Budgeting vs Accounting

KatF

I see there is a category for car payments in the budgeting module - and I do budget for car payments. However when the transaction occurs it needs to be posted against debt and Interest - not Car Payments expense. How can this work? Can my payments reduce my debt and apply toward my budget at the same time?

Chris_QPW

The budget works off of categories, just like most things in Quicken do.  You should budget in the same categories that you use for the transactions (income and expenses).  What categories you want to budget is up to you, but certainly there isn't any kind of restriction on them having to be non-recurring.  In fact, the budget has an option that allows you to treat future reminders as it they are future income/expenses in your budget.

And yes, there is a rollover option for any part of a category budget from on month to the next, for any kind category.

Reminder option is at:
Budget Actions -> View options -> Include reminders

The rollover is this symbol:
(Annual view):


(Graph view):

Tom Young

First question...

TYPICALLY budgets focus on income and expenses.  The amount you pay against a car loan has an expense element - the interest - and a non-expense element - the reduction of a liability on your balance sheet.  So the principal payment isn't really an expense from a pure accounting standpoint, it's an "outbound" cash flow.  That said, you can, if you wish, budget for both real income and expenses AND cash flows.  In that case you'd need to budget for and account for  the interest expense AND the transfer to the loan.  But there's no way you can post your actual payment to a Category, (Quicken-speak for what real accountants would describe as income or expense accounts), like Car Payments and have that automatically split out.  You need to split the payment between interest (or any Category that you want to use) and a transfer of money to the loan.

Second question...

You are the Chief Accounting Officer of your enterprise, (maybe just you if you're single, maybe the "family" if you're married and/or have children), so you decide what you budget and account for.  Back when I was using Quicken's budgeting tool to account for my family's financial transactions I basically budgeted for everything, including some amounts for "ad hoc", non-recurring events like car repairs and service, medical expenses, etc.  I roughly knew how much we spent over the course of the year for groceries, gas, dining out and so forth and would typically average those figures out each month for the upcoming year. 

There's really no "should" here, you decide how much work you want to put into your budgeting, how much effort to put into your accounting. 

Third question...

Yes, you can set up your budget to roll forward remainders later months.  Under the budgeting tool set for Annual View, Budget Only you should see an icon called "Rollover Option" to the right of each Category you've selected for your budget.

SomebodyInGNV

If you have scheduled loan reminders, Quicken will split the principal and interest automatically. It's fairly accurate but may vary a bit from your lender's accounting. I find value in reconciling the payments in the loan account to reflect what the lender recorded in the statement.

In a budget, you can include the interest and escrow expense categories and/or the transfer to principal and, if you record it that way, to escrow accounts. Alternatively, there is an option to include "Detailed Loan Payments". That's kind of a misnomer because it doesn't show details. Instead, it lists the total payment as a total amount on a single line, even if you split the details of the loan payment. If you use that, don't list the expense and transfers separately - you'd be duplicating the cash flow.

You can find those options in the Manage Budget Categories option on the budget screen.

I'd like to show my mortgage payment as a total but that's incompatible with arranging the budget by category groups, which I prefer. The problem is that detailed loan payments become their own category group. I can't group car loans with transportation costs and mortgage payments with housing costs. My workaround is to group both the expense category and transfer in my preferred category group. That way they're subtotaled in the group.

KatF

Should I only budget for non-recurring transactions? For example - budget only for groceries, fuel, and other misc expenses?

KatF

Sorry - one more question - can my budget have a roll forward option where the remainder left over for the month rolls to the next month?

Chris_QPW

The budget works off of categories, just like most things in Quicken do.  You should budget in the same categories that you use for the transactions (income and expenses).  What categories you want to budget is up to you, but certainly there isn't any kind of restriction on them having to be non-recurring.  In fact, the budget has an option that allows you to treat future reminders as it they are future income/expenses in your budget.

And yes, there is a rollover option for any part of a category budget from on month to the next, for any kind category.

Reminder option is at:
Budget Actions -> View options -> Include reminders

The rollover is this symbol:
(Annual view):


(Graph view):

Tom Young

First question...

TYPICALLY budgets focus on income and expenses.  The amount you pay against a car loan has an expense element - the interest - and a non-expense element - the reduction of a liability on your balance sheet.  So the principal payment isn't really an expense from a pure accounting standpoint, it's an "outbound" cash flow.  That said, you can, if you wish, budget for both real income and expenses AND cash flows.  In that case you'd need to budget for and account for  the interest expense AND the transfer to the loan.  But there's no way you can post your actual payment to a Category, (Quicken-speak for what real accountants would describe as income or expense accounts), like Car Payments and have that automatically split out.  You need to split the payment between interest (or any Category that you want to use) and a transfer of money to the loan.

Second question...

You are the Chief Accounting Officer of your enterprise, (maybe just you if you're single, maybe the "family" if you're married and/or have children), so you decide what you budget and account for.  Back when I was using Quicken's budgeting tool to account for my family's financial transactions I basically budgeted for everything, including some amounts for "ad hoc", non-recurring events like car repairs and service, medical expenses, etc.  I roughly knew how much we spent over the course of the year for groceries, gas, dining out and so forth and would typically average those figures out each month for the upcoming year. 

There's really no "should" here, you decide how much work you want to put into your budgeting, how much effort to put into your accounting. 

Third question...

Yes, you can set up your budget to roll forward remainders later months.  Under the budgeting tool set for Annual View, Budget Only you should see an icon called "Rollover Option" to the right of each Category you've selected for your budget.

SomebodyInGNV

If you have scheduled loan reminders, Quicken will split the principal and interest automatically. It's fairly accurate but may vary a bit from your lender's accounting. I find value in reconciling the payments in the loan account to reflect what the lender recorded in the statement.

In a budget, you can include the interest and escrow expense categories and/or the transfer to principal and, if you record it that way, to escrow accounts. Alternatively, there is an option to include "Detailed Loan Payments". That's kind of a misnomer because it doesn't show details. Instead, it lists the total payment as a total amount on a single line, even if you split the details of the loan payment. If you use that, don't list the expense and transfers separately - you'd be duplicating the cash flow.

You can find those options in the Manage Budget Categories option on the budget screen.

I'd like to show my mortgage payment as a total but that's incompatible with arranging the budget by category groups, which I prefer. The problem is that detailed loan payments become their own category group. I can't group car loans with transportation costs and mortgage payments with housing costs. My workaround is to group both the expense category and transfer in my preferred category group. That way they're subtotaled in the group.