Why is a new Budget based on last year LESS than my actual spending last year?

SandraStowell

I am frustrated by the Quicken budget process. I would like to start with a budget for next year based on my actual spending last year, then update this to be realistic. First thing I notice is that Quicken creates a budget that is about $3K less than shows in a spending report for last year. How does that make sense?

Scooterlam

My first action at reconciling the two would be to ensure last year's spending report uses the exact same accounts and categories at this year's budget. 

Chris_QPW

I think the problem is that Quicken doesn't use the last year creating the budget for this year.  Instead it uses the current year.  On top of that it seems to be a bit incomplete.

First off let's start with terms.  You say you want to budget based on "last year".  Do you really?  Last year was 2019.  Do you really want to budget for 2021 using 2019's amounts?

Most people want to use "this year's" amounts for next year's budget.  But wait weren't at the end of the year yet.  What to do about that?  What Quicken does is uses "this year".

Now for the incomplete part.
Because it is using "this year" and not "the last 12 months", there isn't any numbers for future months like December and depending on what day of the month you do it on the numbers might be incomplete for that month.  So the only day of the year that you can get the right amounts for next years would be December 31, after all the transactions have been downloaded for that day.  Because any day before that might be missing some transactions.  And starting in January it will be looking at 2021 numbers!  I do believe that you could wait until January, then set your system clock back to December 31, 2020, and then create the budget to get it right.

It really should be changed to using the "last 12 months".  Or better yet, allow the user to select a 12 month range.

Example:

garrywillis16320

I would like a new budget to be based on the timing of spending from this year. Example is insurance payments are one-time events, but it appears the budgeting tools spreads the expense throughout the year. Is this a setting I am not using or is that just the way it is?

Chris_QPW

@garrywillis16320 Unfortunately not.  Quicken does what it does and there isn't any setting change where it picks the values for the new budget other than the setting that says to start with zeros.

GeoffG

@Chris_QPW I've wrestled with this for longer than I can remember. Are you saying that an all zeros budget will not perform the monthly average calc spread across the entire year? I've not tried starting with zeros as it does require more work, but it's also more work to zero out every months average calcs!

Chris_QPW

@GeoffG

I made a mistake in the above post!

If you look at it closely you will see that it is showing the "ACTUAL" and of course that is correct since I haven't spent anything on fuel in December (especially in November!), and I don't have any reminders on that category.

When I just tried it I get this result.


I have yet to spend anything on fuel this month, but it came up with $94.
Which as it turns out is the average amount spent over the last 12 months.

What it seems to be doing is using the exact numbers for the months that already have been past, and then the 12 month average for the future months (or at least in this case December).  Now note that when you create a budget in 2020, you are creating a 2020 budget, not a 2021 budget (which you will find out next year when pull up the budget and it wants to extend it into 2021).

You can also extend the budget now by selecting this button to go into 2021.


And that will give you this dialog, and I picked the second one


But if you are doing this now, clearly you don't have all the exact values for December.

Its result is "different".

The 30 is the number I put in as the existing budget before extending it as a test.

It used that for December 2021 even if I set my system date to 12/31/2020.

BTW if you do nothing and open the budget in 2021 you will get this prompt:

And as it suggests it already created the budget and it does is use the first choice on the above dialog and just use your 2020 budget numbers.

GeoffG

Yes, I've seen and done this many times over the years. The problem is and continues to be an item budgeted once or twice in a year, when looking at monthly budget view always gets the average spread across in future months.