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Track mortgage budget that is on separate account

JohnyBeGood

Hello all,

We have separate account that mortgage company automatically takes money every month out of. From every paycheck we transfer money to that account so it has enough to cover $1,500 payment. How do I include that into my monthly budget since there are multiple transfers from checking to that separate account?

Thanks!

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Accepted answers

Bob_L

I think it is up to you, but I would think most folks would budget the true expenses (and they would probably have the payments coming out of their checking account where presumably the needed money resides), rather than the transfers. However if monitoring those transfers as if they were expenses is the way you are comfortable managing then it is perfectly acceptable.

An example of budgeting transfers on the income side is the fact that many folks budget Required Minimum distribution transfers out of their IRAs into a checking account as income, even though it is a transfer. The point is that is how they want to manage.

All comments

Valderi

Making transfers between accounts is not spending money...
You will choose a category for your budget only with the last transaction for your bank.

JohnyBeGood

Thanks for the reply!
If I understood you correctly, I would need to wait for payment to be cleared and then choose category ie. mortgage for that specific transaction?

Bob_L

Actually you can budget transfers if you want to do that. Check out the budget categories link on the budget page and you will see them there. In your case, select transfers out and then pick that mortgage holding account as the “To account”.

NotACPA

Why isn't that "separate account" included in your budget ... since it's the account that holds the mortgage expense?

JohnyBeGood

Thanks guys for the replies! I'm still new to this and trying to understand....
This is how I have it setup:

image.png

JohnyBeGood

And on the budget tab:

image.png

JohnyBeGood

Am I missing something?

Bob_L

Are the “transfers” you make each month to the bank or to a different bank account from which the mortgage payments are taken? If the later, is that bank account included in Quicken?
When posting images, please use the icon that looks like mountains.

JohnyBeGood

Transfers are made from checking to a same bank just different account from which the mortgage payments are taken out of.

Bob_L

Ok, is the other account set up as a quicken account? If so, do you want to budget based upon those transfers between the accounts rather than the actual withdrawals from the other account?

JohnyBeGood

Both checking and other account are in Quicken. What is the "most common way" to budget in this situation?

Bob_L

JohnyBeGood

Ok, sounds good. Thanks!

NotACPA

JohnyBeGood said:

Am I missing something?

What your graphics show is you making the Principal payment on the mortgage.

Where/how are you making the Interest payment and any Escrow payment?

JohnyBeGood

> @NotACPA said:
> (Quote)
> What your graphics show is you making the Principal payment on the mortgage.Where/how are you making the Interest payment and any Escrow payment?

$1,500 includes Principal, interest and Escrow payment. Is there any benefit by separating it like its broken down on each statement?

NotACPA

I have set up for my mortgage:

The Mortgage account itself (a liability),
An Escrow account (an asset), and
An Interest Expense Category..

That way I can track the balances of each, and reconcile my Q records to the monthly mortgage statement ... because sometimes banks change practices on how they record payments and send stqtements (mine recently did) and this way I know about those changes.

ALSO, I can do tax planning using the amount of Mortgage interest that I pay..

JohnyBeGood

Got it. Thanks!