - Allow users to view, analyze, and interact with a yearly budget forecast

Scooterlam
Scooterlam SuperUser, Windows Beta Beta

QW 2017 R6 Premier (USA) here...

Now that we are 1/3 through 2017, a question I asked myself, “am I on-track or off-track” in my Quicken budget, given my past spending and future spend plan?  I kind of could eye-ball that I was doing okay at end March, but April came along and unplanned expenses blew that month out of the water. 
Now, with respect to where I may land at year-end, I'm not so sure....

 

Budget forecasting in particular is something I don’t really
see in Quicken.    While I can see my
actuals, budget and “what’s left” (image
1
), I cannot see a yearly forecast. 
That is,  a forecast based upon my
actual spending to date and my budget plan for the rest of the year-   “where will I end up at end of year and what
areas am I over/under spending”. 

 

It kind of sounds like what is reported in “what’s left,
right?  But, “what’s left” is not the
kind of forecast I am looking for in Quicken. 
What’s left is just the difference between budget and actuals,
regardless of timeframe.   Forecasts take in historical results (actuals),
timeframe, along with future predictions (budget).

  

What I do see in Quicken Budgets is an amalgamation of confusing
views (at least to me) around “to-date balances”, balance rollups and
roll-forwards, and the effects of these given whether rollover reserves were
used or not.    I’ve dug into these (as
have you!)  in an attempt to understand
them  and use them, but it seems like
every time I attempt to use this information (or think I understand how they
fit together), I have to educate myself all over again.  Understandable concepts on their own perhaps
but not so intuitive, clear, consistent, whatever you want to call it, when combined
and built into the budget tool.  As far
as the To Date balance thing goes, I just shut that off.


 A note about my perspective...I am really only focused on the expense budget side of things here but I am sure it would apply to income budgeting as well.  I don’t use income budgeting yet as the expense side gives me my numbers for my investment pulls each month (early retiree).


Getting back to basics, 
here are some thoughts and visuals around implementing budget forecasting
features into Quicken Budgets.   The
following images (1,2,4)  try to illustrate where one might see a “big picture” forecast
of where they may end up at End of Year. 
Along with that, some ideas on how to progressively discover or drill
down into the areas forecasted as over budget and those forecasted as under
budget.  Basically the “what” and the
“where”.  Lastly, there should be a
clever way (back to a big picture of the budget) to help you make budget
adjustments - take from one category and give to another sort of functionality
for example.  Unfortunately, I don’t have
a good visual to support this yet!

 

Additionally, I exported an Excel snippet of my actual budget from
Quicken.  I reorganized the export to
look like “annual view” and rebuilt all of the formulas in Excel and tested
this forecasting approach to see where things fell and if was actually useful
and how it might look and feel given my workflow.   See image
3.   The formula for forecast is basically: 


Forecast = Sum of actual costs to date + (Current Month Budget -Current Month Actuals) + Sum of remaining monthly budgets

 

Is there is another place in quicken where I can see this
kind of presentation of forecast?   Is there value in this basic presentation of
forecasting, for a non-business user?  Would
this confuse folks when thinking about “what’s left” v. forecast?  Is “what’s left” good enough as far as a
forecast?  Is it useful to be able to
visualize where you will end-up v. what you thought?  Would it help assess and move money around when
you do monthly or quarterly “latest estimates”? 
Just some questions that come to mind...

 

Have a look at  the
visuals.   If you like, vote it up.  If you don’t like, please do suggest
improvements or changes of direction!

Regards,

Scott

 

PS. Other than the spreadsheet in image 3, the numbers I added on the screengrabs are mocked up
for illustration....

Other budget enhancement idea here:  https://getsatisfaction.com/quickencommunity/topics/budget-enhancement-allow-drill-down-from-budget-bar-graph-to-transaction-list-for-past-months-spending

  

Image 1 –Graph View -
Yearly.
  Add End of Year Forecast Figure and
Category Group, Parent Category and perhaps subcategory forecasts

  image


Image 2 – Annual ViewBudget v Forecast -  Add new pull down view
called Budget v. Forecast.  Add End of
Year forecast figure. Modify table view to combine actuals and forecasts for
each month and for column (yearly) totals.

image

Image 3 – Spreadsheet export and example with real data.

image 


Other
views
-  where there is the Spending v. Budget (and
whats left) view, add forecast view to ensure consistency.

 image

2
2 votes

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Comments

  • mshiggins
    mshiggins SuperUser ✭✭✭✭✭
    edited May 2017
    Thanks for the detailed suggestion.



    Are you using the Rollover feature in your budget?
    Quicken user since Q1999. Currently using QW2017.
    Questions? Check out the  Quicken Windows FAQ list
  • Scooterlam
    Scooterlam SuperUser, Windows Beta Beta
    edited August 2018
    Hi, Thanks mshiggins.

    Yes, I do use rollover on about half of my budgeted categories.

    I did not account for rollover, as you can see, in the forecast formula.  

    But, upon thinking about it and what rollover is and used for....budgeted but unused monies that will be used in the current or future months....used to address timing and value unknowns in a specific category....

    While rollover reserves aren't "actuals" nor are they part of future monthly budget figures, they do represent planned spending (in the past) that have not yet been spent, for whatever reason.

    So perhaps they should be added to "actual cost to date" in the formula?  Does that make sense?

