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Question regarding categories and transfers

Heine Ootenvault

I use my personal checking account for making contributions to my Vanguard acc0.

When I make the contribution, and set up the purchase in the investment - enter transaction dropdown box - I pull the cash from my Chase banking account. In Quicken, that automatically enters the transaction in my Chase checking category as a transfer. OK.

I would like to also track this contribution as a Savings category, but since it categories it as a transfer, it doesn't.

Not sure how to rectify this. Any help would be appreciated

Tom

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Frankx

Hi @Heine Ootenvault

Can you give me some additional that will help my understanding? When you say "I would like to also track this contribution as a Savings category" are you referring to categories that appear on the "Category List" in Quicken? Here's snip of what they look like:

Or is it something else that you want to do and perhaps can't? Are you thinking about budgets?

Frankx

NotACPA

@""Heine Ootenvault"

You misunderstand accounting principals.

The use of an Income category makes you richer (the value of some asset goes up).

The use of an Expense category makes you poorer (the value of some asset goes down).

A transfer does neither, It merely moves value from one account to another, just as moving your wallet from one pocket to another doesn't change your Net Worth.

So, even though Q Mac allows this (which is an abomination), there's no appropriate category for a transfer.

Heine Ootenvault

Hello Frank,

Thanks for quick response.

Since Quicken categorizes it as a transfer, it does not show up in say - My Money tab - see where you money goes. If I look at the Total Spending graph, the cash I sent to Vanguard is not accounted since it was a transfer.

I did transfer it, I guess I am looking at it as another way of 'spending' it. Not sure if that explains it or not.

NotACPA

Instead of looking at an Income & Expense report ... look for the Cash Flow report; Transfers WILL show there.

Frankx

Heine Ootenvault said:

Hello Frank,

Since Quicken categorizes it as a transfer, it does not show up in say - My Money tab - see where you money goes. If I look at the Total Spending graph, the cash I sent to Vanguard is not accounted since it was a transfer.

Hi again @Heine Ootenvault

I know these things can be confusing, so I like to think of them in the simplest of terms and ways.

I would view the meaning of "see where your money goes" and "spending" to both be "how I used the money that I no longer have". And I think Quicken, and most folks would interpret those phrases the same way.

And I believe that there is a good reason why Quicken does not include transfers in those categories and it is because moving funds from one account to another is not spending. You still have the funds - they are just invested, or held, in a different account.

Anyway, I hope this helps.

Frankx

Heine Ootenvault

Hello Frank, I see your point. Thank you again.

Ynnad

Hi Everyone,
What is the proper transaction TYPE for Cash Back, Returns and Refunds? There are only three TYPE options: Transfer, Income, Expense? Neither one of these feel right.
Suggestions welcomed.
Dan

Chris_QPW

Ynnad said:

Hi Everyone,
What is the proper transaction TYPE for Cash Back, Returns and Refunds? There are only three TYPE options: Transfer, Income, Expense? Neither one of these feel right.
Suggestions welcomed.
Dan

I created a Income category "Cash Rewards" for this that has no tax line.
It is income, but it isn't taxable income.

NotACPA

Cash Back, Returns and Refunds all reduce your expenses.

SO, on a Cash Back (for example your charged $100 at the grocery, and got $20 cash from that, your grocery expense is only $80, not $100). The $20 is a transfer to a "Cash account" that you spend at some later time.

For a Return or a Refund, create a deposit that uses the same expense category that you used for the purchase ... thus negating the amount of the purchase

Chris_QPW

Oops I jumped on the first term and didn't notice that you have listed multiple terms, which are not all treated the same!

And even on the "cash back" I was thinking of something that might be different than what you were talking about.

Note I was thinking of my credit card that pays me cash back $1 for each "point".
As such since it isn't associated with any one purchase that is why it is income to me.

Even though @NotACPA has already stated this, I will just put in my view to "be complete".

If I got cash back for a given purchase I would just consider the purchase price as less, just like any other discount that might be taken off the purchase price.

A return or refund goes back into the same category as the one used for the purchase.

NotACPA

@Chris_QPW I think that we're talking about 2 different types of "cash back".

Indeed if there's a "cash back" reduction in price, that reduces the expense ... as in my other 2 examples.

BUT, my grocery store example is also "cash back", and while it reduces the total amount paid for groceries, my $100 check to Kroger is NOT all "expenses".

Chris_QPW

@NotACPA I agree, for "cash back" one has to clearly define what the actual transaction is to know exactly how to handle it.