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Planning for a Big Purchase

DebtectomyDebtectomy Member ✭✭
I have several big purchases that I would like to prioritize and plan.  In no particular priority:
  • Fix a part of my house (not critical, but looks bad):  probably $2,000-3,000
  • Install a water feature for my pool:  probably around $10,000
  • Buy a particular music instrument:  About $2500
  • Buy a new laptop and other computer equipment:  About $5,000
  • Buy a second car without a note:  About $12,000 to $15,000
I need to prioritize and balance these things in the face of a fairly big loan that I would like to be able to pay off in 3 years, which would be 2 years sooner than making just my regular payments.

So now I guess this means that I'm ready to start using Quicken 2017's budgeting features.  :P  But in addition to that, does 2017 (or later) offer any big project/big purchase planning tools?
I have no affiliation with US Debt Clock.  But my country is handcuffed by debt.  It weakens us and it breaks my heart to see my taxes used to fund dumb, unnecessary, or rights-denying policies.

Comments

  • mshigginsmshiggins SuperUser ✭✭✭✭✭
    edited June 2018
    Have you looked at Savings Goals and the Debt Reduction Planner?
    Quicken user since Q1999. Currently using QW2017.
    Questions? Check out the  Quicken Windows FAQ list
  • markus1957markus1957 SuperUser ✭✭✭✭✭
    edited January 2019
    I like using Scheduled Transactions spent against my main cash flow account for these types of things. The Projected Balances graph when set to display the main cash flow account will then show how your cash flow behaves as the purchases and loan payments are made from the account. Scheduled Transactions are flexible enough to allow periodic payments for some purchases. Dates can be changed so that cash flow stays level. As you add each item and divert cash from other places to pay for it, it will begin to prioritize and schedule itself. It does require you to accommodate your day to day expenses in Projected Balances to a level of detail accurate enough to be realistic.

    A budget might also work, but would require a special Category for each item. It's going to get harder to look out 2 to 3 years in a budget compared to the Projected Balances module which can be customized to look out any number of years.
  • DebtectomyDebtectomy Member ✭✭
    edited June 2018
    mshiggins said:

    Have you looked at Savings Goals and the Debt Reduction Planner?

    Not yet.  But I will!  Thank you...
    I have no affiliation with US Debt Clock.  But my country is handcuffed by debt.  It weakens us and it breaks my heart to see my taxes used to fund dumb, unnecessary, or rights-denying policies.
  • DebtectomyDebtectomy Member ✭✭
    edited June 2018
    This is intriguing.  I will see if I can work through what you've suggested.  Thank you for taking the time!
    I have no affiliation with US Debt Clock.  But my country is handcuffed by debt.  It weakens us and it breaks my heart to see my taxes used to fund dumb, unnecessary, or rights-denying policies.
  • DebtectomyDebtectomy Member ✭✭
    edited June 2018
    Update: 

    I am pretty sure that whatever I do, it will be easier if I have at least done some work organizing my categories.  So I have started going through my register, which is more complicated than I had expected, even though it only goes back to October 2017. 


    I probably have a couple more hours to do on that, but already I have a much better picture of where my money is going and I can see a couple areas where I can make an immediate improvement.

    Once the categories have reached a state of what I call "preponderance of usefulness", I'll play with the tools to get an idea of how will they might work for me.  I'll also take a look at MarkUS's suggestion above.  Stay tuned!
    I have no affiliation with US Debt Clock.  But my country is handcuffed by debt.  It weakens us and it breaks my heart to see my taxes used to fund dumb, unnecessary, or rights-denying policies.
  • DebtectomyDebtectomy Member ✭✭
    edited June 2018

    I like using Scheduled Transactions spent against my main cash flow account for these types of things. The Projected Balances graph when set to display the main cash flow account will then show how your cash flow behaves as the purchases and loan payments are made from the account. Scheduled Transactions are flexible enough to allow periodic payments for some purchases. Dates can be changed so that cash flow stays level. As you add each item and divert cash from other places to pay for it, it will begin to prioritize and schedule itself. It does require you to accommodate your day to day expenses in Projected Balances to a level of detail accurate enough to be realistic.

    A budget might also work, but would require a special Category for each item. It's going to get harder to look out 2 to 3 years in a budget compared to the Projected Balances module which can be customized to look out any number of years.

