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Savings Goals .... How best to create a transaction

chefjoanne

I am just not understanding how this works. I created a Savings Goal and would like to contribute to it. I wrote a check from my Bank Account/Checking register and listed Charles Schwab as the payee. In the category, I entered the appropriate Savings Goal. The check register transaction no longer exists but the balance in the Savings Goal shows the amount the check was written for.
What is the best way to work with Savings Goals? I don't understand the concept in spite of reading what's available in Quicken Help. Nothing of value on YouTube or Quicken Tutorials either. Thank you

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Tom Young

"Ive set up my savings goal to be $1200/year.
Every month I write a check to the my live savings account for $100

Do I post that check to my savings goal or to my live savings account?"

If that's a real live check with a real movement of money from a checking account to a separate savings account, then the correct entry in Quicken will mimic that. You'd post that as a reduction of your checking Account balance and an increase in your savings Account balance.

Entries you make to Savings Goal Accounts are strictly "pretend" transactions, transactions you make with "transfers", not checks, because the money never really leaves the "from" Account. That money, in the real world, is still in the "from" account at the financial institution that holds that account.

The effect of making a transfer from a checking Account in Quicken to a Savings Goal (Account) in Quicken is that the balance in the checking Account in Quicken is reduced and the money in the Savings Goal in Quicken is increased. It's basically a psychological trick; you see less money in your checking Account meaning, presumably, that you'll spend less money.

"I guess I can't have my live savings account connected to Quicken AND a savings goal? It's one or the other?"

That's correct. You'd be trying to make one dollar amount - $100 - end up in two different "Accounts" and you can't do that in a double-entry accounting system. In your budget and in your income expense reports you can make either of these transfers show up as a form of "expense", reducing the bottom-line "Overall Total", (excess of income vs. expenses or excess of expenses vs. income), but in either case it's a "pretend" expense.

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Tom Young

No, it doesn't work that way.

A "Savings Goal" is nothing more than another Account in Quicken, albeit with some special programming associated with it. Go to the Planning tab, click Savings Goals and you'll see any savings goals you've set up. Select one and click on "Contribute" or "Withdraw." You'll be guided to make a "transfer" (as Quicken uses that term") between whatever Account you've selected and this special Saving Goal Account.

Sherlock

Contributions to Savings Goals are transfer transactions. One way to enter a contribution is to select Contribute on the Savings Goal on the Saving Goals view on the Planning tab.

chefjoanne

Thank you. Now I do understand the correct way to do this is to go to the savings goal and click on withdraw or contribute. NOT to make this transaction through my check register.
The check that I entered in the check register simply VANISHED and the savings goal has been updated with the correct amount. Now what do I do when I update my check register and that check clears? It's going to make my account look like it's in the red because I already put it into a savings goal and the amount has already been deducted from my check register. Thanks again.

chefjoanne

I just went to that Savings Goal, clicked on Withdraw and asked that it be put back into the account from where it originated. It still does not appear in that account but it has disappeared from the Savings Goal. Any help will be much appreciated.
Someone could make a fortune if they produced detailed tutorials on all of this!

Tom Young

When you put money or take out money from a Savings Goal, your actual, real-world account isn't affected at all, it's a pretend "out of sight, out of mind' movement of funds. If you want to see the money moved out of your Account or back into it, click the Account's gear wheel and tick "Show savings goal transactions in registers and reports." You'll see your Account balance change with each Savings Goal transaction, thought the money is still really in the Account.

chefjoanne

Thank you Tom! That worked perfectly.
Have I set this up correctly?
Let's say:
Ive set up my savings goal to be $1200/year.
Every month I write a check to the my live savings account for $100
Do I post that check to my savings goal or to my live savings account?
If I post to the savings goal, the check will clear my bank and appear in my Quicken check register but the $100 will already have disappeared from my check register and that amount posted to the savings goal.
I'm trying to track my savings in my budget expenses to make sure I save that $100 every month. I guess I can't have my live savings account connected to Quicken AND a savings goal? It's one or the other?

Tom Young

"Ive set up my savings goal to be $1200/year.
Every month I write a check to the my live savings account for $100

Do I post that check to my savings goal or to my live savings account?"

