Budget feature best practices for a newbie

J. Holmes

Hi, Quicken Community

One of my goals for 2023 is to be a lot more prudent with my finances. 

In general, while I have used Quicken for a long time, I have primarily used Quicken to keep track of bills and to provide a loose overview of where my money is going.  As such, I rarely use the reports.  Additionally, usage of the budget feature is more of a psychological exercise to make me feel good.  I must admit, I never stick to my monthly budget.  I routinely add $$ to the budget throughout the month to turn categories from red to green. 

I am now prepared to do a better job tracking my spending and I have a few questions around best practices.  I have read a lot of posts around including transfers in your budget vs. not including transfers and I am torn between which direction to take. 

Considering the current reporting & budgeting capabilities in Quicken for Mac, what are the recommended best practices for someone like me who is now interested in budgeting?  

J. Holmes

I may have found my answer - my good friend is a CPA and recommends not including payments to credit cards in my budget.  His recommendation is to simply budget for interest charges whenever I do carry a balance on my credit cards.  Removing all those transfer to credit card account line items from the budget makes it much cleaner.  

jacobs

Hang on a second… do you have separate accounts in Quicken for each credit card, and record your individual charge transactions in those accounts? That's they way Quicken is really designed to be used: record each transaction (either manually or by downloading from the credit card company), so you can properly date and categorize each transaction. When you pay the credit card bill from your checking account, it's then a simple transfer transaction, moving money from your checking account to your credit card account.

Transfers do not normally show up in your budget at all, unless you expressly add them to your budget. (To do so, you'd need to go to Edit Budget > Select Categories, and check the Transfers In and Transfers Out items.) Paying your credit card bill may feel like the expense, but the expense was really incurred each time you used the credit card. So the payment is not what you budget for, it's the charges on the credit card that you budget for. (Typically, one might use a selected Transfer In/Out line item in your budget if you are trying to do something like regularly transfer money to a savings account and you want to keep track of your progress; it's not a real expense shifting money from checking to savings, but you may want to see it in your budget to keep on track.) 

Using Quicken in this way, your budget will contain your budgeted amounts for groceries, restaurants, clothes, gas, etc., and your actual spending recorded in Quicken, transaction by transaction, will be reflected in your budget.

J. Holmes

Thanks @jacobs for the response.  

Yes, I do have separate credit card accounts and transactions are downloaded and appropriately categorized for each account.  Overall, I was getting hung up on all feature requests for the ability to include the transfer of money from a checking/savings account to the respective credit card account in the budget.  

Initially, I had selected the 'transfer to' for my credit cards (over 10 accounts) and it just made the budget look overwhelming.  I have now removed all of the 'transfer to' items and plan to manage my budget as you have recommended.  

I plan to use the cash flow report to monitor how cash is moving to my credit card accounts.