    Hello again Markus:
    After reviewing your post, I think I'm not getting it.  I can't figure out how to even get started on using scheduled transactions in this manner.
    How to start?
    I have no affiliation with US Debt Clock.  But my country is handcuffed by debt.  It weakens us and it breaks my heart to see my taxes used to fund dumb, unnecessary, or rights-denying policies.
  • DebtectomyDebtectomy Member ✭✭
    edited June 2018
    Update:
    I have been wrangling the categories and trying to use the budget model.  Mixed success, but that's only due to limited time spent so far.  I feel optimistic that eventually this will be super-useful for me.

    I also tried the Planning/Savings Goals feature.  I set up a goal and told it which account I was going to use, then "made a contribution".  I didn't make a "payment", mind you.  But now that account has a zero balance, which is 100% confusing to me. 

    I may not be able to use this feature because I need to be able to see my actual account balance (it's an actual account with a financial institution).  That account will serve dual functions:  It will be my emergency fund account AND my account for accumulating the cash for that big purchase.
    If it shows zero all the time, then it looks like I have nothing available for emergencies.  And it will be impossible to reconcile it with my monthly statement.
    I have no affiliation with US Debt Clock.  But my country is handcuffed by debt.  It weakens us and it breaks my heart to see my taxes used to fund dumb, unnecessary, or rights-denying policies.
  • markus1957markus1957 SuperUser ✭✭✭✭✭
    edited June 2018

    I like using Scheduled Transactions spent against my main cash flow account for these types of things. The Projected Balances graph when set to display the main cash flow account will then show how your cash flow behaves as the purchases and loan payments are made from the account. Scheduled Transactions are flexible enough to allow periodic payments for some purchases. Dates can be changed so that cash flow stays level. As you add each item and divert cash from other places to pay for it, it will begin to prioritize and schedule itself. It does require you to accommodate your day to day expenses in Projected Balances to a level of detail accurate enough to be realistic.

    A budget might also work, but would require a special Category for each item. It's going to get harder to look out 2 to 3 years in a budget compared to the Projected Balances module which can be customized to look out any number of years.

    You listed 5 purchases/payments in the bullets above and a desire to pay back a loan early. Start there. Create a Bill & Income Reminder for each of those items with a date(s) far out in the future; pay for the items from the account you mention below. A reminder can be set up as a series of payments for larger ticket items.

    Set your Projected Balance graph to show only the payment account and for a custom period several years out. Start changing the dates on the bullet item reminders to see how they impact your balance on the payment account. You will then need to add a transfer reminder to add cash into the payment account from another Quicken account in order to maintain positive cash flow.

    It should start to become intuitive from there. At the end of the day you will have a complete cash flow projection based on real values in your accounts and desired purchases scheduled in the future.
  • Tom YoungTom Young SuperUser ✭✭✭✭✭
    edited June 2018
    The idea behind "Savings Goals" is a little far-fetched in my opinion.  The idea is to somehow "trick" you into thinking you somehow have less money than you really have, presumably to limit your spending on "discretionary" items, so that you are building up "hidden" money for longer range goals.

    So, for example, if I have a checking Account with $2,000 in it, then set up a Savings Goal called "New Car"  and transfer $1,500 from the checking Account to the Savings Goal, (which is actually another "Account" in Quicken that you created by setting up the Savings Goal in the first place), then on the Account Bar, (that list of Quicken Accounts to the left or right of the screen), will show that checking Account with a balance of $500 and down at the bottom of the Account Bar in a section titled "Savings Goals" the Saving Goal - "New Car" - will show a balance of $1,500.

    You can right click that Savings Goal and toggle the "Show savings goal transactions in register and reports" feature on and off.  If the feature is "off" then the Account Bar will show the true balance of the checking Account, ($2,000), and the New Car savings goal Account will show $1,500 in an italicized font.

    One nice feature of Savings Goals is that when you go to reconcile that checking Account Quicken will automatically exclude any Savings Goal transactions out of the Account, making the balance of the Account the "real" balance allowing you to reconcile.

    I applaud your effort to go back through your spending history and categorizing that information into meaningful Categories; that's really the first and best step to take if you want to analyze your spending and determine where you might throttle back some of that spending in favor of longer term goals. 