"I guess I can't have my live savings account connected to Quicken AND a savings goal? It's one or the other?"

o.tabitha.228

Should Savings Goal accounts be included in accounts for a budget? If I have a Savings Goal for "College Savings" and I have budgeted $300 per month for college savings, how do I reflect these transactions at the end of the month?
-enter $500 transaction in checking account as an expense under category 'college savings', adjusting original budgeted amount as needed (ie-able to save more or less)
-create a deposit transaction in savings account for $500 ( and don't include a category??? ). Any way to better do this? Include memo?
-manually transfer those funds from checking to savings
-make a College Savings Savings Goal contribution of $500.

Now - when it comes time to use a portion of the money, how should that best be handled??
-withdraw from College Saving Savings Goal
-create a transaction in savings account as payment back to checking (no category??)
-create a transaction in checking account as deposit back to 'college savings' category
-write check for actual expense and categorize as 'college savings'

I really appreciate any advice on how to make this all clear and not have issues when it comes time to reconcile accounts.

chefjoanne

Tabitha....it sounds like we have the same problem and are thinking along the same lines.

To Tom and Sherlock....
It's unimportant that I show these live Savings accounts in Quicken.
It's more important that I show them in my budget so I can make sure I'm on track for the year. Hence....

I have created an expense category - Savings
Subcategories are Property Tax Savings, New Car Savings, etc.
When I manually write a check to my live savings, I post it to one of these Subcategories. Does that make sense?
This way I can be sure my savings are on track and it reflects in my budget.

Now...when it comes time to actually PAY the property tax, how do I post that check? I want my Property Tax Savings to show my yearly savings in my budget. Not be reduced by the amount of the Property Tax check.

Thank you

Chris_QPW

To me Savings Goals are "hide money from yourself, for a future expense" (but only in Quicken).
Rollovers in the budget are "save up money to pay for expense in the future".

They are tools that have a bit different purposes and which to use and when depends on what you are trying to do.

And this other thread it looks like @o.tabitha.228 is actually talking about something different, but I could be wrong about that.
https://community.quicken.com/discussion/7886468/transferring-funds-from-savings-goal

I'm not going to try to tell you how you should set things up because like I said it depends on your exact goals for each thing, but I will throw in my descriptions of some of these things.

There is no doubt that the functionality of Savings Goals and Rollovers overlap, but there are some differences.

Starting with the rollovers and an expense like property tax. In my state it is paid in two payments a year.

Personally what I do is I setup a reminder for the two payments, this gives me the cash flow for my checking account and I can also set "include reminders" in the budget for "simulating the 'actuals'" if I want. And for the actual budget I do the same I just put in the two payments on the months that they occur. I don't "save up", I just know I have enough to cover it, but for the people that want to "save up" that is where rollovers come in.

In the budget if you select/turn on the following rollover icon:

Image: https://us.v-cdn.net/6031128/uploads/editor/4a/8o5occmzom9g.png

What it will do is rollover any amount (plus or minus in this case) of the balance that isn't used in this month to the next one. So say the property tax is 2,400 a year, I could put in a budget of 200 a month with the rollover turned on. And in all the amounts in months where it isn't paid it would rollover that amount into the next month growing to the point where it is actually paid, and the balance goes to zero (or negative depending on the timing). Here is an simulation of that.
Budget numbers:

Image: https://us.v-cdn.net/6031128/uploads/editor/4h/dt05dm8e1vds.png

Balances (with reminder that pays 1,200 on the two months)

Image: https://us.v-cdn.net/6031128/uploads/editor/xm/maxsivldmtuq.png

Actuals showing the reminders/payments:

Image: https://us.v-cdn.net/6031128/uploads/editor/ao/66lvqzzn1lul.png

Negative numbers look scary right?
Well that is what would happen if I just started saving up at the start of the year. What is really expected is that you would have a rollover from last year. If you click on the balance amount for a given month that has the rollover set you will see this.

Image: https://us.v-cdn.net/6031128/uploads/editor/nx/xsm4ugt4bm0u.png

So what I'm going to do is edit the rollover from the last year putting in 800.
Now look at the balance:

Image: https://us.v-cdn.net/6031128/uploads/editor/pq/ktii41liyup5.png

Notice it in fact ends up with that same 800 to roll into the next year.

