how to categorize money in bank when starting with Quicken

yellowstone229

Disclaimer: I'm new to quicken and trying to figure out the best way to organize things. I've tried searching for answers but I haven't found any so let me know if I missed anything.

I'm running Quicken for windows through a subscription. I've gotten my bank accounts synced in, but I am not sure how to make quicken show how that money is earmarked. From what I understand, I can either use categories in my budget, or savings goals. What are some of the pros and cons for both options (and any other ones I'm missing)?

To categorize the money in the bank, I have tried creating a seperate budget for the first month, but the category balances for the next month are off. Any ideas how to fix that? Is there a better way to earmark the existing money in the bank?

Also, on a side note, is there a way to set a date range for a budget (aka a specific budget won't show up before a certain month and year)?

David Christopher

The Budget is a Report only. You do not transfer money to or from a budget. 
The answer to this sentence is:
""For items that will carry over for an extended time (say a year or more), such as property tax or homeowner's insurance), the easiest way is to transfer the money in Quicken from the budget to a savings goal""  NO. 

Let's start at beginning.  You have Income and you have expenses.  You deposit your income into the Bank (in Quicken you show the deposit in an Account that has a register.) So, look at the 1st attachment. The Left pane lists all your accounts, the right side shows the register for 1 of those accounts and there you enter your Income and record your "spending" with each line item in the register telling you who got paid (Payee) and what the money was spent for (category).  You can transfer money from one account to another. Such as from a Checking Account to a Savings or Investment Account.

In the Budget you tell Quicken you want to see what your income for a month plus Transfers in form other accounts is and what categories you spent it for. (You can make a budget for all your accounts together or just one of the, or just two of them)  

Savings goals are a "type" of account that do not have an associated Financial Institution holding your money.  They are "holding" accounts.  The money you transfer to them is still at the bank in the Account that you transferred the money from. You contribute so much each month to a Goal Account and when the bill is due, you transfer the money back to the Register it came from.  

Look at Savings Goal Register attachment to see an example of what a register for the goal looks like over time.

Now for the Budget set up. The screen you see in the Annual View of the Budget is to set up a budget.  You choose which accounts you want to see Income and Expenses (Categories) for.  The Income section tells you where the money comes from that is available to be spent for the month (your paychecks, and transfers from savings accounts or savings goals) (The total Income figure has nothing to do with taxable Income), it is just the total of funds available to spend during the budget month.)

The third attachment is the budget screen. I told Quicken I want to see all the income sources, all the expenses (Categories) I plan to spend for this month, and the money I sent to savings Goals. [Income + transfers in - category expenses - savings goal contributions = 0 is the goal of my budget.  One of my expenses is a transfer to savings that shows up in the Expense section.  I fill in all the Category expenses and Savings goal contributions and then budget what is left over into the To Savings line item. You see I missed my goal this month, Propane costs more than I planned for so I could did not have anything to send to savings account.  

For an expense line item such as Electric bill, I budget 84.00 a month. If I want to carry forward positive (spent less than 84 or negative (Spent more than 84) into the next month I turn on the Roll Over feature for that line item.  As the year goes by the roll over in a perfect world will be zero. If it is not zero at end of year, I adjust the monthly budgeted amount for the next year.  
Shot of Rollover feature


In your case, the Earmarks are Savings goals and the money stays in you bank account, but you tell Quicken you do not want to know it is in the bank available to spend.  When time comes to you need to spend it, you transfer it from the Savings Goal register back to the account that contributed and Quicken then reflects the money is no longer hidden and you can spend it.

David Christopher

"I am not sure how to make quicken show how that money is earmarked."

Savings Goal is the way to go with earmarked funds that will remain in the account but not be reflected as available to spend. Make the Goal in Planning>Savings Goal.
Next set up a Transfer Reminder in Bills and Income Tab for each Goal. 
The money will be in the account but it will not be reflected in the in the Balance Column of your register unless you right click on the Account Bar and select 'Show savings goal transactions in register'.
  
Your online balance after a reconciliation will reflect what is in bank and include the sum of your savings goals for that account.

I have never heard of using a category to earmark money, so no wonder your budget does not work. You can place your savings goals in the budget and they show up at bottom as an expense to the period income.  In the budget building portion select the savings goals you want to track in the "Select Categories to Budget" from the "Savings Goals" section.  

Later when whatever it is you saved for comes due, "In Categories to Budget for" on the 'Transfers In', choose the savings goal.  Then your normal income will be in Income section of Budget as well as the money from the savings goal.  Then Transfer the money required from the Savings goal account to the contributing register. 

""Also, on a side note, is there a way to set a date range for a budget (aka a specific budget won't show up before a certain month and year)?""