    Whether the use of Savings Goals is useful is up to you.  You know that over the next few years you're going to have to accumulate some $X amount - your planned spending plus some additional loan payments - so more than anything else you "simply" need to spend less than you make over that time frame if that $X amount.  It really comes down to self discipline.
  • DebtectomyDebtectomy Member ✭✭
    edited June 2018

    I like using Scheduled Transactions spent against my main cash flow account for these types of things. The Projected Balances graph when set to display the main cash flow account will then show how your cash flow behaves as the purchases and loan payments are made from the account. Scheduled Transactions are flexible enough to allow periodic payments for some purchases. Dates can be changed so that cash flow stays level. As you add each item and divert cash from other places to pay for it, it will begin to prioritize and schedule itself. It does require you to accommodate your day to day expenses in Projected Balances to a level of detail accurate enough to be realistic.

    A budget might also work, but would require a special Category for each item. It's going to get harder to look out 2 to 3 years in a budget compared to the Projected Balances module which can be customized to look out any number of years.

    Okay, I see now how I got confused.  I didn't explain a key fact of my situation.  The loan is one of those 401K types of loans that is paid back by salary deductions until the balance is paid off in its entirety.  I can also pay off the entire remaining balance at any time. 

    Unfortunately, I cannot submit "extra payments" like you can for most mortgage, car, or other loans.  I think most 401k loans of this type don't offer extra payments.

    So in order to pay it off early, I must accumulate cash while also having those loan payments deducted from my pay, with the intention of meeting somewhere in the middle with a big payout of the remaining balance. 

    Paying off early lowers my risk (of having a 401k loan in the first place) and essentially nets me an immediate pay raise when the payroll deductions stop.  The sooner I can do that, the better.

    I've determined what I can save on a monthly basis, and I have left a buffer for emergencies.  As cash accumulates in that account, it will earn a small amount of interest, but more importantly, the cash will be available for planned projects (the original premise of this thread) and emergencies.

    If I have done my math correctly, sometime 20-24 months from now, I should be able to send a big check to my 401k administrator and pay off the remaining balance of the loan.  Depending, of course, on how much those big projects end up costing, which ones get delayed, and the aforementioned emergencies, which are, of course, not yet known in frequency or impact.
    So all that to tell you why I can't make payments on that loan until I pay the whole thing off.  Not sure how I can use your method in light of that.
    I have no affiliation with US Debt Clock.  But my country is handcuffed by debt.  It weakens us and it breaks my heart to see my taxes used to fund dumb, unnecessary, or rights-denying policies.
  • NotACPANotACPA SuperUser ✭✭✭✭✭
    edited October 2018
    re: Income & Expense categories.  When I was setting mine up, many years ago, one idea source that I used was my latest tax returns.  From them, I could see what tax items I needed to track, so that come tax time, Q had already done most of the "data collection" portion for me.

    From that base of categories, I looked over my reports to determine what I was actually using. A non-tax category that only had 1 or 2 transactions in it (over a year) probably didn't need to be a category.

    And then there's sub-cats.  The IRS want to know the specific charity that we donated to ...  so I've got sub-categories for each of them.  Again, letting Q do the data collection.
      
    Hope that helps you in your planning.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • DebtectomyDebtectomy Member ✭✭
    edited June 2018
    Tom Young said:

    The idea behind "Savings Goals" is a little far-fetched in my opinion.  The idea is to somehow "trick" you into thinking you somehow have less money than you really have, presumably to limit your spending on "discretionary" items, so that you are building up "hidden" money for longer range goals.

    So, for example, if I have a checking Account with $2,000 in it, then set up a Savings Goal called "New Car"  and transfer $1,500 from the checking Account to the Savings Goal, (which is actually another "Account" in Quicken that you created by setting up the Savings Goal in the first place), then on the Account Bar, (that list of Quicken Accounts to the left or right of the screen), will show that checking Account with a balance of $500 and down at the bottom of the Account Bar in a section titled "Savings Goals" the Saving Goal - "New Car" - will show a balance of $1,500.

    You can right click that Savings Goal and toggle the "Show savings goal transactions in register and reports" feature on and off.  If the feature is "off" then the Account Bar will show the true balance of the checking Account, ($2,000), and the New Car savings goal Account will show $1,500 in an italicized font.

