Debt Accounts Zero Out Category Reports

Question

What is the proper way to do this?: 
 I pay my mortgage - so in my checking account the transactions is labeled as "Mortgage".
 I also have my mortgage account under "Debts".  I want to match the transactions, so I only need to record 1 transactions.  By matching the transaction, the mortgage account also shows a transaction with category "Mortgage".

Here's the problem: 
 Checking Account = "Mortgage" w/  -$$
 Mortgage Account = "Mortgage" w/ +$$

In reports, the -$$ + $$ = $0.00 so it's not accurately reporting (or budgeting) how much I spend on my mortgage each month.

Is there any way to record this accurately, while keeping the matched transactions??  Or if not, what are best practices for recording this??

jacobs · Accepted Answer

It's currently a limitation of Quicken Mac that you cannot budget for cash flow transfer; the budget part of the program only allows income or expenses, and the portion of your loan payment that repays principal is either -- it's a transfer from an asset to a liability. Being able to budget cash flows (transfers) is one of the top user requests here on this forum, and the product manager has said they're working on addressing it somewhere down the road -- we just don't know when that will be.

In reports, the Category Summary report has a section at the very bottom listing Other Transactions > Transfers Between Accounts. It's not very satisfying, because it's not part of your money In/Money Out, but it's a way of getting these transfer to show up in a report at the current time. Category Summary is an old report and will probably go away sometime in the future, and it has some other known problems, so I don't really recommend using it if you don't need to.

There is a way to show it in one of the modern reports (built from one of the Create… options on the Reports menu) which is a little tricky, but works. It's a little convoluted to set up, because you're basically forcing Quicken to show an expense that's not really an expense from an accounting standpoint, but feels like an expense to you from a cash flow standpoint.

The key to this trick is that Quicken Mac has a quirk that allows a transaction to have both be a Transfer and have a Category. (This wasn't allowed in legacy versions of Quicken Mac or in Quicken Windows, to the best of my knowledge.) Make the Transfer column visible in your register, if it isn't already. And you'll need to create a custom expense category called "Loan Principle Payment" or whatever you want it to be.

Now, open one of your loan transactions and you'll see the Transfer column showing the transfer -- or in the case of a loan payment, it typically is a split, because part of the payment is loan principal and part is mortgage interest. Here's where it gets tricky. If you click on the split line for the transfer and edit the category to be your "Loan Principle Payment", the Transfer disappears. But before you do anything more, click in the Transfer field of the split, and select the loan account that had been there -- so that now your split line has both a category and a Transfer. Save the transaction.

Now, when you run a Transaction Report or Summary Report, your special category will show up. Yay! But the amount is zero. Boo! Why? Because if you've included all accounts, the two sides of the Transfer transaction are cancelling each other out. So you need to do one more thing: Customize the report, and in the Accounts tab, deselect the Loan account. When you click OK to close Customize, your report will now show your "expense" of "Loan Principle Payment".

Again, we expect Quicken Mac will have some easier mechanism to do this in the future, but if you want show this as an expense currently, that's a way to do it.