    Regards,

    Scott 
  • mshiggins
    mshiggins SuperUser ✭✭✭✭✭
    edited November 2019

    Hi, Thanks mshiggins.

    Yes, I do use rollover on about half of my budgeted categories.

    I did not account for rollover, as you can see, in the forecast formula.  

    But, upon thinking about it and what rollover is and used for....budgeted but unused monies that will be used in the current or future months....used to address timing and value unknowns in a specific category....

    While rollover reserves aren't "actuals" nor are they part of future monthly budget figures, they do represent planned spending (in the past) that have not yet been spent, for whatever reason.

    So perhaps they should be added to "actual cost to date" in the formula?  Does that make sense?

    Regards,

    Scott 

    As I recall, the rollover can be used for both underspend (positive) amounts and overspend (negative) amounts.


    The idea being that if you overspend for a month, the next month your budgeted amount is less, guiding you to spend less that month to make up for the overspend in the prior month.

    While it is not the forecast feature you are proposing, it is an already existing method that can be used to keep your budget on track.
    Quicken user since Q1999. Currently using QW2017.
    Questions? Check out the  Quicken Windows FAQ list
  • Unknown
    Unknown Member
    edited October 2018
    Well here are my general observations.  Note I have not drilled into all the calculations and such so I can certainly be wrong in my statements.

    First off I will address Quicken's number on the Graph view, as in the number on the top bar.  I have NEVER been able to figure out what they are calculating there.  I suspect it is just wrong.

    On the Balance to date (annual view, I basically only use the annual view), and the Summary for the year, there are known bugs in these that don't do the calculations correctly in all cases, especially if you use "parent rollups".  BUT it is clear enough of what they intended to calculate, and frankly it basically looks like your "forecast" calculation, except with extra parameters being possible.  BTW the main reason why it is clear of what to date balance should be, is because you have the same calculation in the Balance column.  The extra parameters are the rollovers, and the reminders.  BTW note that the rollovers have two options. One only transfers the positive amounts, and the other transfers both the positive and negative amounts.   Frankly I don't get the situation where you would only transfer the positive amounts.  The second choice makes much more sense.  It is basically an "averager".  As in you have a category that you know you will spend about $100 a month on, but it varies month to month.  By accumulating both the positive and negatives over a few months it should "about balance".

    Now in general about the future prediction based on a "busted month".  At a minimum, I would want this to be an option or maybe a toggle.

    In other words if you look at the tax planner, it has a similar problem with predicting the future.
    There are two possible situations.  One is that the person was in fact pretty bad at predicting their budget and they are basically constantly over or under their budget.  The other is a "busted month".  As in something unusual happened.  You do not expect it to repeat.

    These two different situations would most likely be handled completely differently.  I certainly wouldn't want the prediction of the future to be based on an average amount spent in that category for the last X months, if this is a one time event.  This the very reason that the tax planner has a choice between doing an average of the YTD transactions, or the scheduled reminders.

    Actual in an ideal world (but a complicated one, with most likely more
    bugs) you have a way to mark that month as "unusual" and not have it
    used in an average to predict the future, but use the other months
    averages to see if you are in fact constantly over or under your
    budget.  In the real world the way I would handle this to remove the one
    off event out of my budget, it would be coming out of my savings.  Certainly others would handle it differently.  But by removing it from the budget (and you could have more than one budget) you "averages"/balance go back to doing the prediction you want from them.

    You don't have the reminders turned on for your budget, or you have no reminders.  If you wanted the future balances to mean anything, they would have to be turned on, and they would have to be fairly "complete" in capturing your future spending.  In a way all they would be is a double check that your budget lines up with your scheduled reminders.
  • Unknown
    Unknown Member
    edited January 2018
    I would very much like to see a report giving a cumulative monthly view of the actuals to date as well as the forecast transactions though the end of the year. This would provide a tool to easily see where the year is headed and correct things before its too late. 
    Your feedback or suggestions to do this would be much appreciated.
  • Scooterlam
    Scooterlam SuperUser, Windows Beta Beta
    edited April 2020
    Revisting this budget forecasting idea from last year with an updated example to my original Image 1 in my first post.

    Again, the idea here is to not necessarily rely on the whats "left" figure to determine where I might end up at EoY, acutals v. budget.  But instead, add a forecasted EoY spend figure (See below image) to basically show where I will end up without any coarse corrections to future spending.... This forecasted figure uses existing data.

    Forecast Formula...

    Forecast = Sum of actual costs to date + (Current Month Budget - Current Month Actuals) + Sum of remaining monthly budgets

    In this new (real) example....using Quicken Budget "Annual View" summary bar....


    • Forecast (EoY) = $32 522 + ($ 3 680 - $ 289) + $ 3 325 + $ 2 465 + $ 2 370

    • Forecast (EoY) = $ 44 073

    • Budget (EoY) = $ 43 000

    • Delta from plan?  $ 1 073 over budget at EoY

    • Action?   Shave $1 073 from current budget over the next 4 months....
    Perhaps we can start there, with the big picture,  then progress to the more detail "discovery" features illustrated in the OP?

    Does this forecasted figure, alone or in combination with the whats "left" figure add value to those of you who use budgets?   It would to me. 

    Vote it up if you like it or suggest improvements to make the idea better!

    Scott
    2018 QW HBR R11.18










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