    One nice feature of Savings Goals is that when you go to reconcile that checking Account Quicken will automatically exclude any Savings Goal transactions out of the Account, making the balance of the Account the "real" balance allowing you to reconcile.

    I applaud your effort to go back through your spending history and categorizing that information into meaningful Categories; that's really the first and best step to take if you want to analyze your spending and determine where you might throttle back some of that spending in favor of longer term goals. 

    Whether the use of Savings Goals is useful is up to you.  You know that over the next few years you're going to have to accumulate some $X amount - your planned spending plus some additional loan payments - so more than anything else you "simply" need to spend less than you make over that time frame if that $X amount.  It really comes down to self discipline.

    Oh, thanks for that. 

    I don't really like the idea of "hiding" the numbers from my left-brain.  It's too much like what some people do when they overpay their tax witholdings or set their house clocks 20 minutes fast because they think the only way they'll ever be on time for anything is to get the bejesus scared out of them. 

    That's not me, but you say that I can switch them off for reconciling and reporting, so maybe I'll try it.
    I have no affiliation with US Debt Clock.  But my country is handcuffed by debt.  It weakens us and it breaks my heart to see my taxes used to fund dumb, unnecessary, or rights-denying policies.
  • DebtectomyDebtectomy Member ✭✭
    edited June 2018

    re: Income & Expense categories.  When I was setting mine up, many years ago, one idea source that I used was my latest tax returns.  From them, I could see what tax items I needed to track, so that come tax time, Q had already done most of the "data collection" portion for me.

    From that base of categories, I looked over my reports to determine what I was actually using. A non-tax category that only had 1 or 2 transactions in it (over a year) probably didn't need to be a category.

    And then there's sub-cats.  The IRS want to know the specific charity that we donated to ...  so I've got sub-categories for each of them.  Again, letting Q do the data collection.
      
    Hope that helps you in your planning.

    I am so glad I've been spending quality time on the categorizations these last few weeks. I agree, having only 1 or 2 transactions in a category makes no sense. Often, I find that with some little bit of thought, I'll figure out another category to which these can easily go, making for use of fewer (but more statistically significant) categories throughout my accounts. My tax situation is very easy right now. House and uncomplicated income sources, and usually only 1 or 2 charities. Very easy to track.



    But even so, it's still important to make effective use of categories, especially if I really want to know what I'm spending my money on.
    I have no affiliation with US Debt Clock.  But my country is handcuffed by debt.  It weakens us and it breaks my heart to see my taxes used to fund dumb, unnecessary, or rights-denying policies.
  • markus1957markus1957 SuperUser ✭✭✭✭✭
    edited June 2018

    I like using Scheduled Transactions spent against my main cash flow account for these types of things. The Projected Balances graph when set to display the main cash flow account will then show how your cash flow behaves as the purchases and loan payments are made from the account. Scheduled Transactions are flexible enough to allow periodic payments for some purchases. Dates can be changed so that cash flow stays level. As you add each item and divert cash from other places to pay for it, it will begin to prioritize and schedule itself. It does require you to accommodate your day to day expenses in Projected Balances to a level of detail accurate enough to be realistic.

    A budget might also work, but would require a special Category for each item. It's going to get harder to look out 2 to 3 years in a budget compared to the Projected Balances module which can be customized to look out any number of years.

    If you just follow the logic you set out in your explanation and apply it in Quicken using scheduled transactions, it will work. Your projected cash flow will either show you have made your bullet point purchases and still have a sufficient balance in the account to pay off the 401k or it will show you are short and need to delay a purchase or increase an income stream.
  • markus1957markus1957 SuperUser ✭✭✭✭✭
    edited June 2018

    I like using Scheduled Transactions spent against my main cash flow account for these types of things. The Projected Balances graph when set to display the main cash flow account will then show how your cash flow behaves as the purchases and loan payments are made from the account. Scheduled Transactions are flexible enough to allow periodic payments for some purchases. Dates can be changed so that cash flow stays level. As you add each item and divert cash from other places to pay for it, it will begin to prioritize and schedule itself. It does require you to accommodate your day to day expenses in Projected Balances to a level of detail accurate enough to be realistic.

    A budget might also work, but would require a special Category for each item. It's going to get harder to look out 2 to 3 years in a budget compared to the Projected Balances module which can be customized to look out any number of years.

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