The budget in Quicken has an Annual View or a Monthly View.  Let's say you pay property tax once a year and have a savings goal for that. You transfer the money into the goal each month. When it is due, you transfer it back to your contributing account. On the budget for the month the tax is paid you budget for the withdrawal of the money from goal back to contributing account, then in the Income section you will have a line for From Property Tax and you fill in the budget column there for the amount you transferred.  Then in the expenses you have a line for the Property Tax category that you budget the same amount and when the bill is paid in register to Treasurer or whoever, and the difference line in all three of those will zero out. 

So I think that is what you are asking but not for an entire budget but for the Line items of a budget.   

I took three screenshots to give you a visual from my budget last May when I paid my Property Taxes for real. Income section, Expense Section, and Savings goal section.

yellowstone229

OK, so if I am understanding you correctly, for any budget line items that may have some leftover money in the positive or negative each month (such as restaurants or clothes), they can be handled by using the rollover feature in the budget.

For items that will carry over for an extended time (say a year or more), such as property tax or homeowner's insurance), the easiest way is to transfer the money in Quicken from the budget to a savings goal. The transfer would happen at the beginning of each budget cycle and would have to be done manually. And the savings goals are completely separate from the budget?

Then when the item is due, instead of transferring money out of the budget to a savings goal, the money from the savings goal will need to be transferred to the budget so the item can be paid.

Thank you for posting those pictures, they helped to make sense of how the savings goals works.


Now for the transfer to using Quicken. To clarify, before starting with Quicken I was using excel to track the amounts for each budget line item then had to keep a register to track what was in the bank, so Quicken removed a step.

To complicate things, my income and budget are a month off. Meaning my paychecks from September are for my October budget.

So for example (not real numbers, just examples), when I started using Quicken on September 1, my bank account had a balance of $10,000 in it. My monthly budget is $4,000. Leaving $6,000 for savings goals. But $500 of that $6,000 is rollover amounts for budget line items that get spent month to month (restaurants, clothes, gas, etc.).

Would transferring the whole $500 into savings goals then transferring it back to the budget line item work to make Quicken understand how to handle that money? Or am I trying to do something that Quicken is not designed/unable to do?

David Christopher

The Budget is a Report only. You do not transfer money to or from a budget. 
The answer to this sentence is:
""For items that will carry over for an extended time (say a year or more), such as property tax or homeowner's insurance), the easiest way is to transfer the money in Quicken from the budget to a savings goal""  NO. 

Let's start at beginning.  You have Income and you have expenses.  You deposit your income into the Bank (in Quicken you show the deposit in an Account that has a register.) So, look at the 1st attachment. The Left pane lists all your accounts, the right side shows the register for 1 of those accounts and there you enter your Income and record your "spending" with each line item in the register telling you who got paid (Payee) and what the money was spent for (category).  You can transfer money from one account to another. Such as from a Checking Account to a Savings or Investment Account.

In the Budget you tell Quicken you want to see what your income for a month plus Transfers in form other accounts is and what categories you spent it for. (You can make a budget for all your accounts together or just one of the, or just two of them)  

Savings goals are a "type" of account that do not have an associated Financial Institution holding your money.  They are "holding" accounts.  The money you transfer to them is still at the bank in the Account that you transferred the money from. You contribute so much each month to a Goal Account and when the bill is due, you transfer the money back to the Register it came from.  

Look at Savings Goal Register attachment to see an example of what a register for the goal looks like over time.

Now for the Budget set up. The screen you see in the Annual View of the Budget is to set up a budget.  You choose which accounts you want to see Income and Expenses (Categories) for.  The Income section tells you where the money comes from that is available to be spent for the month (your paychecks, and transfers from savings accounts or savings goals) (The total Income figure has nothing to do with taxable Income), it is just the total of funds available to spend during the budget month.)

The third attachment is the budget screen. I told Quicken I want to see all the income sources, all the expenses (Categories) I plan to spend for this month, and the money I sent to savings Goals. [Income + transfers in - category expenses - savings goal contributions = 0 is the goal of my budget.  One of my expenses is a transfer to savings that shows up in the Expense section.  I fill in all the Category expenses and Savings goal contributions and then budget what is left over into the To Savings line item. You see I missed my goal this month, Propane costs more than I planned for so I could did not have anything to send to savings account.  

For an expense line item such as Electric bill, I budget 84.00 a month. If I want to carry forward positive (spent less than 84 or negative (Spent more than 84) into the next month I turn on the Roll Over feature for that line item.  As the year goes by the roll over in a perfect world will be zero. If it is not zero at end of year, I adjust the monthly budgeted amount for the next year.  
Shot of Rollover feature


In your case, the Earmarks are Savings goals and the money stays in you bank account, but you tell Quicken you do not want to know it is in the bank available to spend.  When time comes to you need to spend it, you transfer it from the Savings Goal register back to the account that contributed and Quicken then reflects the money is no longer hidden and you can spend it.

yellowstone229

Thanks for the detailed explanation, I read through it a few times over these last few days and it explains well how the process works!