[Bills & Income] Improve the logic of Projected Balances with payment estimates for credit cards

Here's my scenario:
- I put all my bills on one credit card each month to get miles.
- I have bill reminders for that credit card for most of the known bills
- I pay off the credit card each month.
- I have the credit card set up as a bill reminder with the Amount due as "estimated amount". In the estimated amount dialog, it's set to "Current credit card balance"

My suggestion is a new category of "estimated amount" as "Projected credit card balance".

Currently, in the Bills & Income tab, I have the view set for Project Balances: Next 90 days so I can forecast cash flow and credit card balances.

With the "Current credit card balance" option, using the anticipated bills for this credit card, currently this 90-day view creates a widening, but in my mind false projection of my cashflow and balance. Here's why.
- Let's say I have $1000 in the account today, April 2. I pay my credit card bill on April 28.
- My bill reminders show that by April 28, I will have $3000 on this card ($2000 in estimated bills)
- But, the forecasting window only projects the amount for payoff on January 2: $1000.
- As I move forward in time to my payoff date (April 28), the accuracy improves, but my longer term forecasting is very incorrect.
- So, on April 2, this creates a scenario in days 30-60's projections that I will only pay $1000 on April 28, but the bills in May add another $2000.
- To summarize, my balance projection on April 2 shows on April 28 the balance will be $2000 ($3000-$1000). On May 28, my balance will be $4000 (the projected April 28 balance of $2000+ another $2000 in projected bills). The logic breaks down here and there is no credit card payment in May, so the May-June projection adds on my estimated $2000 in bills to make my perceived balance $6000. The reality is, if I pay off my credit card each month, then the forecasting would look $6000 different.

I was thinking that to partially solve this, you could improve this logic by:
- Create a new category of "Projected credit card balance" to the "estimated amount" feature of the credit card.
- Project not just today's balance ($1000), but also bill reminders to that credit card ($2000) as the estimated amount for the payment due date, since the pay date is known.
- This would adjust as the daily balance changes for non-bill-related expenses that appear.
- For projecting, since Quicken knows the bill payment date, the system could look at the next 30 days based on this new projected balance of the payment date, making forecasting at least a little more accurate.
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  • UKR
    UKR SuperUser ✭✭✭✭✭
    The crystal ball gets a little foggy, trying to guesstimate a credit card balance several months in advance, even if you have loads of scheduled reminders for the individual charges.
    Have you tried setting the credit card payment reminder to "Previous [xx] payments", using 3 or 6 previous payments? That should give you a pretty accurate estimate of future payments. It seems to work quite well for me.
  • briang_simi
    briang_simi Member ✭✭
    I think, at a high level, my expectation is that Quicken should be showing data based on what it knows, if that's how I've set it.

    I've asked Quicken to estimate the payment based on my balance, so that's what it should use.

    That said, what it seems to include in my balance doesn't seem to be correct, at least not what's desired, in two particular parts - respecting the "statement date" (estimated by how far in advance I want to auto-enter the payment) and including pending scheduled bills in the balance.

    Quicken knows that I want to estimate 25 days before my due date, so I would expect Quicken should only include charges at least 25 days before the estimated payment in the balance. How that actually tracks with each credit card is a bit of moving target (e.g., CC closing date is not set but based on leaving 20 business days between that date and the due date), but I just want to get close. It seems, however, that Quicken is just calculating the full balance on the future payment dates (any estimated payments beyond 25 days out) without any way to consider the statement closing date.

    Quicken also knows my scheduled bills, so it should include those in the balance, even if they haven't be "entered" yet. However, when it estimates the payment, it doesn't match my register balance because it's excluding any pending "reminders" even though it's including any pre-entered future charges. Perhaps an option to include pending scheduled charges in the balance if there's some reason why others would NOT want these included in the estimate?

    I use these estimated payments as part of my "First Page - Projected Balances: Next 90 Days" to see if I need to move money in or out of my checking account. As with any forecast, I understand it gets more accurate with time; I'd just Quicken to be able to be as accurate "at the moment", which also helps me plan my spending...The projection lets me see that if I spend $x more on my CC before a certain date that I'm going to go below my desired balance which allows me to either choose to put off a purchase by a day or two or move more money into my account. Additionally, if I can see that my balance is going to be above a certain threshold and there's no way I'm going to spend enough to take my balance below a certain level, I can move my money into savings to make a little interest.

    Where I really noticed this was that at the end of March I pre-entered some upcoming auto and HO insurance payments that will be charged in May, which Quicken immediately applied to my CC balance, and, therefore, my estimated CC payment in May even though these charges won't actually be on my CC statement until the June payment. This put my checking balance a couple thousand below what it actually will be on my May CC payment due date. While trying to find ways of fixing this, I realized I couldn't make any sense of the balance it was using until I realized it was excluding pending scheduled charges from the balance.
  • apn
    apn Member
    This is the first hit when I search for this so adding my two cents in - currently projected balance is useless for me as I do virtually all spending on credit cards and pay in full every month. I have scheduled bills set up in the credit card accounts, but those aren't reflected in the scheduled cc payments (only the current balance, as of today).

    I agree that Quicken should be able to figure this out - if I have 5 scheduled payments in a credit card account totalling $500 for next month, and I have a scheduled credit card payment set to estimate based on credit card balance, I should be able to see next month's estimated credit card payment of $500 included in projected spending balances.

    Or, if there is some reason it can't handle things beyond the next scheduled credit card payment - why can't it at least take into account the 3 transactions I have scheduled prior to the next credit card due date? It knows when it is due, and it knows how much my scheduled transactions are that are set prior to that date. Just add those scheduled transactions to the current balance.
  • SammyDB
    SammyDB Member ✭✭
    I'm in the same boat. I use my airline card for everything I can and pay it off every month, but this makes the Projected Balances feature in Quicken practically useless.
    I've had to create a spreadsheet of my own to forecast my balance when financial forecasting should be one of the primary functions of the software.

    I agree there should be another option under Estimated Amount that includes scheduled charges. The "Current Credit Card Balance" option only counts completed transactions which shows next month's payment as practically zero.
    The "Previous Payments" or "Time of year" options are wildly inaccurate as I often have large one-off charges like a business trip, family vacation, new TV, etc., which drastically skews the "Previous Payment" amounts.
    So I'm stuck using "Fixed amount" and must manually determine what my average future payments will be. That's where my spreadsheet comes in. It's unfortunate Quicken, this great financial tool, can't make those calculations, given all the data is already there.

    If Quicken provided an "Estimated Credit Card Payment" which included scheduled reminders, I would create scheduled reminders for all my general expenses like groceries, gas, etc., where the "Previous Payments" on those reminders would be very useful and help more accurately forecast my future payments, beyond what I currently achieve in my spreadsheet.