Categories vs Transfers

Jwalt313

I've used Quicken for years but have always been confused about the category vs transfer choice. Simply speaking, I believe that transfers are for monies moved between my accounts and categories are for money spent or deposited to or from outside accounts? So how do I handle a monthly saving deposit going from my checking to savings account? If I use transfer because it's between accounts, it does not show on my Income and Expenses report as a monthly budgeted expense. If I use a category like "Savings", it does not show up either as the deposit is off set by the withdraw since both accounts are in the report. How can I see my monthly savings included in my budget and in my reports?

jacobs

You are correct in your understanding of transfer versus categories. When you transfer money from a checking account to a savings account, that is definitely a Transfer.

If you have the current version of Quicken, you can make transfers show up on reports. This only became possible, in stages, over the past several months. If you do Create Transaction Report or Create Summary Report, go to Customize, click on the Accounts tab, and select only your checking (and credit card) accounts but not your savings account. Then click on the Advanced tab to select "Include only transfers with accounts outside of report", and the report will include your transfers to savings. (You can change the presentation of where these transfers show up by switching the Organization between Income & Expense and Cash Flow -- experiment both ways to find what best suits your needs.

So what about budgets? You can't do this yet in budgets in Quicken Mac. It's coming, the product manager says; the implementation of Reports was the first step to getting there, but they are now working on re-writing the code for budgets to allow some similar mechanism for selectively including transfers for things like savings and loan repayments which are transfer from an accounting perspective but are budgeted "expenses" from a cash flow standpoint. 

Jwalt313

If I treat my savings account as an outside account, would it make sense to use the "savings" category instead of a transfer in order to see the savings transactions in the budget?

jacobs

Until they implement the ability to include transfers in budgets, anything you do is going to be a problematic work-around.

What you choose to do depend on what's most important to you. To me, having the correct amount in each account is more important than budgeting for savings, so I'd use a transfer. For a budget, I would either print it and write in the savings by hand, or I'd export it and add the savings amount manually.

If you do what you suggest -- making your transfer to savings an expense with a category so you can see it in your budget, then you have the opposite issue, which is how to reflect the money coming into your savings account. You could manually enter it as a deposit, and not categorize it, but it will still show up in reps as uncharacterized revenue. Some people do more elaborate workarounds, such as entering every transaction in duplicate and using a dummy account that they exclude from their reports, but that's messy in its own way.

I would do the transaction as a transfer, and if you want to know how much to add to or subtract from your budget, create a report that gives you monthly totals of how much you transferred from check or to savings, and add that in manually. And hope, like many other Quicken users, that this long-promised functionality comes to Quicken by this spring or summer.