So this is how you might handle this kind of expense using rollovers.

One of the main points though is there isn't anything that "prevents" you from spending that rollover amount before you need it.

Savings Goals/virtual accounts help "preventing" you spending the amount. As in the money at least looks "gone" in the primary checking/savings account. Of course there isn't anything really stopping you from looking at the balance at the financial institution and spending everything in it. And BTW for really long term savings for a given purpose maybe a real account might be better.

As for showing Savings Goals in the budget look at the options I flagged in that other thread. One of them might get you what you want. I haven't tried them.

But it is the "hiding" Savings Goals and the rollovers.

Now I'm going to touch on "envelop budgeting" because it is a different concept than anything I have mentioned above.

The idea is this. You start out with "envelops" one for each kind of expense and a certain amount. But say you have $100 in clothes for the month and $200 for food, and you find that you are running out of money in the food category for this month for some reason. The envelop budgeting allows you to take money from the clothes envelop and put it in the food envelop to pay for those expenses. And that is it in a nutshell you are allowed to move money between the "envelops/categories".

The two systems I saw described on how to do this in Quicken had one where they used split transactions to move amounts between categories. The other did it with Savings Goals. Both seemed pretty complicated to do right to me.

Sherlock

o.tabitha.228 said:

Should Savings Goal accounts be included in accounts for a budget? If I have a Savings Goal for "College Savings" and I have budgeted $300 per month for college savings, how do I reflect these transactions at the end of the month?
-enter $500 transaction in checking account as an expense under category 'college savings', adjusting original budgeted amount as needed (ie-able to save more or less)
-create a deposit transaction in savings account for $500 ( and don't include a category??? ). Any way to better do this? Include memo?
-manually transfer those funds from checking to savings
-make a College Savings Savings Goal contribution of $500.

Now - when it comes time to use a portion of the money, how should that best be handled??
-withdraw from College Saving Savings Goal
-create a transaction in savings account as payment back to checking (no category??)
-create a transaction in checking account as deposit back to 'college savings' category
-write check for actual expense and categorize as 'college savings'

I really appreciate any advice on how to make this all clear and not have issues when it comes time to reconcile accounts.

We may include Savings Goal accounts in the accounts for a budget but it isn't necessary. There isn't any activity in the Savings Goal account that we may budget. I suggest adding the Savings Goal to the budget as a Savings Goal: select Manage Budget Categories and Savings Goals. This allows us to budget the amount we transfer to or from the Savings Goal.

In your example, you would add College Savings with a monthly budget of $300, a $500 transfer transaction from checking to savings, and a $500 the contribution from savings to College Savings. The budget will compare the budgeted amount to the actual amount you have transferred to or from College Savings.

Image: https://us.v-cdn.net/6031128/uploads/editor/g5/tyxwxe8hqvmu.png

When its time use a portion of the Savings Goal funds, withdraw funds from the Savings Goal back to their source account. If necessary, transfer funds from savings to checking to cover the appropriate expenses.

o.tabitha.228

@Chris_QPW - thank you for your answers. I use rollovers, but as the rollovers accumulated in our checking account, it seemed to be prudent to move into a savings account where they could at least garner some interest (until COVID entered the picture that is). So that's where my issues (mentioned in the other post) came into play. I just like our checking balance being closer to what we 'actually' have, minus amounts that are earmarked (rollovers) for certain categories. At any given time, if I use the amount shown as "Rollover Reserve" and subtract that amount from the checking balance, that's closer to the funds that are actually there/not earmarked. right?
I get the envelopes and creating transactions to shift the budget from one category to another - yes complicated, but oh well. Try not to do that much.

Does this process not work how Savings Goals are intended:

If I have a Savings Goal for "College Savings" and I have budgeted $300 per month for college savings, how do I reflect these transactions at the end of the month?
-enter $500 transaction in checking account as an expense under category 'college savings', adjusting original budgeted amount as needed (ie-able to save more or less)
-create a deposit transaction in savings account for $500 ( and don't include a category??? or don't have savings account as a Budget Account). Any way to better do this? Include memo?
-manually transfer those funds from checking to savings
-make a College Savings Savings Goal contribution of $500.

Now - when it comes time to use a portion of the money, how should that best be handled??
-withdraw from College Saving Savings Goal
-create a transaction in savings account as payment back to checking (no category??)
-create a transaction in checking account as deposit back to 'college savings' category
-write check for actual expense and categorize as 'college savings'

I'm thinking, alternatively I need to add my Savings Goals to my Budget as categories to budget for Transfers In and Transfers Out? With my checking, savings, and other spending accounts (credit cards) as the Accounts the budget gets info from. It's the movement of money from checking to savings that seems to cause more headache.

I do need to play with the Budget Preference options to see if those help.

TIA.

Chris_QPW

The combinations here make my head spin. I notice that @Sherlock pointed out that the if you have savings goals they can be budgeted which is even another twist on all of this.

Without digging into it I would say go with what @Sherlock is suggesting.

I will comment though on somethings that jump out at me. Are you really saying that you are transferring $300 from the checking to the savings, but transferring $500 to the savings goal/budget? Sounds like something is wrong/missing.

I will also say that in my opinion the transfers from the checking to the savings are just that "transfers" and as such should be invisible to all of this.

In other words the "savings account" is a real account, one that pays better interest than the checking. The "savings goal" is pulling money from the "real savings account" not the checking account.

So the operations are:

In:

Transfer from checking account to savings account (real world).
Transfer from savings account to savings goal account (virtual).
(Find some way to show in budget, @Sherlock's suggestion seems to cover that)

Out

Withdraw amount from savings goal account (virtual).
Transfer from savings account to checking account (read world).
Withdraw amount for paying bill for college using the correct category.
(Find some way to show in budget)

Sherlock

Joanne said:

Tabitha....it sounds like we have the same problem and are thinking along the same lines.

To Tom and Sherlock....
It's unimportant that I show these live Savings accounts in Quicken.
It's more important that I show them in my budget so I can make sure I'm on track for the year. Hence....

I have created an expense category - Savings
Subcategories are Property Tax Savings, New Car Savings, etc.
When I manually write a check to my live savings, I post it to one of these Subcategories. Does that make sense?
This way I can be sure my savings are on track and it reflects in my budget.

Now...when it comes time to actually PAY the property tax, how do I post that check? I want my Property Tax Savings to show my yearly savings in my budget. Not be reduced by the amount of the Property Tax check.

Thank you

Just because you're contributing to these special expense subcategories using a matching withdrawal and deposit, does not mean you need to use the same approach when you issue the actual expense.

Tom Young

If you really are attempting to regularly put $300 into an ACTUAL account somewhere, an account held by some financial institution, then in your Budget you can set up the transfer as a form of "expense."

If you have to skip making the $300 transfer in some months for some reason, or maybe put in more than $300 some months, then the "Actual" column in a Year to Date Budget Report will reflect a smaller or larger "expense" than the "Budget" column, and the year to date "Difference" column will tell you how much you're under or over.

If you're not making regular, real, deposits into some account but instead are trying to accumulate over time some "extra" money that you could deposit in an account, then you'd use a Savings Goal. So if you figure each month you might be able to "tuck away" $300 a month, you'd set up a Saving Goal and in your Budget set up this "transfer" as a form of "expense." In this situation, each month you'd "transfer" $300 to the Savings Goal, if you can. Just like in the case of making "real" transfers of money, the Budget Report will tell you if you're under or over your planned amount.

I see absolutely no point in "moving the goal line" in the budget. The YTD "Difference" column will always tell you where you are against your original plan and if you're behind, spend less somewhere else, (and maybe show a 'good" difference), and if you're ahead of the game you can spend that money somewhere else, (and maybe show a "bad" difference). The point is that you always know where you are simple by looking at that YTD Difference. "Budgets" rarely work out perfectly in the real world; if overall you end up about where you planned to be, that might be good enough.

If you're using a Savings Goal instead of real transfers of real money, then when you do get to the point where you're going part with some real cash and put it in a real outside account, you reverse the "transfers" you've made, putting' that money "back in" whatever Account it came from (though it never really left that Account), and make the transfer.

o.tabitha.228

Thank you all for your advice! Going to put it in practice tomorrow and see how it goes with adding Savings Goals as budget categories and not including the Savings account as a budget account.